Wit and Wisdom From The World’s Most Irreverent Billionaire
Ladies and gentlemen, tune in to our special show on the Maria Rekrut Radio Show on Thursday, November 30, 2023, at 5 p.m. EST on https://4680q.ca/
We will remember the life and wisdom of the legendary investor, Charlie Munger. Join us as we reflect on the invaluable lessons and insights shared by the vice chairman of Berkshire Hathaway. From the importance of rationality and continuous learning to the art of patience and long-term value investing, Charlie Munger’s words of wisdom have left an indelible mark on the world of finance. Don’t miss this opportunity to celebrate the life and legacy of a true investing icon.
Charlie Munger is one of the great minds of the 20th century. Below is an attempt to capture that wisdom in one shareable place.
Spend each day trying to be a little wiser than you were when you woke up. Discharge your duties faithfully and well. Systematically you get ahead, but not necessarily in fast spurts. Nevertheless, you build discipline by preparing for fast spurts. Slug it out one inch at a time, day by day. At the end of the day – if you live long enough – most people get what they deserve.
American billionaire investor Charles Munger poses for a portrait with his arms folded in Los Angeles, California, March 9, 1988. (Photo by Bonnie Schiffman/Getty Images)
Charlie Munger, the vice chairman of Berkshire Hathaway and a renowned investor, has imparted numerous investment lessons and words of wisdom over the years. Here are some of his notable insights:
Be rational and objective.
Be a learning machine.
Financial freedom is about independence.
Live within your income and save so that you can invest.
Learn what you need to learn.
Investing is where you find a few great companies and then sit on your ass.
The big money is not in buying or selling, but in the waiting.
Assume life will be really tough, and then ask if you can handle it. If the answer is yes, you’ve won.
Munger’s wisdom emphasizes the importance of rationality, continuous learning, patience, and living within one’s means. His insights reflect a long-term, value-oriented approach to investing and a focus on
Charles “Charlie” Munger, a longtime resident of Pasadena, California, is perhaps best known as the Vice Chairman of the world’s greatest compound interest machine: Berkshire Hathaway, Inc.
In the time of his and Warren Buffett’s reign as the leaders of Berkshire, the company has returned roughly 2,000,000% on its initial value, or 20,000 to 1. This was accomplished in the adult lifetime of two men simply by investing the capital of the company in an increasing number of prosperous enterprises and without dangerous amounts of borrowing. It is a story for the ages.
Charlie is known as a “sidekick” only to people who don’t know him well. To those who do know him, Charlie is a fiercely independent intellectual who, in the words of his partner Buffett, “Marches to the beat of his own music, and it’s music like virtually no one else is listening to.”
Besides his work co-headlining the Berkshire affair and various other business and philanthropic ventures, Charlie is known for his fluent, multidisciplinary mind. Trained as a meteorologist during World War II and as a lawyer at Harvard before devoting himself to business, Munger has drawn heavily from the study of psychology, economics, physics, biology, and history, among other disciplines, in developing his system of “multiple mental models” to cut through difficult problems in complex social systems. It is a system like no other.
As a result, his insights on business and life are unique, rare, and correct with unusual consistency. Speeches and writings made long ago stand up in their logic and validity today as much as when they were written, given their basis in the deeply fundamental wisdom of the world.
Adopting the “Munger” approach to thinking is difficult, as is imitating any genius, but utilizing its core tenets will quickly remove the cobwebs from your mind. When asked his secret to success, Munger once answered, “I’m rational.”
Charlie Munger Quotes
“If you skillfully follow the multidisciplinary path, you will never wish to come back. It would be like cutting off your hands.”
“Spend each day trying to be a little wiser than you were when you woke up. Discharge your duties faithfully and well. Systematically, you get ahead, but not necessarily in fast spurts. Nevertheless, you build discipline by preparing for fast spurts. Slug it out one inch at a time, day by day. At the end of the day, if you live long enough, most people get what they deserve.”
“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.”
“Just because you like it does not mean that the world will necessarily give it to you.”
“I try to get rid of people who always confidently answer questions about which they don’t have any real knowledge.”
“I always say I want to know where I would die so I can never go there.”
“The iron rule of nature is: You get what you reward for. If you want ants to come, you put sugar on the floor.“
“We’re just not interested in taking a substantial chance of taking a lot of very decent people back to “Go” so we can have one more zero on our net worth.”
“I think Warren and I know the edge of our competency better than other people do.”
“I paid no attention to the territorial boundaries of academic disciplines and I just grabbed all the big ideas that I could.”
A Lesson on Elementary Worldly Wisdom As It Relates To Investment Management & Business — Charlie describes his thoughts on investing, but only after going through a detailed list of useful mental models fundamental to understanding the world before you learn to invest.
Turning $2 Million Into $2 Trillion — Charlie goes through a long mental exercise of building Coca-Cola up from scratch, starting in 1986, using only the elementary mental models that would be learned by a young college student.
The Tension Created by Stretch Goals – What is a better approach: Setting stretch goals that might cause people to cheat? Or making goals a little easier? Charlie thinks there is a tension between the two.
Circle of Competence – If there’s one thing Charlie takes pride in, it’s that he knows what he knows and what he doesn’t know. That is a circle of competence.
Bad Morals Drive Out the Good – Gresham’s Law says bad currency drives out good. Charlie thinks bad morality is the major functional equivalent in the real world.
Getting The Best Odds – Gamblers can’t predict what will happen on any hand, but they can bet when they have the odds in their favor. Over time, they accrue an advantage.
How Raising Prices Can Increase Sales – Everyone in economics thinks lowering prices leads to rising sales. Sometimes that is true. But knowing when isn’t true leads to some interesting results.
Charlie Munger: Why Bureaucracy is not Shareholder Friendly – The constant curse of scale is that it leads to big, dumb bureaucracy—which, of course, reaches its highest and worst form in government where the incentives are really awful.
Charlie Munger is the Chairman of the Daily Journal, a public company based in LA. Every year at the annual shareholders meeting he talks for hours. I take very detailed notes.
Maria Rekrut, believes Vacation Rental Investing is much more fun than the average real estate investing. Maria, known as the Vacation Rental Guru, writes blogs regularly about her stories and adventures in vacation home investing. Maria Rekrut believes that if she can become successful investing in Vacation Rentals so can anyone else by following her simple investing techniques.
Maria is also a regular contributor to the Real Estate Blog
http://www.reiclub.com/realestateblog/author/maria-rekrut/
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