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Reading time : About 10 minutes
“There was only one partner who fit my bill of particulars in every way — Charlie.” Buffett
“The best armour of old age is a well spent life preceding it” Charlie Munger
28th November, 2023 Charlie Munger left the world a better place. He certainly had a lot of impact on a lot of peoples lives. Most of the people who know about him consider him to be a role model. I have considered him to be one of my role models and he has shaped the way I think. I cannot sum up the things he has taught everyone or do justice to what he has said.
What I will do to the best of my abilities is try to share the things that he said had the biggest impact in my life.
We know that he is a very admirable person, but what shaped him to be the person that he is today? He calls Buffett a lollapalooza and he himself is also a lollapalooza. A confluence of a lot of small things to generate an extreme result. In Munger’s case that is extreme success.
A little bit about Charlie’s life,
He was born into a household which was well off and even as a kid Charlie’s parents encouraged reading by giving books to the kids on Christmas, this made Munger a reading fanatic.Munger experienced the Great Depression and he saw the importance of families staying and sticking together and helping each other out. As a teenager Munger dropped out of University to join the US Air Force as a meteorologist. He later continued his education in a lot of different Universities. (Caltech, Harvard , University of Michigan). After finishing his law degree from Harvard he decided to open up a real estate law firm. Munger, Tolles and Olsen.
When he was around 29 his wife divorced him who he was married to since he was 21 years. He lost everything in the divorce. He had to live in very dire conditions. Then some time later he got to know that his son Ted had leukaemia. Whatever money he had went into helping his son getting surgery. At those times the death rate for these things was near 100%. Rick Guerin a close friend of Munger said he used to go to the hospital hold his sons hand in the hospital and when he left he used to be walking down the streets crying. Age 9 his son died. Then a few years later after a surgery went wrong he had to remove one eye.Even after all of this Munger decided he had to do something to be independent. He started investing in stocks, real estate and more on the side. Then as time went on he made his first million through investing. He realised that there was more money in doing what the clients did than to run a law firm.
Then both Charlie and Buffett’s life were about to change when they met each other by happenstance through mutual friends in Omaha. They hit it off and as time went on Charlie and Buffett ended up becoming partners.
Charlie Munger as a person was a very direct no nonsense person. He didn’t waste any time, was never a people pleaser he just spoke what he believed was true and most of the time he was right.
Munger was one of the most realistic and rational person I have read about. He had a knack of seeing things for what they were and not seeing things for what he wanted them to be.
Here are few of my favourite ideas from Charlie Munger,
“The safest way to try to get what you want is to try to deserve what you want. It’s such a simple idea. It’s the golden rule. You want to deliver to the world what you would buy if you were on the other end. There is no ethos in my opinion that is better for any lawyer or any other person to have. By and large, the people who’ve had this ethos win in life, and they don’t win just money and honours. They win the respect, the deserved trust of the people they deal with. And there is huge pleasure in life to be obtained from getting deserved trust.”
"Mimicking the herd invites regression to the mean.”
“A great business at a fair price is superior to a fair business at a great price.”
"Assume life will be really tough, and then ask if you can handle it. If the answer is yes, you've won.”
"Like Warren, I had a considerable passion to get rich, not because I wanted Ferrari's -I wanted the independence.”
"Remember that reputation and integrity are your most valuable assets and can be lost in a heartbeat.”
"The first $100k is a bitch, but you gotta do it. I don’t care what you have to do—if it means walking everywhere and not eating anything that wasn’t purchased with a coupon, find a way to get your hands on $100,000. After that, you can ease off the gas a little bit.””
In life if you want to succeed look for quality. Quality relation ,people, businesses, role models, etc.
“Take a simple idea and take it seriously.”
Becoming rich is fine. Staying sane and continuing to be rich is hard.
Look at your Inner clock and don’t give a fuck what other people think.
“Good ideas are a wonderful way to suffer terribly if you overdo them”
“Envy is a really stupid sin because it's the only one you could never possibly have any fun at.”
"I would argue that passion is more important than brainpower.”
“I don’t know anyone who’s wise who doesn’t read a lot. But that’s not enough: You have to have a temperament to grab ideas and do sensible things. Most people don’t grab the right ideas or don’t know what to do with them. And if you get into the mental habit of relating what you’re reading to the basic underlying ideas being demonstrated, you gradually accumulate some wisdom.”
"If you keep learning all the time you have a huge advantage.”
Troubles from time to time should be expected. This is an inescapable part of life. So why are you letting it bother you?
“Here’s one truth that perhaps your typical investment counsellor would disagree with: if you're comfortably rich and someone else is getting richer faster than you by, for example, investing in risky stocks, so what?! Someone will always be getting richer faster than you. This is not a tragedy.”
“Acquire worldly wisdom and adjust your behaviour accordingly. If your new behaviour gives you a little temporary unpopularity with your peer group… then to hell with them.”
Don’t fool yourself because you are the easiest person to fool.
“Opportunity meeting the prepared mind: that’s the game ”
“I find that all you have to do to get ahead in life is to be non idiotic and live a long time. It's harder to be non idiotic than most people think.”
“Its counterintuitive that you go at the problem backwards. If you try and be smart it's difficult. If you just go around and identify all of the disasters and say, What caused that? And try to avoid that, it turns out to be a very simple way to find opportunities and avoid troubles”
“You need to know that the brain is very tricky, there are a few psychological tendencies that cause our minds to malfunction like excessive self regard tendency, twaddle tendency and simple, pain avoiding psychological denial.”
“Adopt a "mindset of falsification" always striving to disprove your hypothesis and seeing if it stands up to assault . You have to ask " why might I be wrong?""
“ Good investing requires a weird combination of patience and aggression. And not many people have it.”
“ I’m a big fan of knowing the big ideas in pretty much all the disciplines -- the ones that are pretty easy to assimilate -- and then using those routinely in your judgments. That’s just my system.”
”A lot of smart people think they’re way smarter than they are, and therefore they do worse than dumb people. And it’s very common to be utterly brilliant and think you’re way the hell smarter than you are.”
‘Never underestimate the man who overestimates himself.’
“I think people that multi-task pay a huge price … I think when you multi task so much, you don’t have time to think about anything deeply. You’re giving the world an advantage you shouldn’t do. Practically everyone is drifting into that mistake.
“Those of us who have been very fortunate have a duty to give back.”
“We have lots of stupidity left in us at Berkshire. But you can live with a quite a bit if you avoid the most extreme follies of man….. We have avoided a subset of stupidities- the important ones.”
“Confucius said that real knowledge is knowing the extent of one’s ignorance. Aristotle and Socrates said the same thing. Is it a skill that can be taught or learned? It probably can, if you have enough of a stake riding on the outcome.
Some people are extraordinarily good at knowing the limits of their knowledge, because they have to be. Think of somebody who’s been a professional tightrope walker for 20 years – and has survived. He couldn’t survive as a tightrope walker for 20 years unless he knows exactly what he knows and what he doesn’t know. He’s worked so hard at it, because he knows if he gets it wrong he won’t survive. The survivors know.”
“Whenever you think that some situation or some person is ruining your life, it’s actually you who are ruining your life. It’s such a simple idea. Feeling like a victim is a perfectly disastrous way to go through life. If you just take the attitude that however bad it is in anyway, it’s always your fault and you just fix it as best you can – the so-called ‘iron prescription’ – I think that really works.”
“Wisdom is prevention but very few people do much about it.”
“We make actual decisions very rapidly , but that is because we have spent so much time preparing ourselves by quietly sitting.”
“If you turn problems into reverse, you often think better.”
“Any year that you don't destroy one of your best-loved ideas is probably a wasted year”
“I never allow myself to hold an opinion on anything that I don't know the other side's argument better than they do”
“It's amazing how intelligent it is just to spend some time sitting. A lot of people are way too active.”
“There are 60,000 economists in the US, trying to forecast recessions & interest rates & if they could do it successfully they'd all be millionare’s by now. As far as I know, most are still gainfully employed, which ought to tell us something”
“Always take the high road, it's far less crowded.”
On An acceptance of reality: “I’m afraid that’s the way it is. If there are twenty factors and they interact some, you’ll have to learn to handle it— because that’s the way the world is. But you won’t find it that hard if you go at it Darwin-like, step by step with curious persistence. You’ll be amazed at how good you can get.”
Here’s one story I loved from Buffett,
Story goes ...
A terrorist hijacked a private jet carrying Buffett and Munger.
"Before I shoot, I'll grant you each a last request," said the hijacker. Turning to Munger he asked "What is your request?"
"I would like to give once more my speech on the virtues of Costco, with illustrations,'" Munger replied.
"Well, that sounds pretty reasonable to me," the hijacker responded.
"And what would you like, Mr. Buffett?"
"Shoot me first," Buffett replied.
Here are a few videos and links of Charlie:
The last three videos are his last interview with Becky Quick. It was going to be published when he turned 100. But sadly due to his death they published a few parts now. This was shot two weeks before his death so it’s good to know that till the time he died his brainpower didn’t decline.
I have only learnt about him a few years ago but he changed the way I do everything. It is remarkable how much impact he has had on my life and it makes me wonder, how much impact he has had on the people who actually know him.
As Munger says, ‘I have nothing to add’
That’s it. Will miss you Charlie.
He had a knack of seeing what things actually were and not what he wanted them to be. Great post 🙌.