Charlie Munger, one of the most iconic figures in investing over the last century, has recently left us at the age of 99. Having spent decades studying the lessons of the world's Investment Masters, Charlie Munger's approach to both investing and life have influenced me more than any investor. I feel fortunate to have attended a few Berkshire Meetings, and had the privilege of being present to experience first hand his profound wisdom.
In light of all the lessons and insights I’ve taken from Charlie, choosing a list of just ten quotes from his extensive reservoir of learnings he so generously shared was not easy. While these quotes barely scratch the surface, they have become deeply embedded in the core of how I think about and conduct my own investment process.
RIP Charlie Munger, a hero of mine.
Reading
“In my whole life, I have known no wise people (over a broad subject matter area) who didn't read all the time — none, zero.”
Incentives
“I think I've been in the top 5% of my age cohort all my life in understanding the power of incentives, and all my life I've underestimated it. And never a year passes but I get some surprise that pushes my limit a little farther.”
Psychology
“Of all the models that people ought to have in useful form and don't perhaps the most important lie in the area of psychology."
Find ‘Holds’
“I’m no good at exits. I don’t like even looking for exits. I’m looking for holds. Think of the pleasure I’ve got from watching Costco march ahead. Such an utter meritocracy and it does so well, why would I trade that experience for a series of transactions? I’d be less rich not more after taxes. The second place is a much less satisfactory life than rooting for people I like and admire. So I say find Costco’s, not good exits.”
Economics
“God knows where the world is headed. I just think that one way or another, the world muddles through.”
Macro-Economic Forecasts
“A great philosopher said 'A man never steps into the same river twice, the man is different and so is the river when he goes in the second time.' That's the trouble with economics. It's not like physics. The same damn recipe done a different time gets a different result.”
Simple Idea
‘Take a simple idea and take it seriously’.
Multi-disciplinary
“It’s kind of fun to sit there and out think people who are way smarter than you are because you’ve trained yourself to be more objective and more multi-disciplinary. Furthermore, there is a lot of money in it, as I can testify from my own personal experience.”
Lollapalooza Effects
“Really big effects, lollapalooza effects, will often come only from large combinations of factors.”
High Quality Businesses
“We’ve really made the money out of high quality businesses. In some cases, we bought the whole business. And in some cases, we just bought a big block of stock. But when you analyze what happened, the big money’s been made in the high quality businesses. And most of the other people who’ve made a lot of money have done so in high quality businesses.”
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