If you don’t allow for self-serving bias in the conduct of others, you are, again, a fool.
—Charlie Munger
It’s just so useful dealing with people you can trust and getting all the others the hell out of your life. It ought to be taught as a catechism. … Wise people want to avoid other people who are just total rat poison, and there are a lot of them.
—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.
—Charlie Munger
There isn’t a single formula. You need to know a lot about business and human nature and the numbers… It is unreasonable to expect that there is a magic system that will do it for you.
—Charlie Munger
If you make yourself a very reliable person and stay reliable all your life, faithfully doing whatever you engage to do, it will be very hard for you to fail at anything you want.
—Charlie Munger
If only I had the influence with my wife and children that I have in some other quarters!
—Charlie Munger
The number one idea is to view a stock as an ownership of the business and to judge the staying quality of the business in terms of its competitive advantage. Look for more value in terms of discounted future cash-flow than you are paying for. Move only when you have an advantage.
—Charlie Munger
Never, ever, think about something else when you should be thinking about the power of incentives.
—Charlie Munger
People have always had this craving to have someone tell them the future. Long ago, kings would hire people to read sheep guts. There’s always been a market for people who pretend to know the future. Listening to today’s forecasters is just as crazy as when the king hired the guy to look at the sheep guts.
—Charlie Munger
No wise pilot, no matter how great his talent and experience, fails to use his checklist.
—Charlie Munger
You’re looking for a mispriced gamble. That’s what investing is. And you have to know enough to know whether the gamble is mispriced. That’s value investing.
—Charlie Munger
People should take way less than they’re worth when they are favored by life… I would argue that when you rise high enough in American business, you’ve got a moral duty to be underpaid—not to get all that you can, but to actually be underpaid.
—Charlie Munger
I try to get rid of people who always confidently answer questions about which they don’t have any real knowledge.
—Charlie Munger
I find it quite useful to think of a free market economy—or partly free market economy—as sort of the equivalent of an ecosystem … Just as in an ecosystem, people who narrowly specialize can get terribly good at occupying some little niche. Just as animals flourish in niches, similarly, people who specialize in the business world—and get very good because they specialize—frequently find good economics that they wouldn’t get any other way.
—Charlie Munger
The best armor of old age is a well-spent life preceding it.
—Charlie Munger
Life, in part, is like a poker game, wherein you have to learn to quit sometimes when holding a much-loved hand— you must learn to handle mistakes and new facts that change the odds.
—Charlie Munger
What do you want to avoid? Such an easy answer: sloth and unreliability. If you’re unreliable it doesn’t matter what your virtues are. You’re going to crater immediately. Doing what you have faithfully engaged to do should be an automatic part of your conduct. You want to avoid sloth and unreliability.
—Charlie Munger
Over the very long term, history shows that the chances of any business surviving in a manner agreeable to a company’s owners are slim at best.
—Charlie Munger
A lot of people think if you just had more process and more compliance—checks and double checks and so forth—you could create a better result in the world. Well, Berkshire has had practically no process. We had hardly any internal auditing until they forced it on us. We just try to operate in a seamless web of deserved trust and be careful whom we trust.
—Charlie Munger
Assume life will be really tough, and then ask if you can handle it. If the answer is yes, you’ve won.
—Charlie Munger
Good character is very efficient. If you can trust people, your system can be way simpler. There’s enormous efficiency in good character and dis-efficiency in bad character.
—Charlie Munger
Like Warren, I had a considerable passion to get rich, not because I wanted Ferrari’s—I wanted the independence. I desperately wanted it.
—Charlie Munger
There is no better teacher than history in determining the future… There are answers worth billions of dollars in $30 history book.
—Charlie Munger
If you buy something because it’s undervalued, then you have to think about selling it when it approaches your calculation of its intrinsic value. That’s hard. But if you buy a few great companies, then you can sit on your ass. That’s a good thing.
—Charlie Munger
If all you needed to do is to figure out what company is better than others, everyone would make a lot of money. But that is not the case. They keep raising the prices to the point when the odds change.
—Charlie Munger
We have a history when things are really horrible of wading in when no one else will.
—Charlie Munger
I insist on a lot of time being available almost every day to just sit and think. That is very uncommon in American business. We read and think.
—Charlie Munger
Without numerical fluency, in the part of life most of us inhibit, you are like a one-legged man in an ass-kicking contest.
—Charlie Munger
I know someone who lives next door to what you would actually call a fairly modest house that just sold for $17 million. There are some very extreme housing price bubbles going on.
—Charlie Munger
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. You’d be amazed at how much Warren reads—and how much I read. My children laugh at me. They think I’m a book with a couple of legs sticking out.
—Charlie Munger
Wondering Whom to Read Next?
- Warren Buffett American Investor
- Mohnish Pabrai Indian-American Investor, Philanthropist
- Ray Dalio American Investor
- Henry R. Kravis American Businessman
- T. Boone Pickens American Businessman, Financier
- David Rockefeller American Businessman, Philanthropist
- Peter Thiel American Entrepreneur
- Jesse Lauriston Livermore American Investor
- Richard Rainwater American Investor
- George Soros Hungarian-American Investor
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