From Peter Bevelin’s “Seeking Wisdom, from Darwin to Munger”
My Favorite Charlie Munger Quotes:
“without lifetime learning, you people are not going to do very well. You are not going to get very far in life based on what you already know. You’re going to advance in life by what you learn after you leave here. I constantly see people rise in life who are not the smartest, sometimes not even the most diligent, but they are learning machines. They go to bed every night a little wiser than they were when they got up and boy does that help, particularly when you have a long run ahead of you”
“I believe in the discipline of mastering the best that other people have ever figured out. I don’t believe in just sitting down and trying to dream it all up yourself. Nobody’s that smart…”
“We recognized early on that very smart people do very dumb things, and we wanted to know why and who, so that we could avoid them.”
“Obviously the more hard lessons you can learn vicariously, instead of from your own terrible experiences, the better off you will be. I don’t know anyone who did it with great rapidity.”
“You must know the big ideas in the big disciplines and use them routinely – all of them, not just a few. Most people are trained in one model – economics, for example – and try to solve all problems in one way. You know the old saying: To the man with a hammer, the world looks like a nail. This is a dumb way of handling problems.”
“If you’re interested in wisdom, (Psychology) ought to be part of your repertoire- like mathematics of permutations and combinations.”
“You must force yourself to consider opposing arguments. Especially when they challenge your best loved ideas.”
“People tend to accumulate large mental holdings of fixed conclusions and attitudes that are not often reexamined or changed, even though there is plenty of good evidence that they are wrong.”
“I’m not entitled to have an opinion on this subject unless I can state the arguments against my position better than the people who support it. I think only when I’ve reached that state I am qualified to speak.”
“The ability to destroy your ideas rapidly instead of slowly when the occasion is right is one of the most valuable things. You have to work hard on it. Ask yourself what are the arguments on the other side. It’s bad to have an opinion you’re proud of if you can’t state the arguments for the other side better than your opponents. This is a great mental discipline.”
“If people tell you what you really don’t want to hear- what’s unpleasant- there’s an almost automatic reaction of antipathy. You have to train yourself out of it.”
“I think one should recognize reality even when one doesn’t like it, indeed, especially when one doesn’t like it.”
“Conduct yourself in life so other people trust you. It helps even more if they’re right to trust you”
“I try to get rid of people who always confidently answer questions about which they don’t have any real knowledge. To me, they’re like the bee dancing it incoherent dance. They’re just screwing up the hive.”
“If you don’t get this elementary, but mildly unnatural, mathematics of elementary probability into your repertoire, then you go through a long life like a one–legged man in an ass–kicking contest. You’re giving a huge advantage to everybody else.”
“If you think your IQ is 160 but it’s 150, you’re a disaster. It’s much better to have a 130 IQ and think it’s 120.”
“I have three basic rules. Meeting all three is nearly impossible, but you should try anyway:
- Don’t sell anything you wouldn’t buy yourself.
- Don’t work for anyone you don’t respect and admire.
- Work only with people you enjoy.
I have been incredibly fortunate in my life: with Warren I had all three.”
“What is elementary, worldly wisdom? Well, the first rule is that you can’t really know anything if you just remember isolated facts and try and bang ’em back. If the facts don’t hang together on a latticework of theory, you don’t have them in a usable form.”
“You’ve got to have models in your head. And you’ve got to array your experience – both vicarious and direct – on this latticework of models. You may have noticed students who just try to remember and pound back what is remembered. Well, they fail in school and fail in life. You’ve got to hang experience on a latticework of models in your head.”
“No wise pilot, no matter how great his talent and experience, fails to use a checklist.”
“The best thing a human being can do is to help another human being know more.”
“Whenever you think that something or some person is ruining your life, it’s you. A victimization mentally is so debilitating. It is actually you who are ruining your life… 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 any way, it’s always your fault and you just fix it as best as you can—the so called ‘iron prescription’—I think that really works.”
“the 5 Ws- you had to tell Who was going to do What, Where, When, and Why. If you always tell people why, they’ll understand it better, they’ll consider it more important, and they’ll be more likely to comply. Even if they don’t understand your reason, they’ll be more likely to comply.”
“So there’s an iron rule that just as you want to start getting worldly wisdom by asking why, why, why in communication with other people about everything.”
“It is really useful to be reminded of your errors. I think we’re [Warren Buffett and Charlie Munger] pretty good at that. We do kind of mentally rub our own noses in our own mistakes. And that is a very good mental habit.“
“Invert, always invert: Turn a situation or problem upside down. Look at it backward. What happens if all our plans go wrong? Where don’t we want to go, and how do you get there? Instead of looking for success, make a list of how to fail instead – through sloth, envy, resentment, self-pity, entitlement, all the mental habits of self-defeat. Avoid these qualities and you will succeed. Tell me where I’m going to die, that is, so I don’t go there.”
“When a better tool (idea or approach) comes along, what could be better than to swap it for your old, less useful tool? Warren and I routinely do this, but most people, as Galbraith says, forever cling to their old, less useful tools.”
“Einstein said his successful theories came from curiosity, concentration, perseverance, and self-criticism.”
“Other people are trying to be smart, all I’m trying to be is non-idiotic. I’ve found that’s all you have to do to get ahead in life, be non-idiotic and live a long time. It’s harder to be non-idiotic than most people think.”
“You must have the confidence to override people with more credentials than you whose cognition is impaired by incentive-caused bias or some similar psychological force that is obviously present. But there are also cases where you have to recognize that you have no wisdom to add- and that your best course is to trust some expert.”
“Smart, hard-working people aren’t exempt from professional disasters resulting from overconfidence.”
“For many people it’s good that they’re extra busy. They’re not good thinkers, so you get more out of them if they just keep doing what they’re doing. But if you’re a person of good cognition, you can learn a lot more if you put your mind to it. I don’t think there’s any substitute for just sitting and thinking”
“Human nature always has incentives to rationalize and misbehave”
“It’s just so useful dealing with people you can trust and getting all the others the hell out of your life… Wise people want to avoid other people who are just total rat poison, and there are a lot of them.”
“Well, luckily I had the idea at a very early age that 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 a 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 honors. They win the respect, the deserved trust of people they deal with. And there is a huge pleasure in life to be obtained from getting deserved trust”
“I have never succeeded very much in anything in which I was not very interested. If you can’t somehow find yourself very interested in something, I don’t think you’ll succeed very much, even if you’re fairly smart. I think that having this deep interest in something is part of the game. If your only interest is Chinese calligraphy, I think that’s what you’re going to have to do. I don’t see how you can succeed in astrophysics if you’re only interested in calligraphy.”
“When I was young, I read The Richest Man in Babylon, which said to under-spend your income and invest the difference. Lo and behold, I did this and it worked.”
“This modern generation, which has gotten so good at doing two or three things at once- multi-tasking, aided by electronic devices- I’ll confidently predict will end up worse than people more like Warren Buffett with more solitary reading time and less trying to do three things at once”- Munger (p.6)
“If I could just avoid all the folly, maybe I could get an advantage without having to be really good at anything…And so this process I have gone through life identifying folly and trying to avoid it has worked out wonderfully for me“- Munger (p.11)
“The more hard lessons you can learn vicariously rather than through your own hard experience, the better.” – Munger (p. 19)
“You have to practice the right decision-making process and be skeptical of conventional wisdom. Keep your head when everyone else is losing theirs…You don’t have to go crazy because everybody else is.” – Munger (p. 49)
“Why are we different? We’re working harder at trying to be rational. If you don’t work hard at it, and just float along, you will fall victim to the folly of the crowd- and there will always be folly of the crowd.”- Munger (p. 49)
“You may well say, ‘Who wants to go through life anticipating trouble?’ Well, I did, trained as I was. All my life I’ve gone through life anticipating trouble…It didn’t make me unhappy to anticipate trouble all the time and the time and be ready to perform adequately if trouble came. It didn’t hurt me at all. In fact in helped me.” Munger (p. 62)
“If you’re comfortably rich and someone else is getting richer faster than you by…so what?! Someone will always be getting richer faster than you. This is not a tragedy…someone else is always going to be doing better at any human activity you can name.” – Munger (p. 66)
“I hardly know anybody who’s done very well in life in terms of cognition that doesn’t have somebody trusted to talk to. Einstein would not have been able to do what he did without people to talk to…” – Munger (p. 90)
“It is easy to see that a quickly reached conclusion…combined with a tendency to resist any change in that conclusion, will naturally cause a lot of errors in cognition for modern man.” – Munger (p. 96)
“No matter how bad some humans have handled things, they are just keeping their previous conclusions. It’s the normal way of handling things for humans.” – Munger (p. 96)
“It’s very hard to change people when the incentives are in the opposite direction.” – Munger (p.97)
“When a better tool comes along (idea or approach), what could be better than to swap it for your old, less useful tool? Warren and I routinely do this, but most people, as Galbraith says, forever cling to their old, less useful tools.” – Munger (p. 98)
“I find it amazing how difficult intelligent people have to change their minds- no matter how wrong they are” – Munger (p. 98)
“If you minimize objectivity, you ignore not only a lesson from Darwin but also one from Einstein. Einstein said that his successful theories came from ‘Curiosity, concentration, perseverance, and self-criticism’…By self-criticism, he meant becoming good at destroying your own best-loved and hardest-won ideas.” – Munger (p. 100)
“Similarly, other modern decision makers will often force groups to consider skillful counterarguments before making decisions.” – Munger (p. 101)
“You can’t avoid wrong decisions. But if you recognize them promptly and do something about them, you can frequently turn the lemon into lemonade.” – Munger (p. 102)
“A man ordinarily reacts with irrational intensity to even a small loss, or threatened loss, of property, love, friendship, dominated territory, opportunity: status, or any other valued thing.” – Munger (p. 104)
“man…will often compare what is near instead of what really matters. For instance, a man with $10 million in his brokerage account will often be extremely irritated by the accidental loss of $100 out of the $300 in his wallet” – Munger (p. 104)
“One of the best antidotes to this folly is a good poker skill learned young…fold early when the odds are against you…rethink and say, ‘I can afford to write this one off and live to fight again. I don’t have to pursue this thing as an obsession- in a way that will break me.'” – Munger (p. 106)
“If you and a friend are discussing Old Joe and that he suffers from some of these tendencies it is OK but if you tell Joe directly he is suffering from some of these tendencies he will become very hostile.” – Munger (p. 107)
“The self-serving bias of man is very extreme and should have been used in attaining the correct outcome…You want to persuade somebody, you really tell them why…Incentive..matter..Vivid evidence..works.” – Munger (p. 109)
“Ask yourself what are the arguments on the other side…The study of the law is good for people in that it constantly ask you to consider one side and then consider the other- what arguments can be made on one side and then on the other as you seek to determine which rule of law would be better and why. That process sort of forces objectivity…It’s a huge plus.” – Munger (p. 112)
“Because both bad and good behavior are made contagious by Social-Proof Tendency, it is highly important that human societies (1) stop any bad behavior before it spreads and (2) foster and display all good behavior.” – Munger (p. 119)
“You can’t blame the tiger for being a tiger. But you need a gamekeeper… It is insane to blame the tiger when he gets out of the cage and goes on a rampage. The cage has to be stronger and the keepers should know better than to leave the door unlocked.” – Munger (p. 125)
“I’ve always felt that people were crazy to risk what they have and need- namely, wonderful jobs- for tiny, little, incremental advantages or to avoid tiny, little incremental detriments.” – Munger (p. 125)
“If you stay rational yourself, the stupidity of the world helps you.” – Munger (p. 141)
“I have a habit in life. I observe what works and what doesn’t and why.” I do it automatically…If you have that temperament, you will gradually learn. If you don’t, then I can’t help you.” – Munger (p. 169)
“Some of the most important miscalculations come from what is accidentally associated with one’s past success.” – Munger (p. 170)
“The proper antidotes to being made…a patsy by past success are (1) to carefully examine each past success, looking for accidental, noncausative factors associated with such success that will tend to mislead as one appraises odds implicit in a proposed new undertaking and (2) to look for dangerous aspects of the new undertaking that were not present when past success occurred.” -Munger (P. 171)
“Projections generally do more harm than good- especially when they are prepared by the people who desire a certain outcome.”- Munger (p. 171)
“Those who will not face improvements because there are changes will face changes that are not improvements.” – Munger (p. 174)
“In business, I commonly see people underappraise both the competency and morals of competitors they dislike. This is a dangerous practice, usually disguised because it occurs on a subconscious basis.” – Munger (p. 176)
“The secret to being successful in any field is getting very interested in it…I could force myself to be fairly good in a lot of things, but I couldn’t excel in anything in which I didn’t have an intense interest.” – Munger (p. 181
“You have to go to bed wiser than you got up. As you try to master what you are trying to do – people who do that almost never fail utterly. Very few have ever failed with that approach. You may rise slowly, but you are sure to rise.” – Munger (p. 184)
“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. It happens over and over and over.” – Munger (p. 186)
“You’d be amazed at how much Warren reads- and at how much I read.” “Nothing has served me better in my long life than continuous learning.” – Munger (p. 224)
“I think if you assimilate everything in that simple book, you’ll know a lot more than about 95% of your compatriots. And it’s not hard to do. So Peter Kaufman has made it easy for you.” – Munger (p. 224)
“It helps to have a generalized competency in dealing with words, and numbers and quantities, and concepts. Of course, it helps to practice with that competency. And if you then collect follies the way I do and stay away from the follies, when you’re as old as I am, you’ll be rich old man.” – Munger (p. 224)
“There’s nothing remarkable about it. I don’t have any wonderful insights that other people don’t have. Just slightly more consistently than others, I’ve avoided idiocy…All I’m trying to be is be non-idiotic. I find that’s all you have to do to get ahead in life is to be non-idiotic and live a long time.” – Munger (p. 225)