Munger's Quotes

#1. Any time anybody offers you anything with a big commission and a 200-page prospectus, don't buy it. Occasionally, you'll be wrong if you adopt "Munger's Rule". However, over a lifetime, you'll be a long way ahead-and you will miss a lot of unhappy experiences.

Charlie Munger

#2. There's more honor in investment management than in investment banking.

Charlie Munger

#3. Cicero's words also increased my personal satisfaction by supporting my long-standing rejection of a conventional point of view.

Charlie Munger

#4. The idea of caring is that someone is making money faster [than you are] is one of the deadly sins. Envy is a really stupid sin because it's the only one you could never possibly have any fun at. There's a lot of pain and no fun. Why would you want to get on that trolley?

Charlie Munger

#5. What good is envy? It's the one sin you can't have any fun at.

Charlie Munger

#6. If all you succeed in doing in life is getting rich by buying little pieces of paper, it's a failed life. Life is more than being shrewd in wealth accumulation.

Charlie Munger

#7. Most people are too fretful, they worry to much. Success means being very patient, but aggressive when it's time.

Charlie Munger

#8. The stupid and dishonest accountants allowed the genie of totally inappropriate accounting to descend on derivatives books. And once this has happened - people get status, etc. - it's impossible to get it back into the bottle.

Charlie Munger

#9. Missing out on some opportunity never bothers us. What's wrong with someone getting a little richer than you? It's crazy to worry about this ...

Charlie Munger

#10. Well in the history of the See's Candy Company they always say, "I never did it before, and I'm never going to do it again." And we cashier them. It would be evil not to, because terrible behavior spreads.

Charlie Munger

#11. In Gillette's case, they keep surfing along new technology which is fairly simple by the standards of microchips. But it's hard for competitors to do. So they've been able to stay constantly near the edge of improvements in shaving.

Charlie Munger

#12. Fancy computers are engaging in legalized front-running. The profits are clearly coming from the rest of us - our college endowments and our pensions. Why is this legal? What the hell is the government thinking? It's like letting rats into a restaurant.

Charlie Munger

#13. Berkshire's past record has been almost ridiculous. If Berkshirehad used even half the leverage of, say, Rupert Murdoch, it would be five times its current size.

Charlie Munger

#14. Buffett and Munger joke that envy is the only one of the seven deadly sins that isn't any fun. "Envy is crazy," remarks Munger. "It's 100 percent destructive. . . . If you get those things out of your life early, life works a lot better.

Guy Spier

#15. Of course the self-serving bias is something you want to get out of yourself. Thinking that what's good for you is good for the wider civilization and rationalizing all these ridiculous conclusions based on this subconscious tendency to serve one's self is a terribly inaccurate way to think.

Charlie Munger

#16. There's danger in just shoveling out money to people who say, 'My life is a little harder than it used to be.' At a certain place you've got to say to the people, 'Suck it in and cope, buddy. Suck it in and cope.'

Charlie Munger

#17. The whole concept of dividing it up into 'value' and 'growth' strikes me as twaddle. It's convenient for a bunch of pension fund consultants to get fees prattling about and a way for one advisor to distinguish himself from another. But, to me, all intelligent investing is value investing.

Charlie Munger

#18. To atone, I teach and try to set an example ... I love spreading this stuff around. Just because it's trite doesn't mean it isn't right. In fact, I like to say, 'If it's trite, it's right.'

Charlie Munger

#19. If it happens every year like clockwork, what's so extraordinary about it?

Charlie Munger

#20. I think the main figure that matters to all of us, including people in the media, is: How does GDP per capita grow? And those figures have been very good. There is a huge flux both up and down, so it isn't like we're all static in status. What's important is that pie grows.

Charlie Munger

#21. I think we have some special talents. That being said, I think it's dangerous to rely on special talents - it's better to own lots of monopolistic businesses with unregulated prices. But that's not the world today. We have made money exercising our talents and will continue to do so.

Charlie Munger

#22. What's the best way to get a good spouse? The best single way is to deserve a good spouse because a good spouse is by definition not nuts.

Charlie Munger

#23. It's hard to predict what will happen with two brands in a market. Sometimes they will behave in a gentlemanly way, and sometimes they'll pound each other. I know of no way to predict whether they'll compete moderately or to the death. If you could figure it out, you could make a lot of money.

Charlie Munger

#24. Whenever you think something or some person is ruining your life, it's you. A victimization mentality is so debilitating.

Charlie Munger

#25. It takes almost no capital to open a new See's candy store. We're drowning in capital of our own that has almost no cost. It would be crazy to franchise stores like some capital-starved pancake house. We like owning our own stores as a matter of quality control.

Charlie Munger

#26. We don't have an isolated group [of senior managers] surrounded by servants. Berkshire's headquarters is a tiny little suite. We just came back from Berkshire's board meeting; it had moved up to the board room of the Kiewit company and [it was so large and luxurious that] I felt uncomfortable.

Charlie Munger

#27. To me, it's obvious that the winner has to bet very selectively. It's been obvious to me since very early in life. I don't know why it's not obvious to very many other people.

Charlie Munger

#28. When you borrow a man's car, always return it with a tank of gas.

Charlie Munger

#29. It's natural that you'd have more brains going into money management. There are so many huge incomes in money management and investment banking - it's like ants to sugar. There are huge incentives for a man to take up money management as opposed to, say, physics, and it's a lot easier.

Charlie Munger

#30. For years I have read the morning paper and harrumphed. There's a lot to harrumph about now.

Charlie Munger

#31. Move only when you have an advantage. It's very basic. You have to understand the odds and have the discipline to bet only when the odds are in your favor.

Charlie Munger

#32. 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

#33. When it gets into these spikes, with shortages and uproar and so forth, people go bananas, but that's capitalism.

Charlie Munger

#34. I'm very pleased when the smartest people come [to the U.S.] and almost never pleased when the very bottom of the mental barrel comes in ...

Charlie Munger

#35. 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

#36. It's a rare business that doesn't have a way worse future than it has a past.

Charlie Munger

#37. Wells Fargo behaves better than the average big bank. But nobody's perfect.

Charlie Munger

#38. It's not the bad ideas that do you in, but the good ones.

Charlie Munger

#39. The beauty of a financial institution is that there are a lot of ways to go to hell in a bucket. You can push credit too far, do a dumb acquisition, leverage yourself excessively - it's not just derivatives [that can bring about your downfall].

Charlie Munger

#40. Rationality is not just something you do so that you can make more money, it is a binding principle. Rationality is a really good idea. You must avoid the nonsense that is conventional in one's own time. It requires developing systems of thought that improve your batting average over time.

Charlie Munger

#41. I bet Richard Fuld doesn't have an ounce of contrition. It's just megalomania. When it's like that, you need rules to prevent catastrophe. When banks are borrowing the government's credit rating, you need rules to prevent stupid things.

Charlie Munger

#42. Mankind invented a system to cope with the fact that we are so intrinsically lousy at manipulating numbers. It's called the graph.

Charlie Munger

#43. Bernie Ebbers and Ken Lay were caricatures - they were easy to spot. They were almost psychopaths. But it's much harder to spot problems at companies like Royal Dutch [Shell].

Charlie Munger

#44. I think the foundation at Berkshire [Buffett's stake in Berkshirewill pass to the Buffett Foundation upon his death] will be a plus because there will be a continuation of the culture. We'd still take in fine businesses run by people who love them.

Charlie Munger

#45. When I run into a paradox I think either I'm a total horse's ass to have gotten to this point, or I'm fruitfully near the edge of my discipline. It adds excitement to life to wonder which it is.

Charlie Munger

#46. It's dishonourable to stay stupider than you need to be

Charlie Munger

#47. After nearly making a terrible mistake not buying See's, we've made this mistake many times. We are apparently slow learners. These opportunity costs don't show up on financial statements, but have cost us many billions.

Charlie Munger

#48. Bull markets go to people's heads. If you're a duck on a pond, and it's rising due to a downpour, you start going up in the world. But you think it's you, not the pond.

Charlie Munger

#49. It's human nature to extrapolate the recent past into the future, but it's terrible that managements go along with this.

Charlie Munger

#50. All man's desired geometric progressions, if a high rate of growth is chosen, at last come to grief on a finite earth. And the social system for man on earth is fair enough, eventually, that almost all massive cheating ends in disgrace.

Charlie Munger

#51. In engineering, people have a big margin of safety. But in the financial world, people don't give a damn about safety. They let it balloon and balloon and balloon. It's aided by false accounting.

Charlie Munger

#52. By regularly reading business newspaper and magazines I am exposed to an enormous amount of material at the micro level.. I find that what I see going on there pretty much informs me about what's happening at the macro level.

Charlie Munger

#53. To some extent, stocks are like Rembrandts. They sell based on what they've sold in the past. Bonds are much more rational. No-one thinks a bond's value will soar to the moon.

Charlie Munger

#54. I've adopted the guideline of Warren Buffett's partner, Charlie Munger, who says I wanna know where I'll be when I die - so I never go there.

Tom Brokaw

#55. 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

#56. 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.

Charlie Munger

#57. It took us months of buying all the Coke stock we could to accumulate $1 billion worth - equal to 7% of the company. It's very hard to accumulate major positions.

Charlie Munger

#58. Is there such thing as a cheerful pessimist? That's what I am.

Charlie Munger

#59. Well, the questioner came from Singapore which has perhaps the best economic record in the history of developing an economy and therefore he referred to 15% per annum as modest. It's not modest-it's arrogant. Only someone from Singapore would call it modest.

Charlie Munger

#60. There is the sheer amount of Franklin's wisdom. And the talent. Franklin played four instruments. He was the nation's leading scientist and inventor, plus a leading author, statesman, and philanthropist. There has never been anyone like him.

Charlie Munger

#61. Some people seem to think there's no trouble just because it hasn't happened yet. If you jump out the window at the 42nd floor and you're still doing fine as you pass the 27th floor, that doesn't mean you don't have a serious problem. I would want to address the problem right now.

Charlie Munger

#62. It's stupid the way people extrapolate the past
and not slightly stupid, but massively stupid.

Charlie Munger

#63. I'm used to people with very high IQs knowing how to recognize reality, but there's a huge human tendency where it may be instructive to think that whatever you're doing to succeed is all right.

Charlie Munger

#64. If you, like me, lived through 1973-74 or even the early 1990s ... There was a waiting list to get OUT of the country club - that's when you know things are tough. If you live long enough, you'll see it.

Charlie Munger

#65. It's waiting that helps you as an investor, and a lot of people just can't stand to wait. If you didn't get the deferred-gratification gene, you've got to work very hard to overcome that.

Charlie Munger

#66. The laws of thermodynamic s are such that if the water is getting warmer - and I believe it is - the energy of the weather is going to go up.

Charlie Munger

#67. I think the idea that the hedge fund manager gets lower taxes than the taxi driver or the physics professor is insane. The legislators who leave that policy in place are derelict in their duties to be rational and fair. There are plenty of them in both political parties. It's totally outrageous.

Charlie Munger

#68. The average result has to be the average result. By definition, everybody can't beat the market. As I always say, the iron rule of life is that only 20% of the people can be in the top fifth. That's just the way it is.

Charlie Munger

#69. It's a good habit to trumpet your failures and be quiet about your successes.

Charlie Munger

#70. Here's one truth that perhaps your typical investment counselor 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.

Charlie Munger

#71. Kellogg's and Campbell's moats have also shrunk due to the increased buying power of supermarkets and companies like Wal-Mart. The muscle power of Wal-Mart and Costco has increased dramatically.

Charlie Munger

#72. It's not supposed to be easy. Anyone who finds it easy is stupid.

Charlie Munger

#73. We don't train executives, we find them. If a mountain stands up like Everest, you don't have to be a genius to figure out that it's a high mountain.

Charlie Munger

#74. Once you get into debt, it's hell to get out. Don't let credit card debt carry over. You can't get ahead paying eighteen percent.

Charlie Munger

#75. Like the stocks of both Berkshire and Wesco to trade within hailing distance of what we think of as intrinsic value. When it runs up, we try to talk it down. That's not at all common in Corporate America, but that's the way we act.

Charlie Munger

#76. Once you start doing something bad, then it's easy to take the next step - and in the end, you're a moral sewer.

Charlie Munger

#77. Black-Scholes works for short-term options, but if it's a long-term option and you think you know something [about the underlying asset], it's insane to use Black-Scholes.

Charlie Munger

#78. We may well have a competitive advantage buying decent businesses at decent prices. But they won't be fabulous businesses and fabulous prices. There's too much competition and money out there, with many buyout specialists.

Charlie Munger

#79. A few public hangings will really change behavior. One of our Presidents said if he could execute three people each year for no cause, it would make it a lot easier to govern. When someone said that's not enough, he said, "Oh yes it is, because I'd publish the list of people under consideration."

Charlie Munger

#80. 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

#81. Our success has come from the lack of oversight we've provided, and our success will continue to be from a lack of oversight. But if you're going to provide minimal oversight, you have to buy carefully. It's a different model from GE's. GE's works - it's just very different from ours.

Charlie Munger

#82. See's candy company was the first high-quality business we ever bought.

Charlie Munger

#83. For some odd reason, I had an early and extreme multidisciplinary cast of mind. I couldn't stand reaching for a small idea in my own discipline when there was a big idea right over the fence in somebody else's discipline. So I just grabbed in all directions for the big ideas that would really work.

Charlie Munger

#84. It's dangerous to short stocks.

Charlie Munger

#85. There's no way that you can live an adequate life without making many mistakes.

Charlie Munger

#86. The liabilities are always 100 percent good. It's the assets you have to worry about.

Charlie Munger

#87. 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.

Charlie Munger

#88. Berkshireis not as good as it was in terms of percentage compounding [going forward], but it's still a hell of a business.

Charlie Munger

#89. I believe Costco does more for civilization than the Rockefeller Foundation. I think it's a better place. You get a bunch of very intelligent people sitting around trying to do good, I immediately get kind of suspicious and squirm in my seat.

Charlie Munger

#90. I never allow myself to have an opinion on anything that I don't know the other side's argument better than they do.

Charlie Munger

#91. It's simplicity itself that its future will be way worse than its past.

Charlie Munger

#92. Why would you want to invest with a guy whose thought process says, If a second layer of fees is good, then let's add a third layer.

Charlie Munger

#93. Being short and seeing a promoter take the stock up is very irritating. It's not worth it to have that much irritation in your life.

Charlie Munger

#94. I know just enough about thermodynamics to understand that if it takes too much fossil-fuel energy to create ethanol, that's a very stupid way to solve an energy problem.

Charlie Munger

#95. The quality of the medical care delivered, including the pharmaceutical industry, has improved a lot. I don't think it's crazy for a rich country like the USto spend 15% of GDP on healthcare, and if it rose to 16-17%, it's not a big worry.

Charlie Munger

#96. If the same family were always on the bottom, then you'd have big resentments. But if DuPonts go down and Pampered Chef up, [that's good]. That much churn makes people think the system is fairer. Buffett: We don't like churn now, but we liked it more 30-40 years ago.

Charlie Munger

#97. The ethos of not fooling yourself is one of the best you could possibly have. It's powerful because it's so rare.

Charlie Munger

#98. You have to realize the truth of biologist Julian Huxley's idea that 'Life is just one damn relatedness after another' So you must have the models, and you must see the relatedness and the effects from the relatedness.

Charlie Munger

#99. Opportunity cost is a huge filter in life. If you've got two suitors who are really eager to have you and one is way the hell better than the other, you do not have to spend much time with the other. And that's the way we filter out buying opportunities.

Charlie Munger

#100. There are all kinds of wonderful new inventions that give you nothing as owners except the opportunity to spend a lot more money in a business that's still going to be lousy. The money still won't come to you. All of the advantages from great improvements are going to flow through to the customers.

Charlie Munger