The Worldly Wisdom of Charlie Munger

The passing on of a hero

When a person dies whom you have only known from afar and who did not know someone like you existed, and yet, you feel a deep sense of loss, then it means the person has made a difference in your life. Today I silently mourn the passing away of Charlie Munger.

When I first started investing in 2000, it did not take long to stumble upon Warren Buffett and from him on to Charlie Munger. Over the years, Charlie has spent much less time talking about investing and more on “worldly wisdom”.

Both Buffett and Munger are my heroes and grandfather figures. I have learnt so much from them about leading a good and honourable life.

Charlie’s focus on what he called a “latticework of mental models” attracted me very quickly because I was made of the same mould (or so I would like to think) of assimilating knowledge across multiple domains.

The other thing that attracted me to Charlie was his candour. He was very clear that he wanted to be rich because he wanted to be free to pursue his passions. Over the years, I have collected his sayings and quotes and some are etched in my mind and in my life and have become my life mantras. I am putting them here more as a reminder to myself and to remember him today.

• “People are trying to be smart—all I am trying to do is not to be idiotic, but it’s harder than most people think.”
• “I don’t think anything that any average person can do easily is likely to be worthwhile.”
• “Nobody survives open heart surgery better than the guy who didn’t need the procedure in the first place.”
• “I succeeded because I have a long attention span.”
• “Smart people aren’t exempt from professional disasters from overconfidence.”
• “I think that one should recognize reality even when one doesn’t like it; indeed, especially when one doesn’t like it.”
• “Spend each day trying to be a little wiser than you were when you woke up. Discharge your duties faithfully and well. Slug it out one inch at a time, day by day. At the end of the day— if you live long enough— most people get what they deserve.”
• “We all are learning, modifying, or destroying ideas all the time. Rapid destruction of your ideas when the time is right is one of the most valuable qualities you can acquire. You must force yourself to consider 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.”
• “A lot of success in life and business comes from knowing what you want to avoid: early death, a bad marriage, etc.”
• “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.”
• “People calculate too much and think too little.”
• “What the hell do I care if somebody else makes money faster?” There’s always going to be somebody who is making money faster, running the mile faster or what have you. So in a human sense, once you get something that works fine in your life, the idea of caring terribly that somebody else is making money faster strikes me as insane.”
• “It’s a good habit to trumpet your failures and be quiet about your successes.”
• “If (investing) weren’t a little difficult, everybody would be rich.”
• “A lot of people with high IQs are terrible investors because they’ve got terrible temperaments. And that is why we say that having a certain kind of temperament is more important than brains. You need to keep raw irrational emotion under control. You need patience and discipline and an ability to take losses and adversity without going crazy. You need an ability to not be driven crazy by extreme success.”
• “Our biggest mistakes, were things we didn’t do, companies we didn’t buy.”
• “We just keep our heads down and handle the headwinds and tailwinds as best we can, and take the result after a period of years.”
• “If you can buy the best companies, over time the pricing takes care of itself.”
• “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 – at how much I read. My children laugh at me. They think I’m a book with a couple of legs sticking out.”
• “Whenever you think something or some person is ruining your life, it’s you. A victimization mentality is so debilitating.”
• “You don’t have to have perfect wisdom to get very rich – just a bit better than average over a long period of time.”
• “The way to win is to work, work, work, work and hope to have a few insights…. And you’re probably not going to be smart enough to find thousands in a lifetime. And when you get a few, you really load up. It’s just that simple.”
• “Why should it be easy to do something that, if done well, two or three times, will make your family rich for life?”

Charlie Munger has passed away today. But he will live on in thousands of his followers who learnt so much from him and hopefully, we will be able to pass on a part of our learnings to the next generation.

Let me end this with a video where Charlie speaks on a number of topics close to his heart.

A Conversation with Charlie Munger (U Michigan)- 2010