You have to know accounting. It's the language of practical business life. It was a very useful thing to deliver to civilization. I've heard it came to civilization through Venice which of course was once the great commercial power in the Mediterranean. However, double entry bookkeeping was a hell of an invention.— Charlie Munger
The most authentic Charlie Munger quotes that are little-known but priceless
The best thing a human being can do is to help another human being know more.
Intelligent people make decisions based on opportunity costs.
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.
Mimicking the herd invites regression to the mean.
I did not succeed in life by intelligence. I succeeded because I have a long attention span.
Creative accounting is an absolute curse to a civilization.
One could argue that double-entry bookkeeping was one of history's great advances. Using accounting for fraud and folly is a disgrace. In a democracy, it often takes a scandal to trigger reform. Enron was the most obvious example of a business culture gone wrong in a long, long time.
The big money is not in the buying and selling ... but in the waiting.
When you locate a bargain, you must ask, 'Why me, God? Why am I the only one who could find this bargain?'
Our job is to find a few intelligent things to do, not to keep up with every damn thing in the world.
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.
No wise pilot, no matter how great his talent and experience, fails to use his checklist.
A lot of success in life and business comes from knowing what you want to avoid: early death, a bad marriage, etc.
I think that, every time you saw the word EBITDA, you should substitute the word "bullshit" earnings.
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?
Great investing requires a lot of delayed gratification.
In my whole life, I have known no wise people who didn't read all the time - none ... ZERO.
I got at a very early age, the idea that the safest way to try and get what you want, is to try and deserve what you want. It’s such a simple idea, it’s the golden rule so to speak. You want to deliver to the world what you would buy if you were on the other end.
The more hard lessons you can learn vicariously rather than through your own hard experience, the better.
We try more to profit from always remembering the obvious than from grasping the esoteric.
Whenever you think something or some person is ruining your life, it's you.
A victimization mentality is so debilitating.
Well the open-outcry auction is just made to turn the brain into mush: you've got social proof, the other guy is bidding, you get reciprocation tendency, you get deprival super-reaction syndrome, the thing is going away... I mean it just absolutely is designed to manipulate people into idiotic behavior.
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.
If you don't keep learning, other people will pass you by.
Temperament alone won't do it - you need a lot of curiosity for a long, long time.
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.
A great business at a fair price is superior to a fair business at a great price.
It's a good habit to trumpet your failures and be quiet about your successes.
I like people admitting they were complete stupid horses' asses.
I know I'll perform better if I rub my nose in my mistakes. This is a wonderful trick to learn.
Step by step you get ahead, but rarely in fast spurts.
If you don't allow for self-serving bias in the conduct of others, you are, again, a fool.
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.
I think it is undeniably true that the human brain must work in models.
The trick is to have your brain work better than the other person's brain because it understands the most fundamental models- ones that will do most work per unit.
You need to have a passionate interest in why things are happening.
That cast of mind, kept over long periods, gradually improves your ability to focus on reality. If you don't have the cast of mind, you're destined for failure even if you have a high I.Q.
If you skillfully follow the multidisciplinary path, you will never wish to come back. It would be like cutting off your hands.
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.
The basic concept of value to a private owner and being motivated when you're buying and selling securities by reference to intrinsic value instead of price momentum - I don't think that will ever be outdated.
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.
In the corporate world, if you have analysts, due diligence, and no horse sense, you've just described hell.
Investing is where you find a few great companies and then sit on your ass.
Acquire worldly wisdom and adjust your behavior accordingly.
If your new behavior gives you a little temporary unpopularity with your peer group then to hell with them.
We're emphasizing the knowable by predicting how certain people and companies will swim against the current. We're not predicting the fluctuation in the current.
The model I like to sort of simplify the notion of what goes on in a market for common stocks is the pari-mutuel system at the racetrack. If you stop to think about it, a pari-mutuel system is a market. Everybody goes there and bets and the odds change based on what's bet. That's what happens in the stock market.
Our experience tends to confirm a long-held notion that being prepared, on a few occasions in a lifetime, to act promptly in scale, in doing some simple and logical thing, will often dramatically improve the financial results of that lifetime.
How do you compete against a true fanatic? You can only try to build the best possible moat and continuously attempt to widen it.
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.
All intelligent investing is value investing - acquiring more that you are paying for. You must value the business in order to value the stock.
The safest way to get what you want is to deserve what you want.
A Lesson on Elementary, Worldly Wisdom As It Relates To Investment Management & Business
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.
Mankind invented a system to cope with the fact that we are so intrinsically lousy at manipulating numbers. It's called the graph.