№ 76: RIP Charlie Munger (1924-2023)
The investing legend, the goat of common sense and wisdom, and the Vice Chairman of Berkshire Hathaway
In 2015, I was walking along Southbank in London when a man stopped me outside the National Theatre.
He asked if he could interview me on who my heroes were and why I look up to them.
I couldn’t really answer his question, hero-worshipping had never been my thing.
My rationale was that I didn’t really know these famous people, so why would I give them any praise?
However, over the last few years, my hero-worshipping views have changed, and I have found myself inspired by a few people.
I’ve not met most of them; some are even dead, but they’ve made a significant impact on my personal and professional life over the last few years.
In 2001, Warren Buffett gave a talk at the University of Georgia.
He asked the students, “If you could invest in a friend and get 10% of their income for life – who would you pick?”
Once the students answered the question, he asked, “Why would you invest in that person? What character traits do they have?”
Now, they have a list of character traits to adopt.
If I had to apply this question to the list of people who inspire me the most, it’d be, without a doubt, Warren Buffett’s business partner and the Vice Chairman of Berkshire Hathaway, Charlie Munger.
Last night, on the 28th of November 2023, Charlie Munger passed away peacefully in hospital at the age of 99 and 11 months.
I’ve never met him. He doesn’t even know who I am, but to say he’s impacted my personal and professional life in the last two years would be an understatement.
I consider him to be the greatest thinker of the 21st century.
Spend each day trying to be a little wiser than you were when you woke up. Discharge your duties faithfully and well. Systematically you get ahead, but not necessarily in fast spurts. Nevertheless, you build discipline by preparing for fast spurts. 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. — Charlie Munger
He trained as a meteorologist during World War II and then went on to attend law School at Harvard. He started his own law firm, but eventually quit and moved into the world of business and investing.
Aside from law school, Munger has never taken a single course in economics, business, marketing, finance, psychology or accounting.
Yet he has managed to become known for his multidisciplinary mind and is particularly renowned for his insights on business and human behaviour — two topics close to my own heart.
I’ve always been curious about many disciplines, but learning about Charlie Munger’s life finally made me feel comfortable pursuing a multidisciplinary path.
Here are some of my favourite Munger-isms on business, learning, wisdom, life and love.
On Life:
“Assume life will be really tough, and then ask if you can handle it. If the answer is yes, you’ve won.”
“Whenever you think that some situation or some person is ruining your life, it’s actually you who are ruining your life. It’s such a simple idea. Feeling like a victim is a perfectly disastrous way to make go through life. If you just take the attitude that however bad it is in anyway, it’s always your fault and you just fix it as best you can – the so-called “iron prescription” – I think that really works.”
“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.”
“To get what you want, you have to deserve what you want. The world is not yet a crazy enough place to reward a whole bunch of people.”
“All I want to know is where I’m going to die, so I’ll never go there.”
On Learning:
“If you skillfully follow the multidisciplinary path, you will never wish to come back. It would be like cutting off your hands.”
“I paid no attention to the territorial boundaries of academic disciplines and I just grabbed all the big ideas that I could.”
“It’s not supposed to be easy. Anyone who finds it easy is stupid.”
On Human Behaviour
“I try to get rid of people who always confidently answer questions about which they don’t have any real knowledge.”
“Never, ever, think about something else when you should be thinking about the power of incentives.”
“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.”
“Show me the incentives, and I will show you the outcome.”
“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.”
“We recognised early on that smart people do very dumb things, and we wanted to know why and who, so that we could avoid them.”
On Wisdom & Thinking
“Knowing what you don’t know is more useful than being brilliant.”
“Acknowledging what you don’t know is the dawning of wisdom.”
“You don’t have to be brilliant, only a little bit wiser than the other guys, on average, for a long, long time.”
“Take a simple idea, and take it seriously.”
“You must force yourself to consider opposing arguments. Especially when they challenge your best-loved ideas.”
“I spent a lifetime trying to avoid my own mental biases. A.) I rub my own nose into my own mistakes. B.) I try and keep it simple and fundamental as much as I can. And, I like the engineering concept of a margin of safety. I’m a very blocking and tackling kind of thinker. I just try to avoid being stupid. I have a way of handling a lot of problems — I put them in what I call my ‘too hard pile,’ and just leave them there. I’m not trying to succeed in my ‘too hard pile.’”
On Business
“Remember that reputation and integrity are your most valuable assets and can be lost in a heartbeat.”
“Just because you like it does not mean that the world will necessarily give it to you.”
“Everywhere there is a large commission, there is a high probability of a rip-off.”
“The liabilities are always 100 per cent good. It’s the assets you have to worry about.”
“The three things that ruin people: drugs, liquor and leverage.”
On Marriage
“The best way to get a good spouse is to deserve a good spouse.”
“If you want to be happy in marriage, try to improve yourself as a spouse, not change your spouse.”
Even til the end, you were as sharp and witty as ever with your takes on crypto, venture capital and investment banking.
Rest In Peace, Charlie Munger.