Quotes by Charlie Munger

“A business model that relies on trickery is doomed to fail.”

“A foreign correspondent, after talking to me for a while, once said: ‘You don’t seem smart enough to be so good at what you’re doing. Do you have an  explanation?'”

“A great business at a fair price is superior to a fair business at a great price.”

“A lot of people with high IQs are terrible investors because they’ve got terrible temperaments.”

“A rough rule in life is that an organization foolish in one way in dealing with a complex system is all too likely to be foolish in another.”

“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.”

“All intelligent investing is value investing, acquiring more than you are paying for. You must value the business in order to value the stock.”

“Anytime 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.”

“Being rational is a moral imperative. You should never be stupider than you need to be.”

“Everybody engaged in complex work needs colleagues. Just the discipline of having to put your thoughts in order with somebody else is a very useful thing.”

“Failure to handle psychological denial is a common way for people to go broke: You have made an enormous commitment to something. You have poured effort and money in. And the more you put in, the more that the whole consistency principle makes you think, ‘Now it has to work. If I put in just a little more, then it will work.'”

“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.”

“For years I have read the morning paper and harrumphed. There’s a lot to harrumph about now.”

“Forgetting your mistakes is a terrible error if you are trying to improve your cognition.”

“I always knew from when I was a little boy that the opportunities that were important that were going to come to me were few and that the trick was to prepare myself for seizing the few that came. This is not the attitude that they have at a big investment council. They think that if they study a million things, they can know a million things.”

“I did not succeed in life by intelligence. I succeeded because I have a long attention span.”

“I don’t have too much interest in teaching other people how to get rich.”

“I don’t invest in what I don’t understand. And I don’t want to understand Facebook.”

“I have a black belt in chutzpah. I was born with it.”

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

“I try to get rid of people who always confidently answer questions about which they don’t have any real knowledge.”

“If it is wisdom you’re after, you’re going to spend a lot of time on your ass reading.”

“If you don’t allow for self-serving bias in the conduct of others, you are, again, a fool.”

“If you don’t keep learning, other people will pass you by. Temperament alone won’t do it. You need a lot of curiosity.”

“If you have competence, you know the edge. It wouldnt be a competence if you didnt know where the boundaries lie. Asking whether you’ve passed the boundary is a question that almost answers itself.”

“If you turn on the television, you’ll find the mothers of the most obvious criminals that man could ever diagnose, and they all think their sons are innocent. That’s simple psychological denial. The reality is too painful to bear, so you just distort it until it’s bearable. We all do that to some extent, and it’s a common psychological misjudgment that causes terrible problems.”

“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.”

“In my life there are not that many questions I can’t properly deal with using my $40 adding machine and dog-eared compound interest table.”

“Intense interest in any subject is indispensable if you’re really going to excel in it.”

“Is there such thing as a cheerful pessimist? That’s what I am.”

“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.”

“It never ceases to amaze me to see how much territory can be grasped if one merely masters and consistently uses all the obvious and easily learned principles.”

“It’s a good habit to trumpet your failures and be quiet about your successes.”

“It’s a rare business that doesn’t have a way worse future than it has a past.”

“It’s dishonorable to stay stupider than you need to be”

“It’s not a competency if you don’t know the edge of it.”

“It’s stupid the way people extrapolate the past. And not slightly stupid, but massively stupid.”

“I’d rather throw a viper down my shirt front than hire a compensation consultant.”

“Just avoid things like racing trains to the crossing, doing cocaine, etc. Develop good mental habits.”

“Mankind invented a system to cope with the fact that we are so intrinsically lousy at manipulating numbers. It’s called the graph.”

“People calculate too much and think too little.”

“Show me the incentive and I will show you the outcome”

“Simplicity has a way of improving performance by enabling us to better understand what we are doing.”

“Spend each day trying to be a little wiser than you were when you woke up.”

“Strategic plans cause more dumb decisions than anything else in America.”

“The best armor of old age is a well-spent life preceding it.”

“The big money is not in the buying or selling, but in the waiting.”

“The first chance you have to avoid a loss from a foolish loan is by refusing to make it. There is no second chance.”

“The game of life is the game of everlasting learning. At least it is if you want to win.”

“The harder you work, the more confidence you get. But you may be working hard on something that is false.”

“The tax code gives you an enormous advantage if you can find some things you can just sit with.”

“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.”

“There are worse situations than drowning in cash and sitting, sitting, sitting. I remember when I wasn’t awash in cash, and I don’t want to go back.”

“There must be some wisdom in the folk saying, ‘It’s the strong swimmers who drown.'”

“There’s no way that you can live an adequate life without making many mistakes.”

“Those of us who have been very fortunate have a duty to give back. Whether one gives a lot as one goes along as I do, or a little and then a lot as Warren [plans to], is a matter of personal preference.”

“Those who will not face improvements because they are changes, will face changes that are not improvements.”

“We both insist on a lot of time being available almost every day to just sit and think. That is very uncommon in American business. We read and think.”

“We have found in a long life that one competitor is frequently enough to ruin a business.”

“We have to have a special insight, or we’ll put it in the ‘too tough’ basket. All of you have to look for a special area of competency and focus on that.”

“We look for a horse with one chance in two of winning and which pays you three to one.”

“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.”

“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.”

“When you locate a bargain, you must ask, ‘Why me, God? Why am I the only one who could find this bargain?'”

“Whenever you think something or some person is ruining your life, it’s you. A victimization mentality is so debilitating.”

“Why should it be easy to do something that, if done well, two or three times, will make your family rich for life?”

“You don’t have to have perfect wisdom to get very rich. Just a bit better than average over a long period of time.”

“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.”