Charlie Munger Quotes

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.

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.

Great investing requires a lot of delayed gratification.

I'm not entitled to have an opinion unless I can state the arguments against my position better than the people who are in opposition. I think that I am qualified to speak only when I've reached that state.

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.

A lot of success in life and business comes from knowing what you want to avoid: early death, a bad marriage, etc.

In my whole life, I have known no wise people who didn't read all the time - none ... ZERO.

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

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?

There are two kinds of businesses: The first earns 12%, and you can take it out at the end of the year. The second earns 12%, but all the excess cash must be reinvested - there's never any cash. It reminds me of the guy who looks at all of his equipment and says, 'There's all of my profit.' We hate that kind of business.

I think that, every time you saw the word EBITDA, you should substitute the word "bullshit" earnings.

No wise pilot, no matter how great his talent and experience, fails to use his checklist.

Stock-picking is like gambling: those who win well, seldom bet, but when they do, they bet heavily.

The more hard lessons you can learn vicariously rather than through your own hard experience, the better.

Three rules for a career: 1) Don’t sell anything you wouldn’t buy yourself; 2) Don’t work for anyone you don’t respect and admire; and 3) Work only with people you enjoy.

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

Any year that you don't destroy one of your best-loved ideas is probably a wasted year

We regard using [a stock's] volatility as a measure of risk is nuts. Risk to us is 1) the risk of permanent loss of capital, or 2) the risk of inadequate return. Some great businesses have very volatile returns - for example, See's [a candy company owned by Berkshire] usually loses money in two quarters of each year - and some terrible businesses can have steady results.

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.

I do not think you can trust bankers to control themselves. They are like heroin addicts.

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

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.

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.

We try more to profit from always remembering the obvious than from grasping the esoteric.

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.

I think the reason why we got into such idiocy in investment management is best illustrated by a story that I tell about the guy who sold fishing tackle. I asked him, "My God, they're purple and green. Do fish really take these lures?" And he said, "Mister, I don't sell to fish." Investment managers are in the position of that fishing tackle salesman.

The investment game always involves considering both quality and price, and the trick is to get more quality than you pay for in price. It's just that simple.

The secret to happiness is to lower your expectations. ...that is what you compare your experience with. If your expectations and standards are very high and only allow yourself to be happy when things are exquisite, you'll never be happy and grateful. There will always be some flaw. But compare your experience with lower expectations, especially something not as good, and you'll find much in your experience of the world to love, cherish and enjoy, every single moment.

If you want to understand science, you have to understand math. In business, if you're enumerate, you're going to be a klutz. The good thing about business is that you don't have to know any higher math.

Acknowledging what you don't know is the dawning of wisdom.

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.

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

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

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

Hard work, honesty, if you keep at it, will get you almost anything.

I'm right, and you're smart, and sooner or later you'll see I'm right.

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.

Someone will always be getting richer faster than you. This is not a tragedy.

Berkshire's whole record has been achieved without paying one ounce of attention to the efficient market theory in its hard form. And not one ounce of attention to the descendants of that idea, which came out of academic economics and went into corporate finance and morphed into such obscenities as the capital asset pricing model, which we also paid no attention to. I think you'd have to believe in the tooth fairy to believe that you could easily outperform the market by seven-percentage points per annum just by investing in high volatility stocks.

The wise ones bet heavily when the world offers them that opportunity. They bet big when they have the odds. And the rest of the time, they don't. It's just that simple.

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