Charlie Munger Quotes

143 Charlie Munger Quotes

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Only in fairy tales are emperors told they are naked.
Charlie Munger

Understanding both the power of compound interest and the difficulty of getting it is the heart and soul of understanding a lot of things.
Charlie Munger

It’s not given to human beings to have such talent that they can just know everything about everything all the time. But it is given to human beings who work hard at it – who look and sift the world for a mispriced bet – that they can occasionally find one.
Charlie Munger

Preparation. Discipline. Patience. Decisiveness.
Charlie Munger

We’re partial to putting out large amounts of money where we won’t have to make another decision. If you buy something because it’s undervalued, then you have to think about selling it when it approaches your calculation of it’s intrinsic value. That’s hard. But, if you can buy a few great companies, then you can sit on your ass. That’s a good thing.
Charlie Munger

How do some people get wiser than other people? Partly it is inborn temperament. Some people do not have a good temperament for investing. They’re too fretful; they worry too much. But if you’ve got a good temperament, which basically means being very patient, yet combine that with a vast aggression when you know enough to do something, then you just gradually learn the game, partly by doing, partly by studying. Obviously the more hard lessons you can learn vicariously, instead of from your own terrible experiences, the better off you will be. I don’t know anyone who did it with great rapidity. Warren Buffett has become one hell of a lot better investor since the day I met him, and so have I. If we had been frozen at any given stage, with the knowledge we had, the record would have been much worse than it is. So the game is to keep learning, and I don’t think people are going to keep learning who don’t like the learning process.
Charlie Munger

I think track records are very important. If you start trying to have a perfect one in some simply thing like honesty, you’re well on your way to success in this world.
Charlie Munger

I’m right, and you’re smart, and sooner or later you’ll see I’m right.
Charlie Munger

If you tell the truth, you don’t have to remember your lies.
Charlie Munger

We think there should be a huge area between what you’re willing to do and what you can do without significant risk of suffering criminal penalty or causing losses. We believe you shouldn’t go anywhere near that line. You ought to have an internal compass. So there should be all kinds of things you won’t do even though they’re perfectly legal. That’s the way we try to operate.
Charlie Munger



I have been associated for many years with a man legendary for good judgement, and 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.
Charlie Munger

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

[On being honest and staying away from the legal line] It helps us make more money. I’d like to believe that we’d behave well even if it didn’t work. But more often, we’ve made extra money from doing the right thing.
Charlie Munger

We’re like the hedgehog that only knows one big thing: If you can generate float [cash from insurance premiums that Berkshire can invest before claims must be paid] at three percent and invest it in businesses that generate thirteen percent, that’s a pretty good business.
Charlie Munger

The future will be harder for Berkshire Hathaway – we’re so big – it limits our investment options. But, something has always turned up.
Charlie Munger

A lot of the businesses we buy [Berkshire Hathaway] are kind of cranky and old-fashioned like us.
Charlie Munger

This is an amazingly sound place. We are more disaster-resistant than most other places. We haven’t pushed it as hard as other people would have pushed it.
Charlie Munger

We’ve going to compound it at a reasonable rate without taking unreasonable risk or using leverage. If we can’t do this, then that’s just too damn hard.
Charlie Munger

[With managers of acquired companies] I would argue that passion is more important than brain power.
Charlie Munger

I’ve been amazed by the growth and cost of our float. It’s wonderful to generate billions of dollars of float at a cost way below treasury notes.
Charlie Munger



Lumpy results and being willing to write less insurance business if market conditions are unfavourable… that is one of our advantages as an insurer – we don’t get a damn about lumpy results. Everyone else is trying to pleasure Wall Street. This is not a small advantage.
Charlie Munger

I think there’s something to be said for developing the disposition to own stocks without fretting.
Charlie Munger

[But] temperament alone won’t do it. You need a lot of curiosity for a long, long, time. 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.
Charlie Munger

Our game is to recognise a big idea when it comes along, when one doesn’t come along very often. Opportunity comes to the prepared mind.
Charlie Munger

The idea that it is hard to find good investments, so concentrate in a few, seems to me to be an obviously good idea. But 98% of the investment world doesn’t think this way. It’s been good four us – and you – [As a Bershire shareholder] – that we’ve done this.
Charlie Munger

What’s funny is that most big investment organizations don’t think like this. They hire lot’s of people, evaluate Merck vs Pfizer and every stock in the S&P 500, and think they can beat the market. You can’t do it.
Charlie Munger

We have this investment discipline of waiting for a fat pitch.
Charlie Munger

Warren once said to me, ‘I’m probably misjudging academia generally [in thinking so poorly of it] because the people that interact with me have bonkers theories.’
Charlie Munger

The idea of excessive diversification is madness. We don’t believe that widespread diversification will yield a good result. We believe almost all good investments will involve relatively low diversification. If you took our top fifteen decisions out, we’d have a pretty average record. It wasn’t hyperactivity, but a hell of a lot of patience. You stuck to your principles, and when opportunities came along, you pounced on them with vigour. Berkshire in it’s history has made money betting on sure things.
Charlie Munger

This is a good lesson for anyone: the ability to take criticism constructively and learn from it.
Charlie Munger



The most extreme mistakes in Berkshire’s history have been mistakes of omission. We saw it, but didn’t act on it. They’re huge mistakes – we’ve lost billions. And we keep on doing it. We’re getting better at it. We never get over it.
Charlie Munger

There are two types of mistakes: 1) doing nothing, what Warren calls ‘sucking my thumb’, and 2) buying with an eyedropper things we should be buying a lot of.
Charlie Munger

Really good investment opportunities aren’t going to come along too often and won’t last too long, so you’ve got to be ready to act. Have a prepared mind.
Charlie Munger

Being short [short selling] and seeing a promoter take the stock up is very irritating. It’s not worth it to have that much irritation in your life.
Charlie Munger

Old moats are getting filled in and new moats are harder to predict, so it’s getting harder.
Charlie Munger

I don’t know anyone who [learned to be a great investor] with great rapidity. Warren has gotten to be one hell of a lot better investor over the period I’ve know him, as have I. So the game is to keep learning. You have to like the learning process. I’ve watched Warren for decades. Warren has learned a lot, which has allowed him to [expand his circle of competence so he could invest in something like Petro China]. If you’ve going to be an investor, you’re going to make some investments where you don’t have all the experience you need. But if you keep trying to get a little better over time, you’ll start to make investments that are virtually certain to have a good outcome. The keys are discipline, hard work and practice. It’s like playing golf – you have to work on it. If you don’t keep learning, other people will pass you by.
Charlie Munger

We just look to do the most intelligent thing we can with the capital that we have. We measure everything against our alternatives.
Charlie Munger

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. It happens over and over and over.
Charlie Munger

Berkshire Hathaway is the largest shareholder of the Coca-Cola Company and has been so since the late 1980’s.
Charlie Munger

It is the nature of many forms of derivatives, and insurance as well, to have ‘long tails’ of exposure. Years can elapse before an actual day of reckoning occurs with respect to loss or gain on an individual transaction. Insurers or financial institutions that incorrectly assess their true exposure often experience the kind of painful lesson Twain refers to. [A man who carries a cat by the tail learns something he can learn in no other way.]
Charlie Munger



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