Acknowledging what you don't know is the dawning of wisdom. Charlie Munger More Quotes by Charlie Munger More Quotes From Charlie Munger You can hire your advisor and then just apply a windage factor, like I used to do when I was a rifle shooter. I'd just adjust for so many miles an hour wind. Or you can learn the basic elements of your advisor's trade. You don't have to learn very much, by the way, because if you learn just a little then you can make him explain why he's right. Charlie Munger rifles elements wind Even if you assume that the whole economy would work better had we never had double taxation, having the envy and resentment of the richest paying low or no taxes screams of injustice. You have to have a fair system. Charlie Munger resentment envy taxation I bet Richard Fuld doesn't have an ounce of contrition. It's just megalomania. When it's like that, you need rules to prevent catastrophe. When banks are borrowing the government's credit rating, you need rules to prevent stupid things. Charlie Munger government stupid needs A different set of incentives from rising in an economic establishment where the rewards system, again, the reinforcement, comes from being a truffle hound. That's what Jacob Viner, the great economist called it: the truffle hound - an animal so bred and trained for one narrow purpose that he wasn't much good at anything else, and that is the reward system in a lot of academic departments. Charlie Munger different purpose animal The SEC does way more good than harm - the last thing I would do is get rid of the SEC...if accounting were thoroughly fixed, a lot of other sins would go away. We're paying a huge price for deterioration of accounting. Charlie Munger deterioration going-away doe Invert, always invert. Charlie Munger invert Being short 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 not-worth-it irritation irritating We may well have a competitive advantage buying decent businesses at decent prices. But they won't be fabulous businesses and fabulous prices. There's too much competition and money out there, with many buyout specialists. Charlie Munger competition too-much may We want very good leaders who have a lot of power. Charlie Munger good-leader leader want Expect hogs to eat a lot more in the presence of a lot of hog wash. Charlie Munger hog I'd rather throw a viper down my shirt front than hire a compensation consultant. Charlie Munger compensation vipers shirts Like the stocks of both Berkshire and Wesco to trade within hailing distance of what we think of as intrinsic value. When it runs up, we try to talk it down. That's not at all common in Corporate America, but that's the way we act. Charlie Munger distance running thinking I'm proud to be associated with the value system at Berkshire Hathaway; I think you'll make more money in the end with good ethics than bad. Charlie Munger ethics proud thinking I've heard that one-half of the students at elite schools want to go into private equity or hedge funds. They want to keep up with their age cohorts at Goldman. This can't possibly end well in terms of meeting these expectations. Charlie Munger age expectations school [With] closet indexing....you're paying a manager a fortune and he has 85% of his assets invested parallel to the indexes. If you have such a system, you're being played for a sucker. Charlie Munger being-played assets fortune It would be easier to screw up American Express than Coke or Gillette, but it's an immensely strong business. Charlie Munger screw-ups strong would-be There are a lot of things in life way more important than money. All that said, some people do get confused. I play golf with a man who says, " What good is health? You can't buy money with it." Charlie Munger confused golf men When it gets into these spikes, with shortages and uproar and so forth, people go bananas, but that's capitalism. Charlie Munger shortage bananas people Kellogg's and Campbell's moats have also shrunk due to the increased buying power of supermarkets and companies like Wal-Mart. The muscle power of Wal-Mart and Costco has increased dramatically. Charlie Munger moats muscles buying A director who gets $150,000 per year from a company and needs the money is not independent. Charlie Munger independent directors years
