How could economics not be behavioral? If it isn't behavioral, what the hell is it? Charlie Munger More Quotes by Charlie Munger More Quotes From Charlie Munger A lot of opportunities in life tend to last a short while, due to some temporary inefficiency... For each of us, 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 and have a prepared mind. Charlie Munger mindopportunitylong 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. Charlie Munger qualitysimplegames Berkshire was built on the eternal verities: basic mathematics, basic horse sense, basic fear, and basic diagnosis of human nature to make predictions regarding human behavior. We stuck to the basics with a certain amount of discipline and it has worked out quite well. Charlie Munger investinghorsediscipline Our job is to find a few intelligent things to do, not to keep up with every damn thing in the world. Charlie Munger investingintelligentjobs 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 Charlie Munger adversitycrazyloss 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. Charlie Munger crazykingssheep If you're going to buy something which compounds for 30 years at 15% per annum and you pay one 35% tax at the very end, the way that works out is that after taxes, you keep 13.3% per annum. In contrast, if you bought the same investment, but had to pay taxes every year of 35% out of the 15% that you earned, then your return would be 15% minus 35% of 15%-or only 9.75% per year compounded. So the difference there is over 3.5%. And what 3.5% does to the numbers over long holding periods like 30 years is truly eye-opening. Charlie Munger differenceseyeyears 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. Charlie Munger opinionpeoplethinking 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. Charlie Munger guymeanpeople It’s not greed that drives the world, but envy. Charlie Munger envygreedworld 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. Charlie Munger overcomingwaitingpeople We all are learning, modifying, or destroying ideas all the time. Rapid destruction of your ideas when the time is right is one of the most valuable qualities you can acquire. You must force yourself to consider arguments on the other side. Charlie Munger learningchangeideas At most corporations if you make an acquisition and it turns out to be a disaster, all the paperwork and presentations that caused the dumb acquisition to be made are quickly forgotten. You've got denial, you've got everything in the world. You've got Pavlovian association tendency. Nobody even wants to even be associated with the damned thing or even mention it. At Johnson & Johnson, they make everybody revisit their old acquisitions and wade through the presentations. That is a very smart thing to do. And by the way, I do the same thing routinely. Charlie Munger acquisitionsmartdumb Just avoid things like racing trains to the crossing, doing cocaine, etc. Develop good mental habits. Charlie Munger etcgood-manracing It's been my experience in life if you just keep thinking and reading, you don't have to work. Charlie Munger readingifsthinking Investing is where you find a few great companies and then sit on your ass. Charlie Munger assinvestinggreat-company If you're 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. Charlie Munger hard-workkeysgolf I think it is undeniably true that the human brain must work in models. The trick is to have your brain work better than the other person's brain because it understands the most fundamental models- ones that will do most work per unit. Charlie Munger fundamentalsbrainthinking A great business at a fair price is superior to a fair business at a great price. Charlie Munger great-businessfairssuperiors The number one idea is to view a stock as an ownership of the business and to judge the staying quality of the business in terms of its competitive advantage. Look for more value in terms of discounted future cash-flow than you are paying for. Move only when you have an advantage. Charlie Munger numbersideasmoving
