It's a finite and very competitive world. All large aggregations of capital eventually find it hell on earth to grow and thus find a lower rate of return. Charlie Munger More Quotes by Charlie Munger More Quotes From Charlie Munger [In picking stocks] You really have to know a lot about business. You have to know a lot about competitive advantage. You have to know a lot about the maintainability of competitive advantage. You have to have a mind that quantifies things in terms of value. And you have to be able to compare those values with other values available in the stock market. Charlie Munger advantage able mind While no real money came down, my family gave me a good education and a marvelous example of how people should behave, and in the end that was more valuable than money. Being surrounded by the right values from the beginning is an immense treasure. Warrenhad that. It even has a financial advantage. Charlie Munger real example people A lot of share-buying, not bargain-seeking, is designed to prop stock prices up. Thirty to 40 years ago, it was very profitable to look at companies that were aggressively buying their own shares. They were motivated simply to buy below what it was worth. Charlie Munger buying looks years 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? Charlie Munger pain stupid fun 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. Charlie Munger single-mom gratitude grateful We're the tortoise that has outrun the hare because it chose the easy predictions. Charlie Munger tortoises predictions easy Is there such thing as a cheerful pessimist? That's what I am. Charlie Munger pessimist cheerful Spend less than you make; always be saving something. Put it into a tax-deferred account. Over time, it will begin to amount to something. This is such a no-brainer. Charlie Munger accounts taxes saving 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. Charlie Munger believe ideas thinking A board member should be perfectly willing to leave at any time and willing to make the tough calls. Charlie Munger tough boards should Mutual funds charge 2% per year and then brokers switch people between funds, costing another 3-4 percentage points. The poor guy in the general public is getting a terrible product from the professionals. I think it's disgusting. It's much better to be part of a system that delivers value to the people who buy the product. But if it makes money, we tend to do it in this country. Charlie Munger country years thinking You're not going to get very far in life based on what you already know. You're going to advance in life by what you're going to learn after you leave here. Charlie Munger knows graduation 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. Charlie Munger horse stupid mistake The Berkshire-style investors tend to be less diversified than other people. The academics have done a terrible disservice to intelligent investors by glorifying the idea of diversification. Because I just think the whole concept is literally almost insane. It emphasizes feeling good about not having your investment results depart very much from average investment results. But why would you get on the bandwagon like that if somebody didn't make you with a whip and a gun? Charlie Munger intelligent gun thinking Of course the self-serving bias is something you want to get out of yourself. Thinking that what's good for you is good for the wider civilization and rationalizing all these ridiculous conclusions based on this subconscious tendency to serve one's self is a terribly inaccurate way to think. Charlie Munger self civilization thinking It's not supposed to be easy. Anyone who finds it easy is stupid. Charlie Munger investing stupid easy If you have competence, you know the edge. It wouldnt be a competence if you didnt know where the boundaries lie. Asking whether youve passed the boundary is a question that almost answers itself. Charlie Munger asking answers lying I try to get rid of people who always confidently answer questions about which they don't have any real knowledge. Charlie Munger real trying people People always underestimate the ability of earth to increase its carrying capacity. Charlie Munger underestimate earth people Whenever you think something or some person is ruining your life, it's you. A victimization mentality is so debilitating. Charlie Munger victimization persons thinking
