Litigation is notoriously time-consuming, inefficient, costly and unpredictable. Charlie Munger More Quotes by Charlie Munger More Quotes From Charlie Munger Beta and modern portfolio theory and the like - none of it makes any sense to me. Charlie Munger betaportfoliosmodern 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. Charlie Munger enron-scandalcivilizationlong Financial institutions make us nervous when they're trying to do well. Charlie Munger nervousfinancialtrying I think it would be a great improvement if there were no D&O insurance . The counter-argument is that no-one with any money would serve on a board. But I think net net you'd be better off. Charlie Munger boardswould-bethinking ...in terms of business mistakes that I've seen over a long lifetime, I would say that trying to minimize taxes too much is one of the great standard causes of really dumb mistakes. I see terrible mistakes from people being overly motivated by tax considerations. Warren and I personally don't drill oil wells. We pay our taxes. And we've done pretty well, so far. Anytime somebody offers you a tax shelter from here on in life, my advice would be don't buy it. Charlie Munger oilmistakelong Bernie Ebbers and Ken Lay were caricatures - they were easy to spot. They were almost psychopaths. But it's much harder to spot problems at companies like Royal Dutch [Shell]. Charlie Munger dutchshellsroyal Well in the history of the See's Candy Company they always say, "I never did it before, and I'm never going to do it again." And we cashier them. It would be evil not to, because terrible behavior spreads. Charlie Munger behaviorwould-beevil A banker who is allowed to borrow money at X and loan it out at X plus Y will just go crazy and do too much of it if the civilization doesn't have rules that prevent it. Charlie Munger crazycivilizationbankers Obviously if you want to get good at something which is competitive, you have to think about it and practice a lot. You have to keep learning because world keeps changing and competitors keep learning. You have to go to bed wiser than you got up. As you try to master what you are trying to do – people who do that almost never fail utterly. Very few have ever failed with that approach. You may rise slowly, but you are sure to rise. Charlie Munger practicepeoplethinking It's dishonourable to stay stupider than you need to be Charlie Munger needs Chris Davis [of the Davisfunds] has a temple of shame. He celebrates the things they did that lost them a lot of money. What is also needed is a temple of shame squared for things you didn't do that would have made you rich. Forgetting your mistakes is a terrible error if you are trying to improve your cognition. Reality doesn't remind you. Why not celebrate stupidities in both categories? Charlie Munger errorsmistakereality A Lesson on Elementary, Worldly Wisdom As It Relates To Investment Management & Business Charlie Munger investmentlessonsmanagement I know just enough about thermodynamics to understand that if it takes too much fossil-fuel energy to create ethanol, that's a very stupid way to solve an energy problem. Charlie Munger fuelenergystupid Accounting is a big subject and there are huge forces in play. The entire momentum of existing thinking and existing custom is in a direction that allows terrible follies to happen, and the terrible follies have terrible consequences. Charlie Munger momentumplaythinking I would argue that a majority of the horrors we face would not have happened if the accounting profession developed and enforced better accounting. Charlie Munger majorityfacesarguing When someone takes their existing business and tries to transform it into something else - they fail. In technology that is often the case. Look at Kodak: it was the dominant imaging company in the world. They did fabulously during the great depression, but then wiped out the shareholders because of technological change. Charlie Munger technologybusinesschangedepression If you're glued together right and honorable, you will succeed. Get in there and get rid of stupidities and avoid bad people. Try teaching that to your grandchildren. The best way is by example. Fix yourself. Charlie Munger yourselfbestyoupeople Economics profession, they've been - they've been confident in various formulas, but economics is not physics. The same formula that works in one decade doesn't work in the next. Economics is a difficult subject. Charlie Munger confidenteconomicsphysicswork I think people who multitask pay a huge price. They think they're being extra productive, and I think when you multitask so much you don't have time to think about anything deeply, you are giving the world an advantage you shouldn't do, and practically everybody is drifting into that mistake. Charlie Munger youmistaketimepeople I'm a great admirer of the Trump change of mind about China and making an ally out of China instead of screaming about their trade. Charlie Munger greatchinachangemind
