Mimicking the herd invites regression to the mean. Charlie Munger More Quotes by Charlie Munger More Quotes From Charlie Munger Projections are put together by people who have an interest in a particular outcome, have a subconscious bias, and its apparent precision makes it fallacious. They remind me of Mark Twain's saying, 'A mine is a hole in the ground owned by a liar.' Projections in America are often a lie, although not an intentional one, but the worst kind because the forecaster often believes them himself. Charlie Munger liars believe lying Warren is one of the best learning machines on this earth. The turtles who outrun the hares are learning machines. If you stop learning in this world, the world rushes right by you. Charlie Munger machines turtles world You have to learn to be a follower before you become a leader. Charlie Munger followers leader Some people seem to think there's no trouble just because it hasn't happened yet. If you jump out the window at the 42nd floor and you're still doing fine as you pass the 27th floor, that doesn't mean you don't have a serious problem. I would want to address the problem right now. Charlie Munger mean people thinking Warren spends 70 hours a week thinking about investing . Charlie Munger investing week thinking Darwin paid particular attention to disconfirming evidence. Objectivity maintenance routines are totally required in life if you're going to be a great thinker. Charlie Munger maintenance objectivity attention Go to bed smarter than when you woke up. Charlie Munger smarter investing bed It takes almost no capital to open a new See's candy store. We're drowning in capital of our own that has almost no cost. It would be crazy to franchise stores like some capital-starved pancake house. We like owning our own stores as a matter of quality control. Charlie Munger quality crazy house If you buy something because it's undervalued, then you have to think about selling it when it approaches your calculation of its intrinsic value. That's hard. But if you buy a few great companies, then you can sit on your ass. That's a good thing. Charlie Munger ass selling thinking One metric catches people. We prefer businesses that drown in cash. An example of a different business is construction equipment. You work hard all year and there is your profit sitting in the yard. We avoid businesses like that. We prefer those that can write us a check at the end of the year. Charlie Munger hard-work writing years I think that, every time you saw the word EBITDA, you should substitute the word "bullshit" earnings. Charlie Munger bullshit saws thinking Another thing I think should be avoided is extremely intense ideology because it cabbages up one's mind. You see it a lot with T.V. preachers (many have minds made of cabbage) but it can also happen with political ideology. When you're young it's easy to drift into loyalties and when you announce that you're a loyal member and you start shouting the orthodox ideology out, what you're doing is pounding it in, pounding it in, and you're gradually ruining your mind. So you want to be very, very careful of this ideology. It's a big danger. Charlie Munger political loyalty thinking The game of life is the game of everlasting learning. At least it is if you want to win. Charlie Munger insightful games winning I'm right, and you're smart, and sooner or later you'll see I'm right. Charlie Munger sooner-or-later smart Wesco had a market capitalization of $40 million when we bought it [in the early 1970s]. It's $2 billion now. It's been a long slog to a perfectly respectable outcome - not as good as Berkshire Hathaway or Microsoft, but there's always someone in life who's done better. Charlie Munger microsoft done long This is a good life lesson: getting the right people into your system is the most important thing you can do. Charlie Munger life-lesson good-life people Stock-picking is like gambling: those who win well, seldom bet, but when they do, they bet heavily. Charlie Munger gambling wells winning You must have the confidence to override people with more credentials than you whose cognition is impaired by incentive-caused bias or some similar psychological force that is obviously present. But there are also cases where you have to recognize that you have no wisdom to add - and that your best course is to trust some expert. Charlie Munger experts add people ...People need to ask, "How do I play the hand that has been dealt me?" The world is not going to give you extra return just because you want it. You have to be very shrewd and hard working to get a little extra. It's so much easier to reduce your wants. There are a lot of smart people and a lot of them cheat, so it's not easy to win. Charlie Munger smart hard-work winning In my life there are not that many questions I can't properly deal with using my $40 adding machine and dog-eared compound interest table. Charlie Munger machines tables dog
