Move only when you have an advantage. It's very basic. You have to understand the odds and have the discipline to bet only when the odds are in your favor. Charlie Munger More Quotes by Charlie Munger More Quotes From Charlie Munger The ethos of not fooling yourself is one of the best you could possibly have. It's powerful because it's so rare. Charlie Munger fooling-yourself ethos powerful Rationality is not just something you do so that you can make more money, it is a binding principle. Rationality is a really good idea. You must avoid the nonsense that is conventional in one's own time. It requires developing systems of thought that improve your batting average over time. Charlie Munger principles average ideas The hedge fund known as "Long Term Capital Management" collapsed last fall through overconfidence in its highly leveraged methods, despite I.Q.'s of its principals that must have averaged 160. Smart people aren't exempt from professional disasters from overconfidence. Often, they just run aground in the more difficult voyages they choose, relying on their self-appraisals that they have superior talents and methods. Charlie Munger smart running fall We have to have a special insight, or we'll put it in the 'too tough' basket. All of you have to look for a special area of competency and focus on that. Charlie Munger investing focus special Don't do cocaine. Don't race trains. And avoid AIDS situations. Charlie Munger cocaine aids race There are worse situations than drowning in cash and sitting, sitting, sitting. I remember when I wasn’t awash in cash — and I don’t want to go back. Charlie Munger investing cash sitting To the man with only a hammer, every problem looks like a nail. Charlie Munger hammers nails men Even bright people are going to have limited, really valuable insights in a very competitive world when they're fighting against other very bright, hardworking people. And it makes sense to load up on the very few good insights you have instead of pretending to know everything about everything at all times. Charlie Munger fighting people world I mean people are really crazy about minor decrements down. And then, if you act on them, then you get into reciprocation tendency, because you don't just reciprocate affection, you reciprocate animosity, and the whole thing can escalate. And so huge insanities can come from just subconsciously over-weighing the importance of what you're losing or almost getting and not getting. Charlie Munger crazy mean people Understanding both the power of compound interest and the difficulty of getting it is the heart and soul of understanding a lot of things. Charlie Munger understanding soul heart In fact I've probably never seen such a wide moat. Charlie Munger moats wide facts Great investing requires a lot of delayed gratification. Charlie Munger delayed-gratification gratification investing Almost all good businesses engage in 'pain today, gain tomorrow' activities. Charlie Munger gains pain today For years I have read the morning paper and harrumphed. There's a lot to harrumph about now. Charlie Munger paper morning years Assume life will be really tough, and then ask if you can handle it. If the answer is yes, you've won. Charlie Munger tough assuming answers If only I had the influence with my wife and children that I have in some other quarters! Charlie Munger influence wife children 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 return earth world Capitalism is a pretty brutal place. Charlie Munger brutal capitalism Spend each day trying to be a little wiser than you were when you woke up. Day by day, and at the end of the day-if you live long enough-like most people, you will get out of life what you deserve. Charlie Munger the-end-of-the-day long people If we mix only a moderate minority share of turds with the raisins each year, probably no one will recognize what will ultimately become a very large collection of turds. Charlie Munger minorities share years
