The SEC does way more good than harm - the last thing I would do is get rid of the SEC...if accounting were thoroughly fixed, a lot of other sins would go away. We're paying a huge price for deterioration of accounting. Charlie Munger More Quotes by Charlie Munger More Quotes From Charlie Munger The tradition of always looking for the answer in the most fundamental way available - that is a great tradition, and it saves a lot of time in this world. Charlie Munger fundamentals answers world A lot of people think if you just had more process and more compliance -- checks and doublechecks and so forth -- you could create a better result in the world. Well, Berkshire has had practically no process. We had hardly any internal auditing until they forced it on us. We just try to operate in a seamless web of deserved trust and be careful whom we trust. Charlie Munger trying people thinking The ethical rule is from Samuel Johnson who believed that maintenance of easily removable ignorance by a responsible office holder was treacherous malfeasance in meeting moral obligation. The prudential rule is that underlying the old Warner & Swasey advertisement for machine tools: "The man who needs a new machine tool, and hasn't bought it, is already paying for it". The Warner & Swasey rule also applies, I believe, to thinking tools. If you don't have the right thinking tools, you, and the people you seek to help, are already suffering from your easily removable ignorance. Charlie Munger ignorance men believe You're looking for a mispriced gamble. That's what investing is. And you have to know enough to know whether the gamble is mispriced. That's value investing. Charlie Munger gamble investing enough An idea or a fact is not worth more merely because it's more available to you. Charlie Munger available facts ideas It's very useful to have a good grasp of all the big ideas in hard and soft science. A, it gives perspective. B, it gives a way for you to organize and file away experience in your head, so to speak. Charlie Munger perspective giving ideas All the equity investors, in total, will surely bear a performance disadvantage per annum equal to the total croupiers' costs they have jointly elected to bear. This is an inescapable fact of life. And it is also inescapable that exactly half of the investors will get a result below the median result after the croupiers' take, which median result may well be somewhere between unexciting and lousy. Charlie Munger cost half may I have a name for people who went to the extreme efficient market theory-which is "bonkers". It was an intellectually consistent theory that enabled them to do pretty mathematics. So I understand its seductiveness to people with large mathematical gifts. It just had a difficulty in that the fundamental assumption did not tie properly to reality. Charlie Munger ties names reality We've got great flexibility and a certain discipline in terms of not doing some foolish thing just to be active - discipline in avoiding just doing any damn thing just because you can't stand inactivity. Charlie Munger discipline what-matters foolish Most people early achieve and later intensify a tendency to process new and disconfirming information so that any original conclusion remains intact. They become people of whom Philip Wylie observed: "You couldn't 't squeeze a dime between what they already know and what they will never learn." Charlie Munger dimes information people When you locate a bargain, you must ask, 'Why me, God? Why am I the only one who could find this bargain?' Charlie Munger why-me bargains asks I don't think vengeance is much good. Charlie Munger vengeance thinking We believe there should be a huge area between everything you should do and everything you can do without getting into legal trouble. I don't think you should come anywhere near that line. We don't deserve much credit for this. It helps us make more money. I'd like to believe that we'd behave well even if it didn't work. But more often, we've made extra money from doing the right thing. Ben Franklin said I'm not moral because of it's the right thing to do - but because it's the best policy. Charlie Munger credit believe thinking An investment decision in the common stock of a company frequently involves a whole lot of factors interacting ... the one thing that causes the most trouble is when you combine a bunch of these together, you get this lollapalooza effect. Charlie Munger causes decision together Acquire worldly wisdom and adjust your behavior accordingly. If your new behavior gives you a little temporary unpopularity with your peer group then to hell with them. Charlie Munger groups littles giving Well, the questioner came from Singapore, which has perhaps the best economic record in the history of developing an economy. And therefore he referred to 15 percent per annum as modest. It's not modest, it's arrogant. Charlie Munger arrogant economic records Quoting Demosthenes, 'For what each man wishes, that he also believes to be true.' I would rather make money playing a piano in a whorehouse than arguing that no cost is incurred when employees are paid in stock options instead of cash. I am not kidding. Charlie Munger piano men believe We don't train executives, we find them. If a mountain stands up like Everest, you don't have to be a genius to figure out that it's a high mountain. Charlie Munger mountain figures genius Using volatility as a measure of risk is nuts. Risk to us is 1) the risk of permanent loss of capital, or 2) the risk of inadequate return. Charlie Munger risk nuts loss Sears had layers and layers of people it didn't need. It was very bureaucratic. It was slow to think. And there was an established way of thinking. If you poked your head up with a new thought, the system kind of turned against you. It was everything in the way of a dysfunctional big bureaucracy that you would expect. Charlie Munger people needs thinking
