There are always people who will be better at some thing than you are. Charlie Munger More Quotes by Charlie Munger More Quotes From Charlie Munger The tax code gives you an enormous advantage if you can find some things you can just sit with. Charlie Munger enormous advantage giving I think democracies are prone to inflation because politicians will naturally spend [excessively] - they have the power to print money and will use money to get votes. If you look at inflation under the Roman Empire, with absolute rulers, they had much greater inflation, so we don't set the record. It happens over the long-term under any form of government. Charlie Munger government long thinking Mimicking the herd invites regression to the mean. Charlie Munger regression mimicking mean Clever derivatives broke dozens of companies. It killed them. Bankrupt. We don't need these kinds of innovation in finance. It's OK to be boring in finance. What we want is innovation in widgets. Charlie Munger innovation clever needs A foreign correspondent, after talking to me for a while, once said: "You don't seem smart enough to be so good at what you're doing. Do you have an explanation?" Charlie Munger smart enough talking ... some important factor doesn't lose its "share of force" just because some "expert" can better measure other types of force. Charlie Munger important experts share If you have the opportunities of Berkshire, an investment in gold is dumb. Charlie Munger dumb gold opportunity It's not given to human beings to have such talent that they can just know everything about everything all the time. But it is given to human beings who work hard at it - who look and sift the world for a mispriced bet - that they can occasionally find one. And the wise ones bet heavily when the world offers them that opportunity. They bet big when they have the odds. And the rest of the time they don't. It's just that simple. Charlie Munger hard-work wise opportunity Common stock investors can make money by predicting the outcomes of practice evolution. You can't derive this by fundamental analysis - you must think biologically. Charlie Munger analysis practice thinking It's human nature to extrapolate the recent past into the future, but it's terrible that managements go along with this. Charlie Munger human-nature management past A lot of our respected financial institutions are just casinos in drag. Charlie Munger casinos institutions financial Black-Scholes is a know-nothing system. If you know nothing about value - only price - then Black-Scholes is a pretty good guess at what a 90-day option might be worth. But the minute you get into longer periods of time, it's crazy to get into Black-Scholes. For example, at Costco we issued stock options with strike prices of $30 and $60, and Black-Scholes valued the $60 ones higher. This is insane. Charlie Munger black insane crazy If you always tell people why, they'll understand it better, they'll consider it more important, and they'll be more likely to comply. Charlie Munger important ifs people It's a rare business that doesn't have a way worse future than it has a past. Charlie Munger way past Don't confuse correlation and causation. Almost all great records eventually dwindle. Charlie Munger causation correlation records In investment management today, everybody wants not only to win, but to have a yearly outcome path that never diverges very much from a standard path except on the upside. Well, that is a very artificial, crazy construct. That's the equivalent in investment management to the custom of binding the feet of Chinese women Charlie Munger crazy feet winning It's my guess that something like 5% of GDP goes to money management and itsattendant friction. I define it broadly - annuities, incentive pay, all trading, etc. Nobody else has used figures that high, but that's my guess. Worst of all, the people doing this are among the best and the brightest. Hundreds and thousands of engineers, etc. are going into hedge funds and investment banking. That is not an intelligent allocation of the brainpower of the civilization. Charlie Munger gdp intelligent civilization Over the very long term, history shows that the chances of any business surviving in a manner agreeable to a company's owners are slim at best. Charlie Munger slim chance long Anytime anybody offers you anything with a big commission and a 200-page prospectus, don't buy it. Occasionally, you'll be wrong if you adopt "Munger's Rule." However, over a lifetime, you'll be a long way ahead - and you will miss a lot of unhappy experiences. Charlie Munger unhappy missing long Economics is in many respects the queen of the soft sciences. It's expected to be better than the rest. It's my view that economics is better at the multi-disciplinary stuff than the rest of the soft science. And it's also my view that it's still lousy. Charlie Munger queens views stuff
