We try more to profit from always remembering the obvious than from grasping the esoteric. Charlie Munger More Quotes by Charlie Munger More Quotes From Charlie Munger It is way less certain to be a wonderful business in the future. The threat is alternative mediums of information. Every newspaper is scrambling to parlay their existing advantage into dominance on the Internet. But it is way less sure [that this will occur] than the certainty 20 years ago that the basic business would grow steadily, so there's more downside risk. The perfectly fabulous economics of this business could become grievously impaired. Charlie Munger alternatives risk years I think we have some special talents. That being said, I think it's dangerous to rely on special talents - it's better to own lots of monopolistic businesses with unregulated prices. But that's not the world today. We have made money exercising our talents and will continue to do so. Charlie Munger special exercise thinking So you can get very remarkable investment results if you think more like a winning pari-mutuel player. Just think of it as a heavy odds against game full of craziness with an occasional mispriced something or other. And you're probably not going to be smart enough to find thousands in a lifetime. And when you get a few, you really load up. It's just that simple. Charlie Munger smart simple winning Just as a man working with his tools should know its limitations, a man working with his cognitive apparatus must know its limitations. Charlie Munger tools should men All intelligent investing is value investing - acquiring more that you are paying for. You must value the business in order to value the stock. Charlie Munger investing intelligent order Since those don’t hit financial reports, the opportunities you had but didn’t accept, most people don’t bother thinking about them very much. At least that is a mistake we don’t make. We rub our own noses in our mistakes in blowing opportunities, as we just did. Charlie Munger omission mistake people Part of that, I think, is being able to tune out folly, as distinguished from recognizing wisdom. You've got whole categories of things you just bat away so your brain isn't cluttered with them. That way, you're better able to pick up a few sensible things to do. Charlie Munger simplicity brain thinking There has never been a master plan. Anyone who wanted to do it, we fired because it takes on a life of its own and doesn't cover new reality. We want people taking into account new information. Charlie Munger want reality people We have a high moral responsibility to be rational Charlie Munger rational moral responsibility I’d say that Berkshire Hathaway’s system is adapting to the nature of the investment problem as it really is. We’ve really made the money out of high quality businesses. In some cases, we bought the whole business. And in some cases, we just bought a big block of stock. But when you analyze what happened, the big money’s been made in the high quality businesses. And most of the other people who’ve made a lot of money have done so in high quality businesses. Charlie Munger quality block people Personally, I’ve gotten so that I now use a kind of two-track analysis. First, what are the factors that really govern the interests involved, rationally considered? And second, what are the subconscious influences where the brain at a subconscious level is automatically conclusions in various ways — which, by and large, are useful — but which often malfunction? One approach is rationality… And the other is to evaluate the psychological factors that cause subconscious conclusions — many of which are wrong. Charlie Munger track brain two I regard it as very unfair, but capitalism without failure is like religion without hell. Charlie Munger capitalism hell unfair If the value of a company doesn't just scream out at you, it's too close. Charlie Munger company scream ifs The total amount paid out in dividends is roughly equal to the amount lost in trading and investment advice, so net dividends to shareholders are zero. This is a very peculiar way to run a republic. Charlie Munger zero running advice No CEO examining books today understands what the hell is going on. Charlie Munger hell today book To some extent, stocks are like Rembrandts. They sell based on what they've sold in the past. Bonds are much more rational. No-one thinks a bond's value will soar to the moon. Charlie Munger moon past thinking People like the robber barons assumed that the doctrine of the survival of the fittest authenticated them as deserving power. You know, "I'm the richest. Therefore, I'm the best. God's in his heaven, etc." And that reaction of the robber barons was so irritating to people that it made it unfashionable to think of an economy as an ecosystem. But the truth is that it is a lot like an ecosystem. And you get many of the same results. Charlie Munger ecosystems people thinking Everybody engaged in complex work needs colleagues. Just the discipline of having to put your thoughts in order with somebody else is a very useful thing.” Charlie Munger discipline order needs Practically everybody (1) overweighs the stuff that can be numbered, because it yields to the statistical techniques they’re taught in academia, and (2) doesn’t mix in the hard-to-measure stuff that may be more important. That is a mistake I’ve tried all my life to avoid, and I have no regrets for having done that. Charlie Munger yield regret mistake Suppose you were a real estate investor with a 1/3 interest in the best apartment complex in town, the best mall, and the best office building. Would you feel like a poor, undiversified investor? No! But as soon as you get into stocks, people feel this way. Partly, people need to justify their fees. Charlie Munger office real people
