“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.”
We lost some lions in 2024. Among them, Charlie Munger, the irreverent billionaire who was Warren Buffett’s right-hand man.
Munger lived to be 99 years old, and so I’ve compiled a list of 99 of the smartest and most entertaining quotes attributed to him. If you didn’t follow Munger while he was alive, I think you’ll find some of these poignant and even hilarious now.
- “Being rational is a moral imperative. You should never be stupider than you need to be.”
- “It takes character to sit there with all that cash and do nothing. I didn’t get to where I am by going after mediocre opportunities.”
- “Whenever you think something or some person is ruining your life, it’s you. A victimization mentality is so debilitating.”
- “If you want to understand science, you have to understand math. … The good thing about business is that you don’t have to know any higher math.”
- “In my whole life, I have known no wise people … who didn’t read all the time. … You’d be amazed at how much Warren reads, at how much I read. My children laugh at me. They think I’m a book with a couple of legs sticking out.”
- “We look for a horse with one chance in two of winning and which pays you three to one.”
- “Knowing what you don’t know is more useful than being brilliant.”
- “Recognize reality even when you don’t like it. Especially when you don’t like it.”
- “A business model that relies on trickery is doomed to fail.”
- “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.”
- “Those of us who have been very fortunate have a duty to give back. Whether one gives a lot as one goes along as I do, or a little and then a lot as Warren [plans to], is a matter of personal preference.”
- “You don’t have to be brilliant, only a little bit wiser than the other guys, on average, for a long, long, time.”
- “Remember that reputation and integrity are your most valuable assets, and can be lost in a heartbeat.”
- “There’s no way that you can live an adequate life without making many mistakes.”
- “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.”
- “Forgetting your mistakes is a terrible error if you are trying to improve your cognition.”
- “Is there such thing as a cheerful pessimist? That’s what I am.”
- “I have a black belt in chutzpah. I was born with it.”
- “The best armor of old age is a well-spent life preceding it.”
- “It never ceases to amaze me to see how much territory can be grasped if one merely masters and consistently uses all the obvious and easily learned principles.”
- “Choose clients as you would friends.”
- “It’s not the bad ideas that do you in, but the good ones.”
- “Acknowledging what you don’t know is the dawning of wisdom.”
- “Our job is to find a few intelligent things to do, not to keep up with every damn thing in the world.”
- “If you don’t allow for self-serving bias in the conduct of others, you are, again, a fool.”
- “For some odd reason, I had an early and extreme multidisciplinary cast of mind. I couldn’t stand reaching for a small idea in my own discipline when there was a big idea right over the fence in somebody else’s discipline. So I just grabbed in all directions for the big ideas that would really work.”
- “The big money is not in the buying and selling, but in the waiting.”
- “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 … you will get out of life what you deserve.”
- “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.”
- “I always knew from when I was a little boy that the opportunities that were important that were going to come to me were few and that the trick was to prepare myself for seizing the few that came. This is not the attitude that they have at a big investment council. They think that if they study a million things, they can know a million things.”
- “The first chance you have to avoid a loss from a foolish loan is by refusing to make it. There is no second chance.”
- “I never allow myself to have an opinion on anything that I don’t know the other side’s argument better than they do.”
- “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?'”
- “If it is wisdom you’re after, you’re going to spend a lot of time on your ass reading.”
- “I don’t have too much interest in teaching other people how to get rich.”
- “Once you get into debt, it’s hell to get out. Don’t let credit card debt carry over. You can’t get ahead paying eighteen percent.”
- “Bull markets go to people’s heads. If you’re a duck on a pond, and it’s rising due to a downpour, you start going up in the world. But you think it’s you, not the pond.”
- “Capitalism is a pretty brutal place.”
- “If you have competence, you know the edge. It wouldnt be a competence if you didnt know where the boundaries lie. Asking whether you’ve passed the boundary is a question that almost answers itself.”
- “I regard it as very unfair. But capitalism without failure is like religion without hell.”
- “A rough rule in life is that an organization foolish in one way in dealing with a complex system is all too likely to be foolish in another.”
- “Assume life will be really tough, and then ask if you can handle it. If the answer is yes, you’ve won.”
- “It’s a rare business that doesn’t have a way worse future than it has a past.”
- “We’re emphasizing the knowable by predicting how certain people and companies will swim against the current. We’re not predicting the fluctuation in the current.”
- “You have to learn to be a follower before you become a leader.”
- “Opportunity comes to the prepared mind.”
- “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.”
- “I try to get rid of people who always confidently answer questions about which they don’t have any real knowledge.”
- “Mankind invented a system to cope with the fact that we are so intrinsically lousy at manipulating numbers. It’s called the graph.”
- “I don’t invest in what I don’t understand. And I don’t want to understand Facebook.”
- “Good businesses can survive a little bad management.”
- “Intense interest in any subject is indispensable if you’re really going to excel in it.”
- “Trying to prioritize among things we’re unlikely to do is pretty fruitless.”
- “I believe in the discipline of mastering the best that other people have ever figured out. I don’t believe in just sitting down and trying to dream it all up yourself. Nobody’s that smart.”
- “If the value of a company doesn’t just scream out at you, it’s too close.”
- “You don’t have to have perfect wisdom to get very rich. Just a bit better than average over a long period of time.”
- “When you locate a bargain, you must ask, ‘Why me, God? Why am I the only one who could find this bargain?'”
- “Show me the incentive and I will show you the outcome”
- “It’s a good habit to trumpet your failures and be quiet about your successes.”
- “Just avoid things like racing trains to the crossing, doing cocaine, etc. Develop good mental habits.”
- “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.”
- “There must be some wisdom in the folk saying, ‘It’s the strong swimmers who drown.'”
- “It’s dishonorable to stay stupider than you need to be”
- “If you turn on the television, you’ll find the mothers of the most obvious criminals that man could ever diagnose, and they all think their sons are innocent. That’s simple psychological denial. The reality is too painful to bear, so you just distort it until it’s bearable. We all do that to some extent, and it’s a common psychological misjudgment that causes terrible problems.”
- “Let me know what your problem is, and I will try to make it more difficult for you.”
- “When I run into a paradox I think either I’m a total horse’s ass to have gotten to this point, or I’m fruitfully near the edge of my discipline. It adds excitement to life to wonder which it is.”
- “Strategic plans cause more dumb decisions than anything else in America.”
- “For years I have read the morning paper and harrumphed. There’s a lot to harrumph about now.”
- “In engineering, people have a big margin of safety. But in the financial world, people don’t give a damn about safety. They let it balloon and balloon and balloon. It’s aided by false accounting.”
- “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.”
- “The way to win is to work, work, work, work and hope to have a few insights. 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.”
- “It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.”
- “We tend to buy things–a lot of things–where we don’t know exactly what will happen, but the outcome will be decent.”
- “Failure to handle psychological denial is a common way for people to go broke: You have made an enormous commitment to something. You have poured effort and money in. And the more you put in, the more that the whole consistency principle makes you think, ‘Now it has to work. If I put in just a little more, then it will work.'”
- “People calculate too much and think too little.”
- “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.”
- “Those who will not face improvements because they are changes, will face changes that are not improvements.”
- “It’s stupid the way people extrapolate the past. And not slightly stupid, but massively stupid.”
- “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.”
- “If you don’t keep learning, other people will pass you by. Temperament alone won’t do it. You need a lot of curiosity.”
- “The harder you work, the more confidence you get. But you may be working hard on something that is false.”
- “I did not succeed in life by intelligence. I succeeded because I have a long attention span.”
- “It’s not a competency if you don’t know the edge of it.”
- “The game of life is the game of everlasting learning. At least it is if you want to win.”
- “We have a passion for keeping things simple.”
- “The tax code gives you an enormous advantage if you can find some things you can just sit with.”
- “We have found in a long life that one competitor is frequently enough to ruin a business.”
- “I’d rather throw a viper down my shirt front than hire a compensation consultant.”
- “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.”
- “We have the same problem as everyone else: It’s very hard to predict the future.”
- “Why should it be easy to do something that, if done well, two or three times, will make your family rich for life?”
- “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.”
- “If you took our top 15 decisions out, we’d have a pretty average record. It wasn’t hyperactivity, but a hell of a lot of patience. You stuck to your principles and when opportunities came along, you pounced on them with vigor.”
- “We both insist on a lot of time being available almost every day to just sit and think. That is very uncommon in American business. We read and think.”
- “Go to bed smarter than when you woke up.”
- “A great business at a fair price is superior to a fair business at a great price.”
- “Avoid working directly under somebody you don’t admire and don’t want to be like.”
- “Mimicking the herd invites regression to the mean.”
- “All I want to know is where I’m going to die, so I’ll never go there.”
https://www.inc.com/bill-murphy-jr/99-brilliant-charlie-munger-quotes-that-explain-why-warren-buffett-trusted-him-so-much.html
