Charlie Munger Quotes - Page 5

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.

The number one idea is to view a stock as an ownership of the business and to judge the staying quality of the business in terms of its competitive advantage. Look for more value in terms of discounted future cash-flow than you are paying for. Move only when you have an advantage.

To me, it's obvious that the winner has to bet very selectively. It's been obvious to me since very early in life. I don't know why it's not obvious to very many other people.

You're not going to get very far in life based on what you already know. You're going to advance in life by what you're going to learn after you leave here.

Warren spends 70 hours a week thinking about investing .

The ethos of not fooling yourself is one of the best you could possibly have. It's powerful because it's so rare.

The interesting thing about it to me is the mindset. With all these "helpers" running around, they talk about doing deals. We talk about welcoming partners. The guy doing deals, he wants to do a deal and then unwind it in the near future. It's totally opposite for us. We like to build lasting relationships. I think our system will work better in the long term than flipping deals. I think there are so many of them [helpers] that they'll get in ea h other's way. I don't think they'll make enough money to meet their expectations, by flipping, flipping, flipping.

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."

I got at a very early age, the idea that the safest way to try and get what you want, is to try and deserve what you want. It’s such a simple idea, it’s the golden rule so to speak. You want to deliver to the world what you would buy if you were on the other end.

Just keep your head down and do your best.

I'd rather throw a viper down my shirt front than hire a compensation consultant.

If people tell you what you really don't want to hear what's unpleasant-there's an almost automatic reaction of antipathy. You have to train yourself out of it.

We have found in a long life that one competitor is frequently enough to ruin a business.

People always underestimate the ability of earth to increase its carrying capacity.

Someone will always be getting richer faster than you. This is not a tragedy.

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.

The only way to win is to work, work, work, work, and hope to have a few insights

A business model that relies on trickery is doomed to fail.

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.

We regard using [a stock's] 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. Some great businesses have very volatile returns - for example, See's [a candy company owned by Berkshire] usually loses money in two quarters of each year - and some terrible businesses can have steady results.

Projections are put together by people who have an interest in a particular outcome, have a subconscious bias, and its apparent precision makes it fallacious. They remind me of Mark Twain's saying, 'A mine is a hole in the ground owned by a liar.' Projections in America are often a lie, although not an intentional one, but the worst kind because the forecaster often believes them himself.

Obviously, consideration of costs is key, including opportunity costs. Of course capital isn't free. It's easy to figure out your cost of borrowing, but theorists went bonkers on the cost of equity capital. They say that if you're generating a 100% return on capital, then you shouldn't invest in something that generates an 80% return on capital. It's crazy.

If you get into the mental habit of relating what you're reading to the basic structure of the underlying ideas being demonstrated, you gradually accumulate some wisdom.

Our success has come from the lack of oversight we've provided, and our success will continue to be from a lack of oversight. But if you're going to provide minimal oversight, you have to buy carefully. It's a different model from GE's. GE's works - it's just very different from ours.