Today we cover Charlie Munger on the Entrepreneur Stories by Work Theater. His journey is wonderful and will make you wiser.
Charlie Munger is a business magnate, investor, and philanthropist known for his partnership with Warren Buffett as vice-chairman of Berkshire Hathaway. Born in Omaha, Nebraska in 1924, Munger attended the University of Michigan for his undergraduate degree and later attended Harvard Law School. After serving in the military during World War II, he worked as a lawyer before becoming a successful investor.
In the early days of his career, Munger struggled to make ends meet. He worked as a lawyer and eventually opened his own law firm, but he was not satisfied with his income. It wasn’t until he started investing that he began to see success. In 1962, Munger and Buffett first met and formed a partnership that would lead to the creation of Berkshire Hathaway.
Munger’s rise to prominence was slow and steady, as he and Buffett focused on long-term investments rather than quick profits. Their strategy of finding undervalued companies with strong management has paid off over the years, with Berkshire Hathaway becoming one of the most successful companies in the world. Munger’s influence on the company can be seen in his emphasis on rational thinking and decision-making, which has become a hallmark of the Berkshire Hathaway culture.
27 Key Learnings from Charlie Munger’s Business Philosophy through quotes:
- “I constantly see people rise in life who are not the smartest, sometimes not even the most diligent, but they are learning machines. They go to bed every night a little wiser than they were when they got up and boy does that help, particularly when you have a long run ahead of you.”
- “Spend each day trying to be a little wiser than you were when you woke up. Discharge your duties faithfully and well. Step by step you get ahead, but not necessarily in fast spurts. But you build discipline by preparing for fast spurts. Slug it out one inch at a time, day by day. At the end of the day – if you live long enough – most people get what they deserve.”
- “You must force yourself to consider opposing arguments. Especially when they challenge your best-loved ideas.”
- “We all are learning, modifying, or destroying ideas all the time. Rapid destruction of your ideas when the time is right is one of the most valuable qualities you can acquire. You must force yourself to consider opposing arguments. Especially when they challenge your best-loved ideas.”
- “Spend less than you make; always be saving something. Put it into a tax-deferred account. Over time, it will begin to amount to something. This is such a no-brainer.”
- “The best thing a human being can do is to help another human being know more.”
- “Spend each day trying to be a little wiser than you were when you woke up. Discharge your duties faithfully and well. Step by step you get ahead, but not necessarily in fast spurts. But you build discipline by preparing for fast spurts. Slug it out one inch at a time, day by day. At the end of the day – if you live long enough – most people get what they deserve.”
- “If you want to make money, work for yourself or for someone with a lot of money.”
- “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’re trying to buy businesses with economics that are sure to be good for decades.”
- “We’re not going to change human nature. We are not going to change basic trends in human behavior. Therefore, we have to concentrate on understanding the mispricings that occur in the market.”
- “The best thing a human being can do is to help another human being know more.”
- “The best thing about investing is that you don’t have to be smart. You don’t have to be anything. You just have to be able to recognize the value of a good business and buy it at a fair price.”
- “We try more to profit from always remembering the obvious than from grasping the esoteric.”
- “We want to buy good companies when they’re not overpriced.”
- “I’m a great believer in solving hard problems by using a checklist. You need to get all the likely and unlikely answers before you; otherwise it’s easy to miss something important.”
- “The most important thing is to avoid stupidity. It’s easier to avoid stupidity than it is to achieve brilliance.”
- “We try to buy businesses that are so wonderful that an idiot can run them. Because sooner or later, one will.”
- “The best thing about investing is that you don’t have to be smart. You don’t have to be anything. You just have to be able to recognize the value of a good business and buy it at a fair price.”
- “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.”
- “We don’t like buying into stinking companies, but we love buying into stinking industries.”
- “If you’re not willing to react with equanimity to a market price decline of 50% two or three times a century, you’re not fit to be a common shareholder, and you deserve the mediocre result you’re going to get compared to the people who do have the temperament, who can be more philosophical about these market fluctuations.”
- “The best way to get a good spouse is to deserve one.”
- “We don’t have a duty to solve the problems of society. Our duty is to make the maximum profit.”
- “In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time — none, zero. You’d be amazed at how much Warren reads–and at how much I read. My children laugh at me. They think I’m a book with a couple of legs sticking out.”
- “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.”
- “We have to deal in things that are knowable and important. Otherwise, we’ll be killed by things we didn’t expect.”
Charlie Munger’s business philosophy emphasizes the importance of rational thinking, continuous learning, and discipline in investing. His partnership with Warren Buffett has been a key factor in the success of Berkshire Hathaway.
Some of the key takeaways from his philosophy include the importance of avoiding stupidity, recognizing the value of good businesses, and being prepared for market fluctuations. Munger also emphasizes the value of reading and continuous learning, as well as the need to focus on things that are knowable and important in order to succeed in investing.
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