Top 549 Quotes & Sayings by Charlie Munger - Page 2

We believe that almost all really good investment records will involve relatively little diversification. The basic idea that it was hard to find good investments and that you wanted to be in good investments, and therefore, you'd just find a few of them that you knew a lot about and concentrate on those seemed to me such an obviously good idea. And indeed, it's proven to be an obviously good idea. Yet 98% of the investing world doesn't follow it. That's been good for us.

In my whole life, I have known no wise people who didn't read all the time - none ... ZERO.

I try to get rid of people who always confidently answer questions about which they don't have any real knowledge.

Three rules for a career: 1) Don’t sell anything you wouldn’t buy yourself; 2) Don’t work for anyone you don’t respect and admire; and 3) Work only with people you enjoy.

It's been my experience in life if you just keep thinking and reading, you don't have to work.

Develop into a lifelong self-learner through voracious reading; cultivate curiosity and strive to become a little wiser every day.

For society, the Internet is wonderful, but for capitalists, it will be a net negative. It will increase efficiency, but lots of things increase efficiency without increasing profits. It is way more likely to make American businesses less profitable than more profitable. This is perfectly obvious, but very little understood.

Expect hogs to eat a lot more in the presence of a lot of hog wash.

If you're going to buy something which compounds for 30 years at 15% per annum and you pay one 35% tax at the very end, the way that works out is that after taxes, you keep 13.3% per annum. In contrast, if you bought the same investment, but had to pay taxes every year of 35% out of the 15% that you earned, then your return would be 15% minus 35% of 15%-or only 9.75% per year compounded. So the difference there is over 3.5%. And what 3.5% does to the numbers over long holding periods like 30 years is truly eye-opening.

If it is wisdom you're after, you're going to spend a lot of time on your ass reading.

We're the tortoise that has outrun the hare because it chose the easy predictions.

The investment game always involves considering both quality and price, and the trick is to get more quality than you pay for in price. It's just that simple.

Some people seem to think there's no trouble just because it hasn't happened yet. If you jump out the window at the 42nd floor and you're still doing fine as you pass the 27th floor, that doesn't mean you don't have a serious problem. I would want to address the problem right now.

Our job is to find a few intelligent things to do, not to keep up with every damn thing in the world.

The iron rule of nature is: you get what you reward for. If you want ants to come, you put sugar on the floor.

The safest way to get what you want is to deserve what you want.

When you borrow a man's car, always return it with a tank of gas.

The best thing a human being can do is to help another human being know more.

When you locate a bargain, you must ask, 'Why me, God? Why am I the only one who could find this bargain?'

Intelligent people make decisions based on opportunity costs.

It’s waiting that helps you as an investor, and a lot of people just can’t stand to wait. If you didn’t get the deferred-gratification gene, you’ve got to work very hard to overcome that.

Remember that reputation and integrity are your most valuable assets - and can be lost in a heartbeat.

It's not a competency if you don't know the edge of it.

All I want to know is where I’m going to die, so I’ll never go there

The game of investing is one of making better predictions about the future than other people. How are you going to do that? One way is to limit your tries to areas of competence. If you try to predict the future of everything, you attempt too much.

You must force yourself to consider opposing arguments. Especially when they challenge your best loved ideas.

Hard work, honesty, if you keep at it, will get you almost anything.

Warren is one of the best learning machines on this earth. The turtles who outrun the hares are learning machines. If you stop learning in this world, the world rushes right by you.

If we've been a little more successful than other people, is because we always realised that the school of life was always open, and if you were not learning more you are falling behind.

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

There is bound to be a regression toward the mean.

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

The idea of excessive diversification is madness. Wide diversification, which necessarily includes investment in mediocre businesses, only guarantees ordinary results.

The secret to happiness is to lower your expectations. ...that is what you compare your experience with. If your expectations and standards are very high and only allow yourself to be happy when things are exquisite, you'll never be happy and grateful. There will always be some flaw. But compare your experience with lower expectations, especially something not as good, and you'll find much in your experience of the world to love, cherish and enjoy, every single moment.

A lot of success in life and business comes from knowing what you want to avoid: early death, a bad marriage, etc.

You need to have a passionate interest in why things are happening. That cast of mind, kept over long periods, gradually improves your ability to focus on reality. If you don't have the cast of mind, you're destined for failure even if you have a high I.Q.

We have a passion for keeping things simple.

It's natural that you'd have more brains going into money management. There are so many huge incomes in money management and investment banking - it's like ants to sugar. There are huge incentives for a man to take up money management as opposed to, say, physics, and it's a lot easier.

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.

It's stupid the way people extrapolate the past -- and not slightly stupid, but massively stupid.

If you want to understand science, you have to understand math. In business, if you're enumerate, you're going to be a klutz. The good thing about business is that you don't have to know any higher math.

Understanding both the power of compound interest and the difficulty of getting it is the heart and soul of understanding a lot of things.

People have always had this craving to have someone tell them the future. Long ago, kings would hire people to read sheep guts. There's always been a market for people who pretend to know the future. Listening to today's forecasters is just as crazy as when the king hired the guy to look at the sheep guts.

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 you don't keep learning, other people will pass you by. Temperament alone won't do it - you need a lot of curiosity for a long, long time.

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.

It’s not greed that drives the world, but envy.

A few major opportunities, clearly recognizable as such, will usually come to one who continuously searches and waits, with a curious mind, loving diagnosis involving multiple variables. And then all that is required is a willingness to bet heavily when the odds are extremely favorable, using resources available as a result of prudence and patience in the past.

It would be easier to screw up American Express than Coke or Gillette, but it's an immensely strong business.

I think that, every time you saw the word EBITDA, you should substitute the word "bullshit" earnings.

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.

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.

Darwin paid particular attention to disconfirming evidence. Objectivity maintenance routines are totally required in life if you're going to be a great thinker.

Using 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.

Any year that you don't destroy one of your best-loved ideas is probably a wasted year

Show me the incentive and I will show you the outcome

I never allow myself to have an opinion on anything that I don't know the other side's argument better than they do.

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.

The idea of caring is that someone is making money faster [than you are] is one of the deadly sins. Envy is a really stupid sin because it’s the only one you could never possibly have any fun at. There’s a lot of pain and no fun. Why would you want to get on that trolley?

If you can buy the best companies, over time the pricing takes care of itself.