Charlie Munger is a man who vehemently dislikes the spotlight, and hence has spent his life trying to avoid it. He is known as Warren Buffett’s (legendary investor and many times the world’s richest man) right-hand man, and is the man to whom Buffett credits most of his success; this is not a trivial claim, and it highlights one of the many reasons more people ought to know about Charlie—if only for the fact that Buffett has a net-worth of about 84 billion dollars.
Because Warren loves the spotlight—in contrast to his friend—Charlie has naturally let him take it during the several decades they have been in the public eye. Whilst this has served him well, however, it also means less people know about him. This is rather unfortunate, because Charlie is a man with a capacious mind, profound intellect; a treasure-trove of worldly wisdom, which he shares in the form of stories, blunt axioms and esoteric jokes.
He is an American investor, businessman, author, philanthropist, and vice-chairman of Berkshire Hathaway. Charlie and Warren host the wildly popular Berkshire Hathaway annual conference; this is where the company shareholders and a selected number of journalists get together to listen to the two of them—usually for several hours—give updates and their thoughts on the past year, and answer questions about business, life, and sometimes, about Warren’s Coca Cola and peanut brittle diet. The fact that many people attend this event for nothing else but to listen to the wise words of Charlie Munger, says an awful lot. For a deeper insight into Charlies life, I recommend two fantastic books: Getting Behind the Scenes with Charlie Munger, by Janet Lowe; and Poor Charlie’s Almanack. The first book digs deep into his personal life; the latter is almost exclusively about his work and teachings.
What follows is the first part fifteen commentaries/breakdowns/analyses of some Charlie’s deepest words of wisdom—or, as they’ve come to be known, Mungerisms.
Have a disciplined mind
‘The big ideas carry 95% of the freight. … So I went though life constantly practicing this multidisciplinary approach.’
Practice the right approach. This means considering all the information, evidence, arguments whether they’re in support or against your viewpoint or the viewpoints of others; it means learning the subject matter through and through, so that you’re more informed than everyone else; it means destroying your own cherished ideas; it means taking a slower, more thought, diligent approach to you work, to life; it means thinking long term, which means disciplined, because this type of thinking does not come naturally to us.
Deserve your trust
‘Deserve what you want. … Those who live by this ethos are those who WIN in life. … There is huge pleasure in life, to be obtained from getting.’
The safest [and best] way to get what you want in life is to deserve it—not through taking shortcuts, cheating others, cheating systems, bribery, hoping, praying, protesting, playing the victim, licking ass, or being a dick. If you work to get what you want, you will have real and true satisfaction should you get what it is you want; and you will know how you got there, and you will be able to teach others, and you will be an example to others, and, perhaps most importantly, you will have your dignity in tact.
When shit hits the fan, put your head down
‘I always want to just put my head down and adjust… Feeling victimised is a counterproductive way to think as a human being.’
It is going to be hard—the struggles are as hard and real as people say they are. Overcoming them, though, is the only way to move forward; you can shy away and you can stay in denial which will very quickly take you to no place whatsoever, or you can take responsibility for your circumstances, and carry on. You will fail, encounter loss and go through hardships—this is unavoidable if you want the above average life—but moaning and complaining, playing the victim, feeling sorry for yourself, depression, living in the past, these things do nothing to help you, and often harm you. Plus, nobody likes a moaner.
Avoid feeling sorry for yourself
‘Life will have terrible blow, horrible blows, unfair blows—it doesn’t matter. … Said Epictetus, every missed chance in life was an opportunity to behave well… to learn something.’
No self-pity. Self-pity is destabilising, stupefying, crippling, useless, and foolish. Going against the grain means you’re going to fail, which means you’re more vulnerable to bouts of self-pity and despair; hence, you must work tirelessly to avoid it—especially if already have a tendency to feel sorry for yourself.
Live by a philosophy of lifelong learning
‘If you keep learning all the time you have a huge advantage.’
Charlie Munger is the man to whom Warren Buffett often credits much of his success and wealth. Warren is regarded as one of the greatest investors of all time, and currently has a net worth of about 84 billion dollars; he met Charlie, however, a long time before he started making real money. In interview Warren will often say how he doubts he’d have achieved what he has without Munger. Munger, being the self-deprecating soul he is, naturally laughs this off as garbage. One thing they do agree on, however, is that lifelong learning has served as their biggest advantage, and the primary reason for their gigantic success. The two of them are absolute learning machines, always have been, and always will be; Warren is more specialised in his learning, whilst Charlie is more of generalist—hence, the two complement each other very nicely. The lesson? Keep learning. Prioritise it, in fact. The long-term benefits of lifelong learning are unknowable, profound, and incredible.
Know what the hell is going on in the world, underneath the hood
‘Said Cicero, “a man who doesn’t learn about history before he was born goes through his life like a child.” … In addition to learning history, learn about all the big ideas.’
Munger says this quite regularly in interviews, without ever going into what he means precisely by big ideas. What he seems to be suggesting, though, is to get yourself well educated in the field you want to play in; this means learning the fundamental principles (or, first principles), and how things work and why. Applied to life in general, it means learning about the economy, history, education, politics, the sciences, and the arts; it means understanding how the world works at multiple different levels; and it means keeping informed about current world events.
Knowledge is power
‘[on one of the keys to he and Warren’s success] We have to deal with things that we’re capable of understanding. … The reason our ideas, such as this, don’t spread so fast is because they’re too simple! It means the professionals can’t justify their existence.’
Understanding the field you’re playing ball in gives you a huge advantage. This is the philosophy that has earned Warren and Charlie tens of billions of dollars; by learning everything possible they could about the subject matter, they have been, by definition, much more capable than 99% of their competitors since day one—which has enabled them to spot opportunities earlier and avoid costly mistakes, and has made them insanely rich. Applying yourself to one domain and getting very very good at it, can serve you very very well in the long-term.
The point, in other words, is this: you want to rig the game so you can win; but you do so in a way that is ethical, good, useful to society, and can be, very fruitful. How do you do this? In the investing game, this means betting in fields that you understand. In life, it means avoiding shallow understanding of where you expend most of your resources—for example, knowing the rules before you try breaking them, understanding your finances, narrowing down in order to get really proficient in a specific domain, developing useful skills to above-average levels. In a nutshell, take understanding very seriously indeed.