Some classic Charlie Munger quotes ........

Some classic Charlie Munger quotes ........

Do the best you can do. Never tell a lie. If you say you’re going to do it, get it done. Nobody cares about an excuse. Leave for the meeting early. Don’t be late, but if you are late, don’t bother giving people excuses. Just apologize. They’re due the apology, but they’re not interested in the excuse.

The difference between a good business and a bad business is that good businesses throw up one easy decision after another. The bad businesses throw up painful decisions time after time.

Just out of our respective graduate schools, my friend Warren Buffett and I entered the business world to find huge, predictable patterns of extreme irrationality. These irrationalities were obviously important to what we wanted to do, but our professors never mentioned them. Understanding the problem of irrationalities was not easy. I came to study the psychology of human misjudgement almost against my will. I rejected it until I realized that my attitude was costing me a lot of money and reduced my ability to help everything I loved.

A partner ideally is capable of working alone, you can be a dominant partner, subordinate partner, or an always collaborative equal partner. I’ve done all three. People couldn’t believe that I suddenly made myself a subordinate partner to Warren. But there are people that it’s okay to be subordinate partner to. I didn’t have the kind of ego that prevented it. There always are people who will be better at something than you are. You have to learn to be a follower before you become a leader. People should learn to play all roles. You can divide up in different ways with different 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. There must be some wisdom in the folk saying, ‘It’s the strong swimmers who drown.’

There are huge advantages for an individual to get into a position where you make a few great investments and just sit back, you’re paying less to brokers, you’re listening to less nonsense.

People underrate the importance of a few simple big ideas – the chief lesson is that a few big ideas really work.

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’re going to fail through lack of specialization.

You don’t have to know everything. A few really big ideas carry most of the freight.

Like any good algebraist, the pilot is made to think sometimes in a forward fashion and sometimes in reverse; and so he learns when to concentrate mostly on what he wants to happen and also when to concentrate mostly on avoiding what he does not want to happen.

How do you learn to be a great investor? First of all, you have to understand your own nature. Each person has to play the game given his own marginal utility considerations and in a way that takes into account his own psychology. If losses are going to make you miserable and some losses are inevitable – you might be wise to utilize a very conservative pattern of investment and savings all your life. So you have to adapt your strategy to your own nature and your own talents. I don’t think there’s a one size fits all investment strategy that I can give you.

I don’t think you can get to be a really good investor over a broad range without doing a massive amount of reading. I don’t think any one book will do it for you.

Frequently, you’ll look at a business having fabulous results. And the question is, ‘How long can this continue?’. Well, there’s only one way I know to answer that. And that’s to think about why the results are occurring now – and then to figure out the forces that could cause those results to stop occurring.

In the U.S., a person or institution with almost all wealth invested, long-term, in just three fine domestic corporations, is securely rich. Long-term results will be superior by reason of his lower costs, required emphasis on long-term effects, and concentration in his most preferred choices.

Investors can have 90% of their wealth in a single company, if it is the right company.