Quotessence
Home / Authors / Charlie Munger
Charlie Munger

Charlie Munger Quotes

Business person

Filter quotes by topic

AllIfsPeopleThinkingInvestingWayWantKnowsWorldLongWellsLittlesHardInvestmentIdeasValuesCompanyTryingBigsYearsShould

Famous Charlie Munger Quotes

“Some years ago one oil company bought a fertilizer company, and every other major oil company practically ran out and bought a fertilizer company. And there was no more damned reason for all these oil companies to buy fertilizer companies, but they didn't know exactly what to do, and if Exxon was doing it, it was good enough for Mobil and vice versa.”

IfsKnowsYearsReasonEnoughCompanyMajorsYears AgoVicesOilRanGood EnoughVice VersaOil CompaniesFertilizer
Author:Charlie Munger
Create image

“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.”

PeopleThinkingKnowsMadeHeavenResultsEconomyTruth IsSurvivalInvestingReactionsDoctrineMade ItEtcDeservingEcosystemsIrritatingRobbersSurvival Of The FittestBest GodRobber Baron
Author:Charlie Munger
Create image

“Black-Scholes is a know-nothing system. If you know nothing about value - only price - then Black-Scholes is a pretty good guess at what a 90-day option might be worth. But the minute you get into longer periods of time, it's crazy to get into Black-Scholes. For example, at Costco we issued stock options with strike prices of $30 and $60, and Black-Scholes valued the $60 ones higher. This is insane.”

IfsKnowsMightValuesBlackCrazyMinutesExampleHigherPeriodsStrikesInsaneScholesCostcoStock Options
Author:Charlie Munger
Create image

“And your brain doesn't naturally know how to think the way Zeckhauser knows how to play bridge. "for example," people do not react symmetrically to loss and gain. Well maybe a great bridge player like Zeckhauser does, but that's a trained response. Ordinary people, subconsciously affected by their inborn tendencies.”

PeopleThinkingKnowsWayWellsDoePlayLossBrainKnow HowPlayerExampleOrdinaryGainsResponseTendenciesBridgesAffectedOrdinary People
Author:Charlie Munger
Create image

“Tthe first rule is that you can't really know anything if you just remember isolated facts and try and bang 'em back. If the facts don't hang together on a latticework of theory, you don't have them in a usable form.... You may have noticed students who just try to remember and pound back what is remembered. Well, they fail in school and in life.”

IfsKnowsTryingFirstsWellsMayFactsSchoolTogetherRememberFormFailingStudentsTheoryRememberedEmsPoundsIsolatedBangs
Author:Charlie Munger
Create image

“You'll find many markets where bottlers of Pepsi and Coke both make a lot of money and many others where they destroy most of the profitability of the two franchises. That must get down to the peculiarities of individual adjustment to market capitalism. I think you 'd have to know the people involved to fully understand what was happening.”

PeopleThinkingKnowsTwoIndividualInvolvedHappeningsCapitalismLots Of MoneyAdjustmentCokeProfitabilityPepsi
Author:Charlie Munger
Create image

“Our standard prescription for the know-nothing investor with a long-term time horizon is a no-load index fund. I think that works better than relying on your stock broker. The people who are telling you to do something else are all being paid by commissions or fees. The result is that while index fund investing is becoming more and more popular, by and large it's not the individual investors that are doing it. It's the institutions.”

PeopleThinkingKnowsLongIndividualTermResultsBecomingStandardsPaidInstitutionsInvestingLong TermFundHorizonInvestorsLoadPrescriptionsBecoming MoreFeesBrokersIndex FundsStock Broker
Author:Charlie Munger
Create image

“Over the long term, the eclipse rate of great civilizations being overtaken is 100%. So you know how it's going to end. (Laughter) I'm more optimistic about the staying power of what's good in this country. But just because you have a wonderful spouse doesn't mean you should treat her badly. You have the feeling that some of the old virtues [that made this country great] are lessening. But there's so much good and so much strength left that I would not expect this country to suddenly founder.”

KnowsShouldMeanLongMadeEndsCountryFeelingsLeftTermKnow HowVirtueWonderfulCivilizationLaughterTreatsRateOptimisticLong TermStayingFoundersSpouseEclipseStaying Power
Author:Charlie Munger
Create image

“Harvard and Yale concentrated with venture capitalists that got the best calls and brainpower. Very few firms made most of the money, and they made it in just a few periods. Everyone else returned between mediocre and lousy. When returns happened, envy rippled through institutional money management. The amount invested in venture capital went up 10 times post-1999. That later money was lost very quickly. It will happen again. I don't know anyone who successfully resists this stuff. It becomes a new orthodoxy.”

KnowsMadeHappensLostStuffHappenedReturnAmountPeriodsManagementEnvyMade ItPostsFirmCapitalistVentureMediocreHarvardOrthodoxyYaleMoney ManagementVenture CapitalVenture Capitalists
Author:Charlie Munger
Create image

“You have to know accounting. It's the language of practical business life. It was a very useful thing to deliver to civilization. I've heard it came to civilization through Venice which of course was once the great commercial power in the Mediterranean. However, double entry bookkeeping was a hell of an invention.”

KnowsCoursesLanguageBusinessPowerHellHeardCivilizationPracticalsInventionCommerceVeniceEntryAccountingAccountantsUseful ThingsBusiness LifeBookkeeping
Author:Charlie Munger
Create image

“As I talk about strengths and weaknesses in academic economics, one interesting fact you are entitled to know is that I never took a course in economics. And with this striking lack of credentials, you may wonder why I have the chutzpah to be up here giving this talk. The answer is I have a black belt in chutzpah. I was born with it.”

KnowsGivingMayFactsCoursesBlackBornAnswersInterestingWonderWeaknessEconomicsAcademicEntitledBeltsStrength And WeaknessCredentialsBlack BeltInteresting Fact
Author:Charlie Munger
Create image

“It's not given to human beings to have such talent that they can just know everything about everything all the time. But it is given to human beings who work hard at it - who look and sift the world for a mispriced bet - that they can occasionally find one. And 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.”

KnowsWorldHumansLooksHardBigsOpportunityGivenHuman BeingsSimpleWiseTalentHard WorkOffersOdds
Author:Charlie Munger
Create image

“You must know the big ideas in the big disciplines, and use them routinely - all of them, not just a few. Most people are trained in one model - economics, for example - and try to solve all problems in one way. You know the old saying: to the man with a hammer, the world looks like a nail. This is a dumb way of handling problems.”

PeopleKnowsMenWorldWayTryingLooksIdeasUseProblemBigsExampleHe ManDisciplineModelsEconomicsSolveOne WayDumbNailsHammersOld SayingBig IdeasHandling Problems
Author:Charlie Munger
Create image