Quotessence
Home / Authors / Charlie Munger
Charlie Munger

Charlie Munger Quotes

Business person

Filter quotes by topic

AllIfsPeopleThinkingInvestingWayWantKnowsWorldLongWellsLittlesHardInvestmentIdeasValuesCompanyTryingBigsYearsShould

Famous Charlie Munger Quotes

“I’d say that Berkshire Hathaway’s system is adapting to the nature of the investment problem as it really is. We’ve really made the money out of high quality businesses. In some cases, we bought the whole business. And in some cases, we just bought a big block of stock. But when you analyze what happened, the big money’s been made in the high quality businesses. And most of the other people who’ve made a lot of money have done so in high quality businesses.”

PeopleMadeDoneWholeProblemBigsQualityCasesHappenedInvestmentBlockLots Of MoneyHigh QualityAdapting
Author:Charlie Munger
Create image

“Obviously if you want to get good at something which is competitive, you have to think about it and practice a lot. You have to keep learning because world keeps changing and competitors keep learning. You have to go to bed wiser than you got up. As you try to master what you are trying to do – people who do that almost never fail utterly. Very few have ever failed with that approach. You may rise slowly, but you are sure to rise.”

PeopleIfsThinkingWorldWantTryingMayPracticeFailingMastersBedApproachWiserCompetitorsKeep Learning
Author:Charlie Munger
Create image

“Projections are put together by people who have an interest in a particular outcome, have a subconscious bias, and its apparent precision makes it fallacious. They remind me of Mark Twain's saying, 'A mine is a hole in the ground owned by a liar.' Projections in America are often a lie, although not an intentional one, but the worst kind because the forecaster often believes them himself.”

PeopleBelieveKindTogetherAmericaLyingInterestWorstMinesParticularMarkInvestingHolesOutcomesLiarsBiasSubconsciousProjectionPrecision
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

“A lot of people with high IQs are terrible investors because they've got terrible temperaments. And that is why we say that having a certain kind of temperament is more important than brains. You need to keep raw irrational emotion under control. You need patience and discipline and an ability to take losses and adversity without going crazy. You need an ability to not be driven crazy by extreme success”

PeopleNeedsKindImportantCertainLossAbilityEmotionBrainCrazyDisciplineTerribleAdversityExtremesDrivenInvestorsIrrationalTemperamentGoing Crazy
Author:Charlie Munger
Create image

“There's a lot wrong [with American universities]. I'd remove 3/4 of the faculty - everything but the hard sciences. But nobody's going to do that, so we'll have to live with the defects. It's amazing how wrongheaded [the teaching is]. There is fatal disconnectedness. You have these squirrelly people in each department who don't see the big picture.”

PeopleHardBigsTeachingUniversityDepartmentRemoveFacultyDefectsBig PictureAmerican UniversitiesDisconnectedness
Author:Charlie Munger
Create image

“I talked to one accountant, a very nice fellow who I would have been glad to have his family marry into mine. He said, "What these other accounting firms have done is very unethical. The [tax avoidance scheme] works best if it's not found out [by the IRS], so we only give it to our best clients, not the rest, so it's unlikely to be discovered. So my firm is better than the others." [Laughter] I'm not kidding. And he was a perfectly nice man. People just follow the crowd...Their mind just drifts off in a ghastly way.”

PeopleIfsMenWayGivingMindHas BeensSaidDoneFoundNiceMinesTaxesLaughterFellowsCrowdsGladFirmSchemesClientsUnlikelyAvoidanceVery NiceAccountingAccountantsIrsGhastlyUnethicalNice Man
Author:Charlie Munger
Create image

“I have what I call an iron prescription that helps me keep sane when I naturally drift toward preferring one ideology over another and that is: I say that I'm not entitled to have an opinion on this subject unless I can state the arguments against my position better than the people who support it. I think only when I've reached that state am I qualified to speak. This business of not drifting into extreme ideology is a very, very important thing in life”

PeopleThinkingI CanImportantStatesHelpingSpeakOpinionSupportSubjectsPositionArgumentImportant ThingsExtremesIdeologyHelp MeIronSaneThings In LifeEntitledQualifiedPrescriptionsDrifting
Author:Charlie Munger
Create image

“Of course you want to drive that out of yourself because you want to be wise, not foolish. You also have to allow for the self-serving bias of everybody else because most people are not going to remove it all that successfully, the human condition being what it is. If you don't allow for self-serving bias in your conduct, again you're a fool.”

PeopleIfsWantHumansSelfCoursesWiseConditionsFoolFoolishRemoveServingHuman ConditionBiasBeing WiseSelf Serving
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

“The Berkshire-style investors tend to be less diversified than other people. The academics have done a terrible disservice to intelligent investors by glorifying the idea of diversification. Because I just think the whole concept is literally almost insane. It emphasizes feeling good about not having your investment results depart very much from average investment results. But why would you get on the bandwagon like that if somebody didn't make you with a whip and a gun?”

PeopleIfsThinkingIdeasDoneWholeFeelingsResultsStyleTerribleGunConceptsIntelligentInvestmentAverageFeel GoodInsaneInvestorsWhipsDisserviceDiversificationBandwagon
Author:Charlie Munger
Create image

“I get flack for saying [when I visit a college and give a speech], "This is a nice college, but the really great educator is McDonald's." They hate me for saying this and think I'm a slimy creature. But McDonald's hires people with bad work habits, trains them, and teaches them to come to work on time and have good work habits. I think a lot of what goes on there is better than at Harvard.”

PeopleThinkingGivingHateTeachNiceCollegeGoes OnHabitCreaturesSpeechTrainGood WorkReally GreatHarvardEducatorHate MeMcdonaldsWork HabitsThey Hate Me
Author:Charlie Munger
Create image

“I have a name for people who went to the extreme efficient market theory-which is "bonkers". It was an intellectually consistent theory that enabled them to do pretty mathematics. So I understand its seductiveness to people with large mathematical gifts. It just had a difficulty in that the fundamental assumption did not tie properly to reality.”

PeopleRealityNamesTheoryDifficultyMathematicsFundamentalsExtremesMathematicalTiesAssumptionConsistentEfficientEfficient Markets
Author:Charlie Munger
Create image

“...People need to ask, "How do I play the hand that has been dealt me?" The world is not going to give you extra return just because you want it. You have to be very shrewd and hard working to get a little extra. It's so much easier to reduce your wants. There are a lot of smart people and a lot of them cheat, so it's not easy to win.”

PeopleWorldWantNeedsGivingLittlesHas BeensHardPlayHandsAsksWinningEasyHard WorkReturnEasierSmartExtrasCheatSmart People
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

“I think that if you have a single payer system and an opt-out for people who want to pay more [for better service, etc.], I think it would be better - and I think we'll eventually get there. It wouldn't be better at the top - [our current system] is the best in the world at the top. But the waste in the present system is awesome and we do get some very perverse incentives.”

PeopleIfsThinkingWorldWantWould BePayWasteCurrentsEtcIncentives
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

“The hedge fund known as "Long Term Capital Management" collapsed last fall through overconfidence in its highly leveraged methods, despite I.Q.'s of its principals that must have averaged 160. Smart people aren't exempt from professional disasters from overconfidence. Often, they just run aground in the more difficult voyages they choose, relying on their self-appraisals that they have superior talents and methods.”

PeopleLongSelfRunningLastsFallDifficultTermKnownTalentSmartManagementMethodDisasterSuperiorsDespiteLong TermFundPrincipalVoyagesSmart PeopleAppraisalHedge FundOverconfidence
Author:Charlie Munger
Create image

“When we were young, there weren't very many smart people in the investment world. You should have seen the people in the bank trust departments. Now, there are armies of smart people at private investment funds, etc . If there were a crisis now, there would be a lot more people with a lot of money ready to take advantage.”

PeopleIfsWorldShouldWould BeYoungReadySmartAdvantageShould HaveArmyCrisisInvestmentDepartmentEtcFundLots Of MoneySmart People
Author:Charlie Munger
Create image

“"[Lawyers who file class-action securities suits] is not a group you would want to marry into your family. "That said, more than half the time the people being sued by the Lerach firm are guilty of outrageous conduct. The problem is, they don't mind (suing) the other half. They are an equal opportunity litigator."”

PeopleWantMindSaidProblemActionOpportunityHalfClassGroupsSecurityEqualLawyerGuiltySuitsFirmOur FamilyFilesOutrageousOther HalfEqual OpportunitySuingLitigators
Author:Charlie Munger
Create image