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

“The general culture of investment banking has deteriorated over the years. We did a $6 million deal years ago for Diversified Retailing and we were rigorously and intelligently screened. They bankers cared and wanted to protect their clients. The culture now is that anything that can be sold for a profit will be. 'Can you sell it?' is the moral test, and that's not an adequate test.”

YearsWantedCultureDealsMoralMillionsProtectYears AgoTestsSellsInvestmentProfitClientsBankingAdequateBankersInvestment BankingRetailing
Author:Charlie Munger
Create image

“Mutual funds charge 2% per year and then brokers switch people between funds, costing another 3-4 percentage points. The poor guy in the general public is getting a terrible product from the professionals. I think it's disgusting. It's much better to be part of a system that delivers value to the people who buy the product. But if it makes money, we tend to do it in this country.”

PeopleIfsThinkingYearsCountryGuyValuesPoorProductsTerribleMaking MoneyFundMutualDisgustingPercentagesGeneral PublicBrokersMutual Fund
Author:Charlie Munger
Create image

“It is way less certain to be a wonderful business in the future. The threat is alternative mediums of information. Every newspaper is scrambling to parlay their existing advantage into dominance on the Internet. But it is way less sure [that this will occur] than the certainty 20 years ago that the basic business would grow steadily, so there's more downside risk. The perfectly fabulous economics of this business could become grievously impaired.”

WayYearsCertainGrowsWonderfulRiskInformationInternetAdvantageYears AgoEconomicsThreatNewspapersMediumsCertaintyAlternativesFabulousDominance
Author:Charlie Munger
Create image

“Finding a single investment that will return 20% per year for 40 years tends to happen only in dreamland. In the real world, you uncover an opportunity, and then you compare other opportunities with that. And you only invest in the most attractive opportunities. That's your opportunity cost. That's what you learn in freshman economics. The game hasn't changed at all. That's why Modern Portfolio Theory is so asinine.”

WorldYearsRealHappensOpportunityGamesModernChangedTheoryReturnCostFindingsEconomicsInvestmentCompareAttractiveReal WorldPortfoliosFreshmanDreamlandOpportunity Cost
Author:Charlie Munger
Create image

“We regard using [a stock's] 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. Some great businesses have very volatile returns - for example, See's [a candy company owned by Berkshire] usually loses money in two quarters of each year - and some terrible businesses can have steady results.”

YearsTwoLosesLossResultsCompanyRiskExampleReturnTerriblePermanentNutsQuartersSteadyCandyInadequateGreat BusinessVolatility
Author:Charlie Munger
Create image

“If you take sales presentations and brokers of commercial real estate and businesses... I'm 70 years old, I've never seen one I thought was even within hailing distance of objective truth.... 'incentive-caused bias,' causes this terrible abuse. And many of the people who are doing it you would be glad to have married into your family compared to what you're otherwise going to get.”

PeopleIfsYearsRealWould BeCausesTerribleMarriedAbuseDistanceGladObjectivesOur FamilyBiasEstatesIncentivesPresentationBrokersObjective Truth
Author:Charlie Munger
Create image

“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.”

IfsWayYearsLongDoeEndsWould BeEyeDifferencesNumbersPayReturnPeriodsTaxesInvestmentWork OutOpeningContrastCompoundsMinusEye Opening
Author:Charlie Munger
Create image

“Over the long term, it's hard for a stock to earn a much better return that the business which underlies it earns. If the business earns six percent on capital over forty years and you hold it for that forty years, you're not going to make much different than a six percent return - even if you originally buy it at a huge discount. Conversely, if a business earns eighteen percent on capital over twenty or thirty years, even if you pay an expensive looking price, you'll end up with one hell of a result.”

IfsYearsLongDifferentEndsHardTermResultsPayHellHugeReturnSixPercentTwentiesLong TermThirtyExpensiveFortyEighteenThirty YearsDiscounts
Author:Charlie Munger
Create image