Charlie Munger Quotes - Page 15

Quotes about:

• 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.

  Charlie Munger

  Business, Power, Civilization

  107 Copy quote

• Beta and modern portfolio theory and the like - none of it makes any sense to me.

  Charlie Munger

  Portfolios, Modern, Beta

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• [With] closet indexing....you're paying a manager a fortune and he has 85% of his assets invested parallel to the indexes. If you have such a system, you're being played for a sucker.

  Charlie Munger

  Being Played, Assets, Fortune

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• There are exceptional loyalties and there are old fashion ideas about how you get loyalties, and after all the auditorium is full of people who have co-owned shares with the managers for many decades, and in many cases they co-invested when everyone was young and obscure. Also when you come back to a place like that you are celebrating old loyalties, and of course the basic idea behind so much of Berkshire is the old fashioned idea that the best way to get loyalty is to deserve loyalty.

  Charlie Munger

  Loyalty, Fashion, Ideas

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• When I run into a paradox I think either I'm a total horse's ass to have gotten to this point, or I'm fruitfully near the edge of my discipline. It adds excitement to life to wonder which it is.

  Charlie Munger

  Running, Horse, Thinking

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• Let me know what your problem is, and I will try to make it more difficult for you.

  Charlie Munger

  Trying, Problem, Difficult

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• I think you'll make more money in the end with good ethics than bad. Even though there are some people who do very well, like Marc Rich-who plainly has never had any decent ethics, or seldom anyway. But in the end, Warren Buffett has done better than Marc Rich-in money-not just in reputation.

  Charlie Munger

  Thinking, People, Done

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• It would be one of the most irritating experiences in the world to do a lot of work to uncover a fraud and then at have it go from X to 3X and at h the crooks happily partying with your money while you're meeting margin calls. Why would you want to go within hailing distance of that?

  Charlie Munger

  Distance, Party, Crooks

  Charlie Munger's advice on investing at the 2006 Berkshire Hathaway Annual Meeting, www.tilsonfunds.com. May 6, 2006.

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• And maybe the cereal makers by and large have learned to be less crazy about fighting for market share-because if you get even one person who's hell-bent on gaining market share.... For example, if I were Kellogg and I decided that I had to have 60% of the market, I think I could take most of the profit out of cereals. I'd ruin Kellogg in the process. But I think I could do it.

  Charlie Munger

  Crazy, Fighting, Thinking

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• Don't do cocaine. Don't race trains. And avoid AIDS situations.

  Charlie Munger

  Race, Cocaine, Aids

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• It is an unfortunate fact that great and foolish excess can come into prices of common stocks in the aggregate. They are valued partly like bonds, based on roughly rational projections of use value in producing future cash. But they are also valued partly like Rembrandt paintings, purchased mostly because their prices have gone up, so far.

  Charlie Munger

  Gone, Excess, Use

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• The interesting thing is the field is so big - it's enormous. One thing a modern civilization needs is energy.

  Charlie Munger

  Civilization, Interesting, Energy

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• No CEO examining books today understands what the hell is going on.

  Charlie Munger

  Book, Today, Hell

  14 Copy quote

• 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.

  Charlie Munger

  Loss, Player, Thinking

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• In business we often find that the winning system goes almost ridiculously far in maximizing and or minimizing one or a few variables - like the discount warehouses of Costco.

  Charlie Munger

  Winning, Investing, Variables

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• 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.

  Charlie Munger

  Smart, Army, Should Have

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• Since those don’t hit financial reports, the opportunities you had but didn’t accept, most people don’t bother thinking about them very much. At least that is a mistake we don’t make. We rub our own noses in our mistakes in blowing opportunities, as we just did.

  Charlie Munger

  Mistake, Omission, People

  BRK Annual Meeting, Morning Session, buffett.cnbc.com. May 1, 2004.

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• After nearly making a terrible mistake not buying See's, we've made this mistake many times. We are apparently slow learners. These opportunity costs don't show up on financial statements, but have cost us many billions.

  Charlie Munger

  Mistake, Opportunity, Cost

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• The general systems of money management [today] require people to pretend to do something they can't do and like something they don't. It's a terrible way to spend your life, but it's very well paid.

  Charlie Munger

  People, Today, Way

  Charlie Munger's investment advice at the 2003 Berkshire Hathaway Annual Meeting, www.tilsonfunds.com. May 3, 2003.

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• There is the sheer amount of Franklin's wisdom. And the talent. Franklin played four instruments. He was the nation's leading scientist and inventor, plus a leading author, statesman, and philanthropist. There has never been anyone like him.

  Charlie Munger

  Four, Talent, Franklin

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• You can hire your advisor and then just apply a windage factor, like I used to do when I was a rifle shooter. I'd just adjust for so many miles an hour wind. Or you can learn the basic elements of your advisor's trade. You don't have to learn very much, by the way, because if you learn just a little then you can make him explain why he's right.

  Charlie Munger

  Wind, Rifles, Elements

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• Everyone caved, adopted loose [accounting] standards, and created exotic derivatives linked to theoretical models. As a result, all kinds of earnings, blessed by accountants, are not really being earned. When you reach for the money, it melts away. It was never there. It [accounting for derivatives] is just disgusting. It is a sewer, and if I'm right, there will be hell to pay in due course. All of you will have to prepare to deal with a blow-up of derivative books.

  Charlie Munger

  Blessed, Book, Blow

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• I think the notion...that liquidity is this - of tradable common stock - is a great contributor to capitalism - I think that is mostly twaddle... The liquidity gives us these crazy booms, which have many problems as well as virtues.

  Charlie Munger

  Crazy, Thinking, Giving

  BRK Annual Meeting, Afternoon Session, buffett.cnbc.com. May 1, 2004.

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• We don't claim to have perfect morals, but at least we have a huge area of things that, while legal, are beneath us. We won't do them. Currently, there's a culture in Americathat says that anything that won't send you to prison is OK.

  Charlie Munger

  Perfect, Culture, Moral

  Charlie Munger's comments on Berkshire Hathaway at the 2004 Berkshire Hathaway Annual Meeting, www.tilsonfunds.com. May 1, 2004.

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• So you can get very remarkable investment results if you think more like a winning pari-mutuel player. Just think of it as a heavy odds against game full of craziness with an occasional mispriced something or other. And you're probably not going to be smart enough to find thousands in a lifetime. And when you get a few, you really load up. It's just that simple.

  Charlie Munger

  Smart, Winning, Simple

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