Charlie Munger Quotes - Page 9

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• One of the first big bubbles, of course, was the huge and horrible South Sea Bubble in England. And the aftermath was interesting. Many of you probably don't remember what happened after the South Sea Bubble, which caused an enormous financial contraction, and a lot of pain. They banned publicly traded stock in England for decades.

  Charlie Munger

  Pain, Sea, Interesting

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• While no real money came down, my family gave me a good education and a marvelous example of how people should behave, and in the end that was more valuable than money. Being surrounded by the right values from the beginning is an immense treasure. Warrenhad that. It even has a financial advantage.

  Charlie Munger

  Real, People, Example

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• If you turn on the television, you'll find the mothers of the most obvious criminals that man could ever diagnose, and they all think their sons are innocent. That's simple psychological denial. The reality is too painful to bear, so you just distort it until it's bearable. We all do that to some extent, and it's a common psychological misjudgment that causes terrible problems.

  Charlie Munger

  Mother, Son, Simple

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• There are a lot of things in life way more important than money. All that said, some people do get confused. I play golf with a man who says, " What good is health? You can't buy money with it."

  Charlie Munger

  Confused, Golf, Men

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• To us, investing is the equivalent of going out and betting against the pari-mutuel system. We look for a horse with one chance in two of winning, and that pays three to one. In other words, we're looking for a mispriced gamble. That's what investing is, and you have to know enough to know whether the gamble is mispriced.

  Charlie Munger

  Horse, Winning, Two

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• A lot of share-buying, not bargain-seeking, is designed to prop stock prices up. Thirty to 40 years ago, it was very profitable to look at companies that were aggressively buying their own shares. They were motivated simply to buy below what it was worth.

  Charlie Munger

  Years, Looks, Buying

  "Berkshire Behind the Scenes: Part 3". Interview with Rick Casterline, www.fool.com. May 30, 2006.

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• 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.

  Charlie Munger

  Thinking, Ecosystems, People

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• We're emphasizing the knowable by predicting how certain people and companies will swim against the current. We're not predicting the fluctuation in the current.

  Charlie Munger

  People, Swim, Insightful

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• Proper accounting is like engineering. You need a margin of safety. Thank God we don't design bridges and airplanes the way we do accounting.

  Charlie Munger

  Airplane, Engineering, Bridges

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• What's fascinating . . .is that you could now have a business that might have been selling for $10 billion where the business itself could probably not have borrowed even $100 million. But the owners of that business, because its public, could borrow many billions of dollars on their little pieces of paper- because they had these market valuations. But as a private business, the company itself couldn't borrow even 1/20th of what the individuals could borrow.

  Charlie Munger

  Pieces, Paper, Littles

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• What good is envy? It’s the one sin you can’t have any fun at.

  Charlie Munger

  Fun, Envy, Sin

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• A rough rule in life is that an organization foolish in one way in dealing with a complex system is all too likely to be foolish in another.

  Charlie Munger

  Organization, Way, Life Is

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• I don't think vengeance is much good.

  Charlie Munger

  Thinking, Vengeance

  Charlie Munger's speech on the psychology of human misjudgment at Harvard University in Cambridge, Massachusetts, June 1995.

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• We look for a horse with one chance in two of winning and which pays you three to one.

  Charlie Munger

  Horse, Winning, Two

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• The liabilities are always 100 percent good. It's the assets you have to worry about.

  Charlie Munger

  Worry, Assets, Liability

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• We both (Charlie Munger and Warren Buffett) insist on a lot of time being available almost every day to just sit and think. That is very uncommon in American business. We read and think.

  Charlie Munger

  Thinking, Warren Buffet, Uncommon

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• If you took our top fifteen decisions out, we'd have a pretty average record. It wasn't hyperactivity, but a hell of a lot of patience. You stuck to your principles and when opportunities came along, you pounced on them with vigor.

  Charlie Munger

  Money, Opportunity, Average

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• In engineering, people have a big margin of safety. But in the financial world, people don't give a damn about safety. They let it balloon and balloon and balloon. It's aided by false accounting.

  Charlie Munger

  Engineering, People, Safety

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• How could economics not be behavioral? If it isn't behavioral, what the hell is it?

  Charlie Munger

  Investing, Hell, Economics

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• The world of derivatives is full of holes that very few people are really aware of. It's like hydrogen and oxygen sitting on the corner waiting for a little flame.

  Charlie Munger

  Oxygen, Flames, People

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• We have a passion for keeping things simple.

  Charlie Munger

  Passion, Simple, Simplicity

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• Choose clients as you would friends.

  Charlie Munger

  Clients

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• 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.

  Charlie Munger

  Real, Opportunity, Years

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• You don't have to be brilliant, only a little bit wiser than the other guys, on average, for a long, long, time.

  Charlie Munger

  Average, Long, Guy

  "When I Met the Legends of Investing - Part 1". Interview with Vishal Khandelwal, www.safalniveshak.com. October 31, 2012.

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• Personally, I’ve gotten so that I now use a kind of two-track analysis. First, what are the factors that really govern the interests involved, rationally considered? And second, what are the subconscious influences where the brain at a subconscious level is automatically conclusions in various ways — which, by and large, are useful — but which often malfunction? One approach is rationality… And the other is to evaluate the psychological factors that cause subconscious conclusions — many of which are wrong.

  Charlie Munger

  Two, Track, Brain

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