Many people consider Charlie Munger to be one of the great minds of the 20th century, and definitely one of the top investing minds of all time. Charlie is the vice chairman and right hand and to Warren Buffett, CEO of Berkshire Hathaway.
Charlie earned a law degree from Harvard Law School. He met Warren Buffett at a dinner part in 1959. In 1978, Munger was appointed the vice-chairman of Berkshire Hathaway where he has worked together with buffet ever since.
Charlie Munger is most famous as being Warren Buffett’s “right hand man” but he has said a lot of fascinating and amazing things. So we put this post together to share his great quotes. If you would like to read more about Munger’s philosophy, his sage wisdom and his advice on business and investing, Poor Charlie’s Almanac is a great place to start.
Charlie Munger Quotes
- “Spend each day trying to be a little wiser than you were when you woke up. Discharge your duties faithfully and well. Systematically you get ahead, but not necessarily in fast spurts. Nevertheless, you build discipline by preparing for fast spurts. Slug it out one inch at a time, day by day. At the end of the day – if you live long enough – most people get what they deserve.”
- “Knowing what you don’t know is more useful than being brilliant.”
- “The desire to get rich fast is pretty dangerous.”
- When people get into investing, especially young people, they tend to want to “get rich quick.” This results in poor analysis and more of a gambling mindset versus the mindset of long term investing.
- “People are trying to be smart—all I am trying to do is not to be idiotic, but it’s harder than most people think.”
- This is like the quote about not trying to get rich fast above. Charlie very much believes in minimizing risk. That is the counter to making bad and impulsive decisions.
- “Life, in part, is like a poker game, wherein you have to learn to quit sometimes when holding a much-loved hand—you must learn to handle mistakes and new facts that change the odds.”
- “My idea of shooting a fish in a barrel is draining the barrel first.”
- “Once we’d gotten over the hurdle of recognizing that a thing could be a bargain based on quantitative measures that would have horrified Graham, we started thinking about better businesses.”
- “It’s waiting that helps you as an investor, and a lot of people just can’t stand to wait.”
- “Acknowledging what you don’t know is the dawning of wisdom.”
- “You’re looking for a mispriced gamble. That’s what investing is. And you have to know enough to know whether the gamble is mispriced. That’s value investing.”
- “You should remember that good ideas are rare—when the odds are greatly in your favor, bet heavily.”
- “Smart people aren’t exempt from professional disasters from overconfidence.”
- “I think that one should recognize reality even when one doesn’t like it; indeed, especially when one doesn’t like it.”
- “Mimicking the herd invites regression to the mean.”
- “The way to get rich is to keep $10 million in your checking account in case a good deal comes along.”
- “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.”
- “Favorable surprises are easy to handle. It’s the unfavorable surprises that cause the trouble.”
- “Move only when you have the advantage—you have to understand the odds and have the discipline to bet only when the odds are in your favor.”
- “If you buy something because it’s undervalued, then you have to think about selling it when it approaches your calculation of its intrinsic value. That’s hard. But, if you can buy a few great companies, then you can sit on your ass. That’s a good thing.”
- “When I came out to California, there was this playboy and he spent all his time drinking heavily and chasing movie stars. His banker called him in and said that he was very nervous about his behavior. He told his banker, ‘Let me tell you something: my municipal bonds don’t drink.’ ”
- “You have to be very patient, you have to wait until something comes along, which, at the price you’re paying, is easy. That’s contrary to human nature, just to sit there all day long doing nothing, waiting. It’s easy for us, we have a lot of other things to do. But for an ordinary person, can you imagine just sitting for five years doing nothing? You don’t feel active, you don’t feel useful, so you do something stupid.”
- “Successful investing requires this crazy combination of gumption and patience, and then being ready to pounce when the opportunity presents itself, because in this world opportunities just don’t last very long.”
- “It is in the nature of stock markets that they go down. So people suffer then. Conservative investing and steady saving without expecting miracles is the way to go. Some people in this room can figure out how to average twice the rate of return. I can’t teach everyone else to do it. It is pretty difficult.”
- “Capitalism without failure is like religion without hell.”
- “We have monetized houses in this country in a way that’s never occurred before. Ask Joe how he bought a new Cadillac—from borrowing on his house. . . . We have financial institutions, including those with big names, extending high-cost credit to the least able people. I find a lot of it revolting. Just because it’s a free market doesn’t mean it’s honorable.”
- “These crazy booms should be watched. Alan Greenspan didn’t think so. He’s a capable man but he’s an idiot. You should not make him the father of all banking. His hero is Ayn Rand. It’s an unlikely place to look for wisdom. A lot of people think that if an ax murderer goes around killing people in a free market it’s all right.”
- “I constantly see people rise in life who are not the smartest, sometimes not even the most diligent, but they are learning machines. They go to bed every night a little wiser than they were when they got up, and boy, does that help, particularly when you have a long run ahead of you.”
- “People really thought that giving a predatory class of people the ability to do whatever they wanted was free-market enterprise. It wasn’t. It was legalized armed robbery. And it was incredibly stupid.”
- “The wealth effect is the extent to which consumer spending is goosed upward due to increases in stock prices. Of course it exists, but to what extent? I made a speech a while back in which I said that the wealth effect is greater than economists believe. I still say this.”
- “You should never, when faced with one unbelievable tragedy, let one tragedy increase into two or three because of a failure of will.”
- “I think democracies are prone to inflation because politicians will naturally spend—they have the power to print money and will use money to get votes.”
- “I remember the $0.05 hamburger and a $0.40-per-hour minimum wage, so I’ve seen a tremendous amount of inflation in my lifetime. Did it ruin the investment climate? I think not.”
- “Koreans came up from nothing in the auto business. They worked 84 hours a week with no overtime for more than a decade. At the same time every Korean child came home from grade school, and worked with a tutor for four full hours in the afternoon and the evening, driven by these Tiger Moms. Are you surprised when you lose to people like that? Only if you’re a total idiot.”
- “If we’re going to prosper, we have to work. We have to have people subject to carrots and sticks. If you take away the stick the whole system won’t work. You can’t vote yourself rich. It’s an idiotic idea.”
- “I have never succeeded very much in anything in which I was not very interested. If you can’t somehow find yourself very interested in something, I don’t think you’ll succeed very much, even if you’re fairly smart.”
- “I do not think you can trust bankers to control themselves. They are like heroin addicts.”
- “The whole world is better when you don’t reduce engineering standards in finance. We skipped a total disaster by a hair’s breadth. . . . I’m a big fan of the people who took us through the crisis. I’m not a big fan of the people who caused the crisis. Some of them deserve to be in the lowest circle of hell.”
- “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.”
- “A great business at a fair price is superior to a fair business at a great price.”
- “There are two kinds of businesses: The first earns 12%, and you can take it out at the end of the year. The second earns 12%, but all the excess cash must be reinvested—there’s never any cash. It reminds me of the guy who looks at all of his equipment and says, ‘There’s all of my profit.’ We hate that kind of business.”
- “Over the very long term, history shows that the chances of any business surviving in a manner agreeable to a company’s owners are slim at best.”
- “Warren is one of the best learning machines on this earth. . . . Warren’s investing skills have markedly increased since he turned 65. Having watched the whole process with Warren, I can report that if he had stopped with what he knew at earlier points, the record would be a pale shadow of what it is.”
- “When we bought See’s Candy, we didn’t know the power of a good brand. Over time, we just discovered that we could raise prices 10% a year and no one cared. Learning that changed Berkshire. It was really important.”
- “The difference between a good business and a bad business is that good businesses throw up one easy decision after another. The bad businesses throw up painful decisions time after time.”
- “If you’re not willing to react with equanimity to a market price decline of 50% two or three times a century you’re not fit to be a common shareholder and you deserve the mediocre result you’re going to get compared to the people who do have the temperament, who can be more philosophical about these market fluctuations.”
- “This is a nice college, but the really great educator is McDonald’s. . . . I think a lot of what goes on there is better than at Harvard.”
- “You must have the confidence to override people with more credentials than you whose cognition is impaired by incentive-caused bias or some similar psychological force that is obviously present. But there are also cases where you have to recognize that you have no wisdom to add—and that your best course is to trust some expert.”
- “The best way to get a good spouse is to deserve a good spouse.”
- “Another thing I think should be avoided is extremely intense ideology because it cabbages up one’s mind.”
- “Three rules for a career: (1) Don’t sell anything you wouldn’t buy yourself; (2) Don’t work for anyone you don’t respect and admire; and (3) Work only with people you enjoy.”
- “I try to get rid of people who always confidently answer questions about which they don’t have any real knowledge.”
- “I like people admitting they were complete stupid horses’ asses. I know I’ll perform better if I rub my nose in my mistakes. This is a wonderful trick to learn.”
- “Any year that passes in which you don’t destroy one of your best loved ideas is a wasted year.”
- “Being rational is a moral imperative. You should never be stupider than you need to be.”
- “There’s no way that you can live an adequate life without many mistakes. In fact, one trick in life is to get so you can handle mistakes. Failure to handle psychological denial is a common way for people to go broke.”
- “Extreme specialization is the way to succeed. Most people are way better off specializing than trying to understand the world.”
- “It’s been my experience in life, if you just keep thinking and reading, you don’t have to work.”
- “Mozart is a good example of a life ruined by nuttiness. His achievement wasn’t diminished—he may well have had the best innate musical talent ever—but from the start, he was pretty miserable. He overspent his income his entire life—that will make you miserable.”
- “One of the great defenses—if you’re worried about inflation—is not to have a lot of silly needs in your life—if you don’t need a lot of material goods.”
- “We all are learning, modifying, or destroying ideas all the time. Rapid destruction of your ideas when the time is right is one of the most valuable qualities you can acquire. You must force yourself to consider arguments on the other side.”
- “I think the attitude of Epictetus is the best. He thought that every missed chance in life was an opportunity to behave well, every missed chance in life was an opportunity to learn something, and that your duty was not to be submerged in self-pity, but to utilize the terrible blow in constructive fashion. That is a very good idea.”
- “Warren is one of the best learning machines on this earth. . . . Warren’s investing skills have markedly increased since he turned 65. Having watched the whole process with Warren, I can report that if he had stopped with what he knew at earlier points, the record would be a pale shadow of what it is.”
- “All human beings work better when they get what psychologists call reinforcement. If you get constant rewards, even if you’re Warren Buffett, you’ll respond. . . . Learn from this and find out how to prosper by reinforcing the people who are close to you.”
- “Most people are trained in one model—economics, for example—and try to solve all problems in one way. You know the saying: ‘To the man with a hammer, the world looks like a nail.’ This is a dumb way of handling problems.
- “Life is always going to hurt some people in some ways and help others. There should be more willingness to take the blows of life as they fall. That’s what manhood is, taking life as it falls. Not whining all the time and trying to fix it by whining.”
- “If you have enough sense to become a mental adult yourself, you can run rings around people smarter than you. Just pick up key ideas from all the disciplines, not just a few, and you’re immensely wiser than they are.”
- “I don’t think it’s terribly constructive to spend your time worrying about things you can’t fix. As long as when you are managing your money you recognize that a terrible thing is going to happen, in the rest of your life you can be a foolish optimist.”
- “I think people who multitask pay a huge price.”
- “It’s bad to have an opinion you’re proud of if you can’t state the arguments for the other side better than your opponents. This is a great mental discipline.”
See our quotes about Investing in Yourself
Charlie Munger Video
This excellent video offers excellent insight into Charlies advice on investing and how to think about your own life. He speaks about how to make investment decisions and life choices that help secure prosperity and longevity.
Let us know what you think in the comments below.
Summary
We have to be honest, Charlie is one of our favorite people we have written about here on ANQuotes. He has a lot of deep, thought provoking quotes.
If you would like to read more about Munger’s philosophy, his sage wisdom and his advice on business and investing, Poor Charlie’s Almanac is a great place to start.
Image Credit: Nick, CC BY 2.0 <https://creativecommons.org/licenses/by/2.0>, via Wikimedia Commons
I’m Alice Judy and AnQuotes is a fun hobby for me. We know that everyone loves a great quote and our mission here is simple – to be the best and most interesting quote site in the world! If you have quotes you would like us to cover, please contact us.
