“So you have to figure out what your own aptitudes are. If you play games where other people have the aptitudes and you don’t, you’re going to lose. And that’s as close to certain as any prediction you can make. You have to figure out where you’ve got an edge. And you’ve got to play within your own circle of competence.”
— Charlie Munger Primary source“Invert, always invert”
— Charlie Munger Primary source“In my whole life, I have known no wise people (over a broad subject matter) who didn’t read all the time—none, zero. You’d be amazed how much Warren reads—and at how much I read. My children laugh at me. They think I’m a book with a couple of legs sticking out.”
— Charlie Munger Primary source“If anything, I now believe even more strongly that reliability is essential for progress in life and while quantum mechanics is unlearnable for a vast majority, reliability can be learned to great advantage by almost anyone.”
— Charlie Munger Primary source“The great defect of scale, of course, which makes the game interesting, so that the big people don’t always win—is that as you get big, you get the bureaucracy.”
— Charlie Munger Primary source“There’s a simple rule: fish where the fish are.”
— Charlie Munger Primary source“Addiction can happen to any of us through a subtle process where the bonds of degradation are too light to be felt until when they are too strong to be broken.”
— Charlie Munger Primary source“I don’t know much about cryptocurrencies except to avoid them.”
— Charlie Munger Primary source“A problem thoroughly understood is half solved.”
— Charlie Munger Primary source“You’ll be happier if you reduce your expectations than if you try and satisfy them.”
— Charlie Munger Primary source“Rationality is something you get slowly and it has a variable result. But it’s better than not having it.”
— Charlie Munger Primary source“Being able to recognize that you are wrong is a godsend.”
— Charlie Munger Primary source“You’re much more likely to do well if you start out to do something feasible instead of something that isn’t feasible. Isn’t that perfectly obvious?”
— Charlie Munger Primary source“Never underestimate the man who overestimates himself.”
— Charlie Munger Primary source“As usual in human affairs, what determines the behavior are incentives for the decision-maker, and getting the incentives right is a very, very important lesson.”
— Charlie Munger Primary source“Capitalism works best when there is trust in the system.”
— Charlie Munger Primary source“We actually need some tough incentives in civilization to make it work.”
— Charlie Munger Primary source“Spend each day trying to be a little wiser than you were when you woke up. Discharge your duties faithfully and well. Step by step you get ahead, but not necessarily in fast spurts. But you build discipline by preparing for fast spurts. Slug it out one inch at a time, day by day, and at the end of the day—if you live long enough—like most people, you will get out of life what you deserve.”
— Charlie Munger Primary source“If you always tell people why, they’ll understand it better, they’ll consider it more important, and they’ll be more likely to comply. Even if they don’t understand your reason, they’ll be more likely to comply.”
— Charlie Munger Primary source“I think track records are very important, If you start early trying to have a perfect one in some simple thing like honesty, you’re well on your way to success in this world.”
— Charlie Munger Primary source“It is paradoxical and disturbing to us that economists have long praised foolish spending as a necessary ingredient of a successful economy.”
— Charlie Munger Primary source“Biological creatures ordinarily prefer effort minimization in routine activities and don’t like removals of long-enjoyed benefits.”
— Charlie Munger Primary source“I find it quite useful to think of a free market economy—partly free market economy—as sort of the equivalent of an ecosystem. Just as animals flourish in niches, people who specialize in some narrow niche can do very well.”
— Charlie Munger Primary source“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 warehourses of Costco.”
— Charlie Munger Primary source“Take a simple idea and take it seriously.”
— Charlie Munger Primary source“The best thing any parent can do is be a good example.”
— Charlie Munger Primary source“Part of what you must learn is how to handle mistakes and new facts that change the odds. Life, in part, is like a poker game, wherein you have to learn to quit sometimes when holding a much-loved hand.”
— Charlie Munger Primary source“Everybody who is adult should save and not be stupidly spending money and defer gratification to get more later.”
— Charlie Munger Primary source“If you don’t get elementary probability into your repertoire, you go through a long life like a one-legged man in an ass-kicking contest.”
— Charlie Munger Primary source“If you have competence, you pretty much know its boundaries already. To ask the question [of whether you are past the boundary] is to answer it.”
— Charlie Munger Primary source“Mankind invented a system to cope with the fact that we are so intrinsically lousy at manipulating numbers. It’s called the graph.”
— Charlie Munger Primary source“If you want to change behaviors, you have to change motivations.”
— Charlie Munger Primary source“You don’t need to take the last dollar.”
— Charlie Munger Primary source“Just as animals flourish in niches, people who specialize in the business world—and get very good because they specialize—frequently find good economics that they wouldn’t get any other way.”
— Charlie Munger Primary source“Our game is recognize a big idea when it comes along, when one doesn’t come along very often. Opportunity comes to the prepared mind.”
— Charlie Munger Primary source“I don’t play in a game where the other people are wise and I’m stupid. I look for a place where I’m wise and they’re stupid.”
— Charlie Munger Primary source“I’m afraid that’s the way it [reality] is. If there are twenty factors and they interact some, you’ll have to learn to handle it—because that’s the way the world is. But you won’t find it that hard if you go at it Darwin-like, step by step with curious persistence. You’ll be amazed at how good you can get.”
— Charlie Munger Primary source“The way to win is to work, work, work, work and hope to have a few insights. 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 Primary source“I am a biography nut myself. And I think when you’re trying to teach the great concepts that work, it helps to tie them into the lives and personalities of the people who developed them. I think you learn economics better if you make Adam Smith your friend. That sounds funny, making friends among the eminent dead, but if you go through life making friends with the eminent dead who had the right ideas, I think it will work better for you in life and work better in education. It’s way better than just giving the basic concepts.”
— Charlie Munger Primary source“Ideology does some strange things and distorts cognition terribly. If you get a lot of heavy ideology young, and then you start expressing it, you are really locking your brain into a very unfortunate pattern. And you are going to distort your general cognition.”
— Charlie Munger Primary source“Trying to minimize taxes too much is one of the great standard causes of really dumb mistakes.”
— Charlie Munger Primary source“Choose clients as you would friends.”
— Charlie Munger Primary source“The life of Darwin demonstrates how a turtle may outrun a hare, aided by extreme objectivity, which helps the objective person end up like the only player without a blindfold in a game of Pin the Tail on the Donkey.”
— Charlie Munger Primary source“At Harvard Business School, the great quantitative thing that bonds the first-year class together is what they call decision tree theory. All they do is take high school algebra and apply it to real-life problems. And the students love it. They’re amazed to find that high school algebra works in life.”
— Charlie Munger Primary source“Our experience tends to confirm a long-held notion that being prepared, on a few occasions in a lifetime, to act promptly in scale, in doing some simple and logical thing, will often dramatically improve the financial results of that lifetime.”
— Charlie Munger Primary source“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 Primary source“Show me the incentive and I will show you the outcome.”
— Charlie Munger Disputed“There’s hardly anything more important than being rational or objective.”
— Charlie Munger Primary sourceBenjamin Franklin A.P. Møller Andrew S. Grove T. E. Lawrence Archimedes