Question: What’s so great about Charlie Munger?

Answer comes from Amaury Fernandez from Quora:

Professional and Personal Career: 

  •  Helped expand Warren Buffett’s investment philosophy by arguing that a great business at a fair price is superior to a fair business at a great price
  • Uses the idea of a multidisciplinary approach to learning, which means taking the big ideas in the subjects such as economics and psychology and using them to solve problems.
  • He made a term called “lollapalooza effects” which are a combination of  factors that produce a great result – such at the atomic bomb.
  • He has a talk called the Psychology of Human Misjudgement that identifies many cognitive biases such as authority, social proof, and twaddle tendency.
  • When he went through a divorce and he loss of his first child Teddy, he still was proactive about keeping his relationships with his children. This was even though he had lost a lot of his money, lost his house, and was forced to drive a broken down Pontiac Sedan due to the lack of maturity and commitment in his relationship with his gold digger ex-wife. He still maintained a positive attitude and was driven to come out of this struggle and make himself into an even greater success.

Quotes

  • “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.”
  • “In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time – none, zero. You’d be amazed at how much Warren reads – and at how much I read. My children laugh at me. They think I’m a book with a coupe of legs sticking out.”
  • “It never ceases to amaze me to see how much territory can be grasped if one merely masters and consistently uses all the obvious and easily learned principles.”
  • “I’m not entitled to have an opinion unless I can state the arguments against my position better than the people who are in opposition. I think that I am qualified to speak only when I’ve reached that state.”
  • “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 America that says that anything that won’t send you to prison is okay. We believe there should be a huge area between everything you should do and everything you can do without getting into legal trouble. I don’t think you should come anywhere near that line. We don’t deserve much credit for this. It helps us make more money. I’d like to believe that we’d behave well even if it didn’t work. But more often, we’ve made extra money from doing the right thing.”

Endorsements

  • “He is truly the broadest thinker I have ever encountered.” – Bill Gates, Microsoft
  • Charlie’s ethical standards should be beamed by satellite to all global financial centers to prevent future Enrons and WorldComs.” – Bill Gross, PIMCO
  • “On two occasions, I saw Charlie pay more than he needed to in business transactions. First, with two little old ladies who held notes in a business we were buying, which we could have easily redeemed at far less than face value – Charlie nevertheless paid them face value. Second, to raise some cash I needed for another investment, I offered to sell him my half of a venture we were in together, and he said to set a fair price – I said $130,00; he said, no, $230,000 was correct, and he paid me that.” – Rick Guerin, Pacific Partners
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