The Rational Investor #007: Charlie Munger on Investing and Life
Happy Saturday to you,
Welcome to the 7th edition of The Rational Investor Newsletter.
As I’m sure you already know, the investing legend, Charlie Munger, passed away this week. As impactful as his investing wisdom has been, he has been equally impactful in doling out life wisdom. His ability to teach people not what to think, but how to think is a skill unique to him.
In this newsletter, I usually try to share a single long quote from a great investor, but today, I’m going to share a few of my favorite (but lesser-known) quotes from Charlie Munger.
Every quote can be found in the book, The Tao of Charlie Munger. The book is a collection of great Munger quotes (along with wonderful commentary from David Clark) that will help you think differently. It’s a short, but impactful read. I highly recommend it.
Onto the main event…
Here’s Seven Quotes from Charlie Munger on Investing and Life:
ON BRILLIANCE BEING OVERRATED AS AN INVESTOR:
“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent. There must be some wisdom in the folk saying: ‘It’s the strong swimmers who drown.’”
ON HARD WORK:
“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.”
ON BUYING DURING PEAKS OF UNCERTAINTY:
“We have a history when things are really horrible of wading in when no one else will.”
ON PATIENCE AND DISCIPLINE IN INVESTING:
“It’s waiting that helps you as an investor, and a lot of people just can’t stand to wait.”
ON NOT FOLLOWING THE CROWD:
“If people weren’t wrong so often, we wouldn’t be so rich.”
ON THE IMPORTANCE OF TEMPERAMENT:
“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.”
ON THE VALUE OF READING:
"In my whole life, I have known no wise people who didn't read all the time—none, zero. You'd be amazed at how much Warren reads—and how much I read. My children laugh at me. They think I'm a book with a couple of legs sticking out."
RIP Mr. Munger.
Thanks for reading. I’ll be back again next week with more timeless wisdom from great investors.
Enjoy the weekend!
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