Charlie Munger, the billionaire investor and longtime partner of Warren Buffett, has passed away at 99, leaving a significant void in the financial landscape.
On his demise prominent market voice Ajay Bagga has applauded Charlie’s contribution to the investing world by stating that, “Charlie Munger was a true renaissance man, a multi-dimensional personality, who combined common sense, discipline, wit and wisdom into a superlative combination. His greatest contribution was to move Warren Buffett from the Benjamin Graham inspired value investing mode to ” great companies at fair valuations ” mode. He was a life-long learner who emphasized reading and thinking. Great investor and great contributor to the investing body of knowledge for decades.”
Charlie Munger once famously said EBITDA was “bullshit earnings.” To explore the brilliant mind of Munger, Warren Buffett’s trusted, 99-year-old partner and the Vice-Chairman of Berkshire Hathaway, you only need to look at some of his timeless quotes.
Here, we plumb through 21 of Munger’s most thought-provoking quotes. His no-nonsense approach to finance, life, and much more continues to shape minds and add to his legacy.
Munger’s Gems
1. Those of you who are about to enter business school or who are there, I recommend you learn to do it our way. But at least until you’re out of school, you have to pretend to do it their way. People don’t seem to get that point.
2. If people weren’t so often wrong, we wouldn’t be so rich Warren!
3. I think you would understand any presentation using the word EBITDA if every time you saw that word, you just substituted the phrase with ‘bullshit earnings.’
4. I’m optimistic about life. If I can be optimistic when I’m nearly dead, surely the rest of you can handle a little inflation.
5. The best way to get what you want in life is to deserve what you want. How could it be otherwise? The world is not crazy enough to look for a lot of undeserving people to reward.
6. Spend each day trying to be a little wiser than you were when you woke up. 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.
7. On fraudulent investment bankers, Munger said, “You don’t want to be like the motion picture executive in California. They said his funeral was so large because everybody wanted to make sure he was dead.’’
8. I’ve listened to many nonsensical cost-of-capital discussions, but never heard an intelligent one.
9. Munger’s take on lowering expectations: “That’s how I got married. My wife lowered her expectations.”
10. 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.
11. Sharing his views on the importance of health and the role of money in life, Munger quipped, “Some people are confused. I play golf with a man. He says, ‘What good is health? You can’t buy money with it!’’’
12. There are a whole lot of things I don’t think about, and one of them is companies that are losing $2 or $3 billion a year.
13. Money management requires people to pretend they can do something that they can’t, and like it when they really don’t. I think that’s a terrible way to spend your life, but it’s very well paid.
14. Asked for a formula on successful investing, Munger replied, “I can’t give you a formulaic approach because I don’t use one. If you want a formula, you should go back to graduate school. They’ll give you lots of formulas that won’t work.’’
15. There is no better teacher than history in determining the future… There are answers worth billions of dollars in 30$ history books.
16. It’s perfectly obvious, at least to me, that to say that derivative accounting in America is a sewer is an insult to sewage.
17. As a business, casualty insurance is a tough game. There are temptations to be stupid. It’s like banking.
18. I don’t like multi-tasking. I see these people doing three things at once and I think, God, what a terrible way that is to think.
19. I like cryptocurrencies a lot less than you do. And I think it’s just disgusting that people who are professional traders go into trading cryptocurrencies. It’s like somebody else is trading in turds and you decide you can’t be left out.
20. Warren reminds me that once I asked a man who had just left a large investment bank, “How does your firm make its money? ’ He said, “Off the top, off the bottom, off both sides, and in the middle.’’
21. It takes character to sit with all that cash and to do nothing. I didn’t get top where I am by going after mediocre opportunities.