Charlie Munger: Perfectly amazing mental malfuncttion

“It’s your alternatives that are competing for the use of your time or money, that matter in judging whether you take action or not. And of course, those vary greatly from time to time and from company to company. And we tend to make all of our financial decisions based on our opportunity costs, just as like they teach in freshman economics. And the rest of the world has gone off on some crazy kick where they can create a standard formula, and that’s cost. They even get a cost of equity capital for some business that’s old and filthy rich. It’s a perfectly amazing mental malfunction.” –Charlie Munger.