“If you make yourself a very reliable person and stay reliable all your life, faithfully doing whatever you engage to do, it will be very hard for you to fail at anything you want.” –Charlie Munger.
“If the business is good enough, it will carry a lousy manager. And the converse case, where a really good manager gets in a really lousy business, he’ll ordinarily have a very imperfect record. In other words, it’s a rare person that can take over a textile business, totally doomed—which is what Warren [Buffett] did in his youthful folly— and turn it into what’s happened here. You should not be looking for other Warrens on the theory they’re under every bush.” –Charlie Munger.
“One of the reasons we’ve been able to do pretty well is that we early recognized that very smart people do very dumb things. And we tried to figure out why. And we also wanted to know who, so we could avoid them.”
— -Charlie Munger.
“When you’re trying to determine something like intrinsic value and margin of safety and so on, there’s no one easy method that could be simply mechanically applied by, say, a computer and make anybody who could punch the buttons rich. By definition, this is going to be a game which you play with multiple techniques and multiple models, and a lot of experience is very helpful. I don’t think you can become a great investor very rapidly any more than you could become a great bone tumor pathologist very rapidly. It takes some experience and that’s why it’s helpful to get a very early start…. We’ve never had any system for being able to make correct judgments on the values of all businesses. We throw almost all decisions into the too hard pile, and we just sift for a few decisions that we can make that are easy. And that’s a comparative process. And if you’re looking for an ability to correctly value all investments at all times, we can’t help you.”
“When people talk about sigmas, in terms of disaster potentialities in markets, they’re all crazy. They got the idea that bad results in markets would be predicted by Gaussian distributions. And the way they decided on that outcome was it made everything so easy to compute. They don’t follow Gaussian distributions. You have to believe in the Tooth Fairy to believe that.”
“The whole investment world is more and more competitive, and if you talk about a real credit contraction, which gums up the whole civilization, no one would welcome that. And I would predict that if we ever had a really big credit contraction after a period like the one we’re in with all this excess, which is causing so much envy and resentment, that we would get legislation that most of us wouldn’t like.”
“Man has known for a long time that getting too enchanted with the trappings of power is counterproductive. The Roman emperor that’s most remembered as presiding over a period of great felicity was Marcus Aurelius, who was totally against the trappings of power even though he had them all — he had all the power. So I think all these things can be abused, and I think the best way to tackle a subject is to provide examples of contrary behavior.” —Charlie Munger.