Charlie Munger (Trades, Portfolio) is one of the world’s greatest investors and thinkers. His mindset cannot be defined, nor his life summarized in one article, but here are three of my favorite quotes of his that I believe provide an excellent summary of his views on life and his approach to learning.
The first is this: “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.”
Munger’s whole life has been devoted to learning and studying. He does this partly to improve his knowledge and partly because he loves learning. In some respects, that’s his secret. It can be very hard to force yourself to read and learn every day, but Munger does it because he loves learning.
His desire to learn a little more every day has been a vital part of his success as an investor, business owner and philanthropist. When it comes to investing, being able to change your views and opinions and learn about new ideas and market developments is vital for long-term success.
Munger has mastered this art. He never stands still, and he never lets one idea take over and push out other ideas. He’s not looking for views to confirm his. He seeks out different ideas to challenge his own and try to get around the problem of confirmation bias, which brings me to the second quote I want to highlight: “We all are learning, modifying, or destroying ideas all the time. Rapid destruction of your ideas when the time is right is one of the most valuable qualities you can acquire. You must force yourself to consider arguments on the other side.”
Many people might consider Munger one of the greatest thinkers and investors of all time, but he knows he’s only human and will make mistakes. He also knows he does not have all the answers to all the questions in life. That’s why he’s always learning, breaking down ideas and considering different views.
Munger has never let his success go to his head. He’s never let other opinions drive his views or relied on others to set his views. Instead, the billionaire develops his own views through research and is willing to change them if the facts change.
And he follows these principles because he knows how weak the human condition really is: “A lot of people with high IQs are terrible investors because they’ve got terrible temperaments. And that is why we say that having a certain kind of temperament is more important than brains. You need to keep raw irrational emotion under control. You need patience and discipline and an ability to take losses and adversity without going crazy. You need an ability to not be driven crazy by extreme success.”
I think these three quotes really sum up Munger’s mentality. To be successful, investors need to keep learning and discovering more about the world they inhabit. By continually seeking out new ideas, investors can challenge their own, so they don’t become stuck with out-of-date views.
This continual learning process should also help investors avoid becoming too emotional. I know I’ve learned a lot about controlling emotions and the impact emotional decisions can have on outcomes by reading. Reading about others’ mistakes and errors is one of the easiest (and pain-free) ways to learn from mistakes without making them yourself.
Put simply, if you want to improve your outcomes in investing and life, the key is to keep reading and learning. This should help you stay on the right track emotionally and educationally. Learning is generally low-cost, so it’s one of the best ways to improve outcomes with the least amount of risk.
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