Charlie Munger (Trades, Portfolio) is Warren Buffett (Trades, Portfolio)’s right-hand man and the man who convinced Buffett to turn his back on deep value and plunge in the world of quality investing, arguably the most important decision of his life.
Munger is an accomplished investor in his own right, having run a partnership similar to that of Buffett’s before coming aboard at Berkshire (BRK.A, Financial)(BRK.B, Financial), and he’s also arguably one of the world’s most respected thinkers. Below are some of his best, most informative quotes, starting with one of the most notable quotes Munger has ever issued:
“The liabilities are always 100% good. It’s the assets you have to worry about.” –Source
“There’s danger in just shoveling out money to people who say, ‘My life is a little harder than it used to be.' At a certain place you’ve got to say to the people, ‘Suck it in and cope, buddy. Suck it in and cope.'” – University of Michigan
"Confucius said that real knowledge is knowing the extent of one’s ignorance. Aristotle and Socrates said the same thing. Is it a skill that can be taught or learned? It probably can if you have enough of a stake riding on the outcome. Some people are extraordinarily good at knowing the limits of their knowledge because they have to be. Think of somebody who’s been a professional tightrope walker for 20 years – and has survived. He couldn’t survive as a tightrope walker for 20 years unless he knows exactly what he knows and what he doesn’t know. He’s worked so hard at it because he knows if he gets it wrong he won’t survive. The survivors know. Knowing what you don’t know is more useful than being brilliant." –A Fireside Chat With Charlie Munger
"Wisdom acquisition is a moral duty. It’s not something you do just to advance in life. Wisdom acquisition is a moral duty. As a corollary to that proposition which is very important, it means that you are hooked for lifetime learning. And without lifetime learning, you people are not going to do very well. You are not going to get very far in life based on what you already know. You’re going to advance in life by what you learn after you leave here.” –USC Law Commencement Speech, May 2007
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"I constantly see people rise in life who are not the smartest, sometimes not even the most diligent, but they are learning machines. They go to bed every night a little wiser than they were when they got up and, boy, does that help, particularly when you have a long run ahead of you." –USC Law Commencement Speech, May 2007
"Ninety-nice percent of the troubles that threaten our civilization come from too optimistic accounting. And yet these damn accountants with their desire for mathematical purity want to devote exactly as much attention to accounting that is too pessimistic as they do to accounting that is too optimistic – which is crazy. Ninety-nine percent of the problems come from being too optimistic. Therefore, we should have a system where the accounting is way more conservative." –University of Michigan
"I don’t love Ben Graham and his ideas the way Warren does. You have to understand, to Warren – who discovered him at such a young age and then went to work for him – Ben Graham’s insights changed his whole life, and he spent much of his early years worshiping the master at close range. But I have to say, Ben Graham had a lot to learn as an investor. His ideas of how to value companies were all shaped by how the Great Crash and the Depression almost destroyed him, and he was always a little afraid of what the market can do. It left him with an aftermath of fear for the rest of his life, and all his methods were designed to keep that at bay." –A Fireside Chat With Charlie Munger
