CHARLIE MUNGER ALMANAC PDF
From the Foreword to Poor Charlie's Almanack For the first time ever, the wit and wisdom of Charlie Munger is available in a single volume: all his talks, lectures and public commentary. And, it has been written and compiled with both Charlie Munger and Warren Buffett's encouragement and cooperation. Brief Summary of Book: Poor Charlie’s Almanack: The Wit and Wisdom of Charles T. Munger by Charles T. Here is a quick description and cover image of book Poor Charlie’s Almanack: The Wit and Wisdom of Charles T. Munger written by Charles T. Munger which was published in 2005-1-1.
The Wit and Wisdom of Charles T. Munger: Poor Charlie’s Almanack, Seeking Wisdom, The Most Important Thing, and A Few Lessons for Invenstors and. Poor Charlie’s Almanack has ratings and reviews. Ian said: Best known as Warren Buffett’s long-time and media-shy investment partner, and as th. Poor Charlie almanack: rhc It:tnd “”dom of Charles T.Iunger I edited b’ .. well, all thanks to the wit, wisdom, speeches, and writings of Charlie Munger-this.
Reviewing a book which I absolutely love 'Poor Charlie's Almanack' by Charles T. Munger, the business partner of Warren Buffet and one of the richest people. Poor Charlie’s Almanack is an exploration of the mind of one of the most brilliant investors & thinkers of our time, Charlie Munger. The book is a compilation of his wisdom in the form of talks/speeches as well as input from those who know Charlie best.
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He has often said that academia has done a poor job on most subjects, especially psychology. The last aspect I would like to make a toast to is his liking of psychology. He is Vice-Chairman of Berkshire Hathaway Corporation, the diversified investment corporation chaired by Warren Buffett; in this capacity, Buffett describes Charlie Munger as “my partner.
The last section of the book contains a nice primer on the common psychological biases and how they can blind you. This is likely the most important book I’ve read to date. A bit ridiculous if you ask me!
Often, they just go aground in the more difficult voyages they choose, relying on their self-a September Learn how and when to remove this template message. Restrict yourself to your own garden, live in the present moment, lower your expectations, surround yourself with the love of friends and family and you will be happy. View all 3 comments.
He uses that curiosity to be a deep generalist in business. There are…I might tell a story about a darling little girl, wispy blonde hair, beautiful curls, charming lisp. It blends economics with psychology, which I absolutely love.
He talks at length about psychology and how important it is and how it can be improved, along with lots of other broad ranging topics. Munger shares with us his wisdom and expound them with great examples.
Self-pity gets fairly close to paranoia, and paranoia is one of the very hardest things to reverse. Harold Ship what is Seeking Wisdom? The first part consists of Munger’s life stories, as well as what close amlanac and family say about Munger. To see what your friends thought of this book, please sign up.
You’ve got to learn everything they teach.
Poor Charlie’s Almanack: The Wit and Wisdom of Charles T. Munger by Charles T. Munger
Therefore, they choose to spend a lot of time making each decision with patience, and let the outcomes of those decisions compound. Maybe I’m just getting lucky at picking books or maybe I’m easy to please when it comes to books. And he is conscious of bettering himself daily; his mentors are the eminent dead: I’m not umnger praise Munger’s wisdom again. This volume is huge and the book is in a large, coffee table style format, making it hard to read or put in your bag.
You want to deliver to the world what you would charli if you were on the other end. He keeps returning to these themes, which is fair enough, it’s mostly a compilation of his speeches, not his fault someone decided to put these together into a book, but why would the editor of the book assemble a bunch of speeches that are more or less redundant?
I swear I ended up carving out a chunk of time to finish this book just because I found it annoying to deal with. In terms of investing, this concept of saving your attention for the big idea is developed further by the image of the twenty-hole punch card.
Poor Charlie’s Almanack: The Wit and Wisdom of Charles T. Munger
Most people don’t grab the almxnac ideas or don’t know what to do with them. Munger practises some of the strongest morals I’ve seen since Franklin. Charlie also doesn’t believe in retirement, he adheres to the not so pervasive mantra that you should partake in activities until death. By using this site, you agree to the Terms of Use and Privacy Policy.
You’d be amazed at how much Warren [Buffett] reads — at how much I chzrlie. Mozart became the most famous composer in the world but was utterly miserable most of the time, and one of the reasons was because he always overspent his income.
Munger is a wisdom god.
You’ve got to hang reality on a theoretical structure with reasons. Politics, world news, photos, video, tech reviews, health, science and entertainment news. Lists with This Book.
Poor Charlie’s Almanack – Wikipedia
This article needs additional citations for verification. View all 9 comments. After reading Seeking Wisdom you probably long for more Munger wisdom. We have the priceless benefit of other people’s experience, conveniently compiled into books, so why should we learn all of life’s hard lessons ourselves?
You’ve poured effort and money in.
So for all who love mental models, frameworks and behavioral phenomenons in general. Charles Thomas Munger is an American business magnate, lawyer, investor, and philanthropist. It’s extremely rare and generous!
Although money is the main driver among rewards, it is not the only reward that works. Do be prepared for an almost fan-boy level of love for Benjamin Franklin.
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Poor Charlie’s Almanack is an exploration of the mind of one of the most brilliant investors & thinkers of our time, Charlie Munger. The book is a compilation of his wisdom in the form of talks/speeches as well as input from those who know Charlie best. Highly recommended for anyone who wants to improve the clarity of their thinking and decision making.
NOTES
-Just as multiple factors shape almost every system, multiple models from a variety of disciplines, applied with fluency, are needed to understand that system.
-Focus in what NOT to do before considering the affirmative steps in any given situation
-To identify potential “yes” candidates for investment, Charlie looks for an easy to understand, dominant business franchise that can sustain itself and thrive in all market conditions.
-A companies competitive advantage is it’s moat
-The habit of committing far more time to learning and thinking than to doing is no accident.
-Intellectual humility — Acknowledging what you don’t know is the dawning of wisdom
-It is better to remember the obvious than to grasp the esoteric
-Preparation. Discipline. Patience. Decisiveness.
-The future returns of Berkshire and Wesco won’t be as good in the future as they have been in the past. [Thus is true of all large, successful companies.] The only difference is that we’ll tell you.
-Since mistakes of omission [aren’t visible], most people don’t pay attention to them.
-Intelligent people make decisions based on opportunity costs — in other words, it’s your alternatives that matter.
-If you always tell people why, they’ll understand it better, they’ll consider it more important, and they’ll be more likely to comply. Even if they don’t understand your reason, they’ll be more likely to comply.
-Engineering idea of backup system and break points (mental model)
-Critical mass ( physics mental model )
-The psychology of misjudgment (20 principles)
-Evaluate the psychological factors that causes subconscious conclusions — many of which are wrong.
-Just doing something complicated in more and more volume enables human beings, who are trying to improve and are motivated by the incentives of capitalism, to do it more and more efficiently.
-The very nature of things is that if you get a whole lot of volume through your operation, you get better at processing that volume.
-If people tell you what you really don’t want to hear — what’s unpleasant — there’s an almost automatic reaction of antipathy. You have to train yourself out of it.
-Technology can help make production cheaper but it could also lower the cost you are able to sell it for
-If you play games where other people have the aptitudes and you don’t, you’re going to lose.
-You have to figure out where you’ve got an edge. And you’ve got to play within your own circle of competence.
-The winner has to bet very selectively
-If you have to choose one, bet on the business momentum, not the brilliance of the manager.
-Don’t sell anything you wouldn’t buy yourself.
-Don’t work for anyone you don’t respect and admire.
-Work only with people you enjoy.
-Have low expectations
-Have a sense of humor.
-Surround yourself with the love of friends and family.
-Live with change and adapt to it
-Heavy Ideology is one of the most extreme distorters of human cognition
-Being totally sure on issues like that with a strong, violent ideology, in my opinion, turns you into a lousy thinker. So beware of ideology-based mental misfunctions.
“The five essential entrepreneurial skills for success are concentration, discrimination, organization, innovation, and communication.” – Michael Faraday
-Human misery creates human mental misfunction
-It’s very important to create human systems that are hard to cheat.
-It’s much better to let some things go uncompensated — to let life be hard — than to create systems that are easy to cheat.
-Human beings are psychologically predisposed to commit fraud when available incentives overwhelm structural checks and balances.
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-What I’m against is being very confident and feeling that you know, for sure, that your particular intervention will do more good than harm, given that you’re dealing with highly complex systems wherein everything is interacting with everything else – In regards to fixing social problems
-You must have the confidence to override people with more credentials than you whose cognition is impaired by incentive-caused bias or some similar psychological force that is obviously present.
-Try to get rid of people who always confidently answer questions about which they don’t have any real knowledge.
-Appealing to another’s interest is a key of persuasion
-If I were running the civilization, compensation for stress in workers’ comp would be zero — not because there’s no work-caused stress, but because I think the net social damage of allowing stress to be compensated at all is worse than what would happen if a few people that had real work-caused stress injuries went uncompensated.
5 helpful notions For solving problems
1. Decide big “no brainer” questions first
2.Gain Numerical fluency (math is the language of God)
3. It is not enough to think through problems forward, you must also think in reverse.
4. The best most practical wisdom is elementary academic wisdom but thought of in a multidisciplinary manner.
5. Really big effects, lollapalooza effects, will often come only from large combinations of factors.
—————
-Incentive causes bias, a natural cognitive drift toward the conclusion that what is good for the professional is good for the client and wider civilization
-Truth is hard to assimilate in any mind when opposed by interest
-Biological creatures ordinarily prefer effort minimization in routine activities and don’t like removals of long-enjoyed benefits.
-One should recognize reality even when one doesn’t like it, indeed, especially when one doesn’t like it.
-Practically everybody overweighs the stuff that can be numbered because it yields to the statistical techniques they’re taught in academia. And people don’t mix in the hard-to-measure stuff that may be more important.
————
Extreme success is likely to be caused by some combination of the following factors:
A) Extreme maximization or minimization of one or two variables. Example, Costco or our furniture & appliance store.
B) Adding success factors so that a bigger combination drives success, often in nonlinear fashion, as one is reminded by the concept if breakpoint and the concept of critical mass in physics.
C) An extreme of good performance over many factors.
D) Catching and riding some sort of big wave.
————-
-Comparative advantage states that even if a manager can perform the full range of tasks better himself, it is mutually advantageous to divide them up.
-The craving for perfect fairness causes a lot of terrible problems in system function. Some systems should be made deliberately unfair to individuals because they’ll be fairer on average for all of us. Thus, there can be virtue in apparent non-fairness.
-If you can get really good at destroying your own wrong ideas, that is a great gift.
-You want to deliver to the world what you would buy if you were on the other end.
-I feel that I’m not entitled to have an opinion unless I can state the arguments against my position better than the people who are in opposition.
-Self-pity is always counterproductive. It’s the wrong way to think.
-If you don’t allow for self-serving bias in the conduct of others, you are, again, a fool.
The Psychology of Human Misjudgment
-I sought good judgement mostly by collecting instances of bad judgment, then pondering ways to avoid such outcomes.
-Cognition mimics perception in being misled by mere contrast
-Cognition is ordinarily situation-dependent so that different situations often cause different conclusions
1.Reward and punishment Superresponse tendency
-Never, ever, think about something else when you should be thinking about the power of incentives.
-Prompt rewards worked much better than delayed rewards in changing and maintaining behavior.
-A man has an acculturated nature making him a pretty decent fellow, and yet, driven both consciously and subconsciously by incentives, he drifts into immoral behavior in order to get what he wants, a result he facilitates by rationalizing bad behavior
(1) – Especially fear professional advice when it is especially good for the advisor
(2) – Learn and use the basic elements pf your advisor’s trade as you deal with your advisor
(3) Double-check, disbelieve or replace much of what you’re told, to the degree that seems appropriate after objective thought.
-Bad behavior is intensely habit-forming when it is rewarded
-Dread, and avoid as much you can, rewarding people for what can be easily faked.
-Some people use money to buy status and others use status to get money, while still others sort of do both things at the same time.
-Although money is the main driver among rewards, it is not the only reward that works. People also change their behavior and cognition for sex, friendship, companionship, advancement in status, and other non-monetary items.
-Granny’s rule…..eat vegetables before dessert….Do the unpleasant and necessary tasks first before proceeding to your pleasant tasks
2.Liking/Loving Tendency
-One very practical consequence of liking/loving tendency is that it acts as a conditioning device that makes the liker or lover tend to (1) to ignore faults of, and comply with wishes if, the object of his affection., (2) to favor people, products, and actions merely associated with the object of his affection & (3) to distort other facts to facilitate love.
3.Disliking/Hating Tendency
-Disliking/Hating Tendency also acts as a conditioning device that makes the disliker/hater tend to (1) ignore virtues in the object of dislike, (2) dislike people, products, and actions merely associated with the object of his dislike, (3) distort other facts to facilitate hatred.
4.Doubt-Avoidance Tendency
-The brain of man is programmed with tendency to quickly remove doubt by reaching some decision.
-What usually triggers this tendency is some combination of (1) puzzlement and (2) stress. And both of these factors naturally occur in facing religious issues. Thus, the natural state of most men is in some form of religion. And this is what we observe.
5.Inconsistency-Avoidance Tendency
-The brain of man conserves programming space by being reluctant to change, which is a form of inconsistency avoidance.
-It is much easier to prevent a habit than to change it
-Anti-change mode was caused by a combination of (1) It facilitated faster decisions when speed of decision was an important contribution to the survival of nonhuman ancestors that were prey.
(2) It facilitated the survival advantage that our ancestors gained by cooperating in groups, which would have been more difficult to do if everyone was always changing responses.
(3) It was the best form of solution that evolution could get to in the limited number if generations between the start of literacy and today’s complex modern life.
6.Curiosity Tendency
-In advanced human civilization, culture greatly increases the effectiveness of curiosity in advancing knowledge.
7.Kantian Fairness Tendency
-The “golden rule” requires humans to follow behavioral patterns that, if followed by all others, would make the surrounding human system work best for everybody.
8.Envy/Jealousy Tendency
-“It is not greed that drives the world, but envy.”
9.Reciprocation Tendency
10.Influence from Mere Association Tendency
-Some of the most important miscalculations come from what is accidentally associated with one’s past success, or one’s liking and loving, or one’s disliking and hating, which includes a natural hatred for bad news.
11.Simple, pain-avoiding psychological denial
-Cognitive dissonance
-The reality is too painful to bear, so one distorts the facts until they become bearable.
-In chemical dependency, wherein morals usually break down horribly, addicted persons tend to believe that they remain in respectable condition, with respectable prospects. They thus display an extremely unrealistic denial of reality as they go deeper and deeper into deterioration.
12.Excessive Self-regard Tendency
-Endowment effect …. over-praising your own possessions.
-Man’s excess of self-regard typically makes him strongly prefer people like himself.
-Fixable but unfixed bad performance is bas character and tends to create more of itself, causing more damage to the excuse giver with each tolerated instance.
Poor Charlies Almanack Free Pdf
-The best antidote to folly from an excess of self-regard is to force yourself to be more objective when you are thinking about yourself, your family and friends, your property, and the value of your past and future activity.
-Some high self-appraisals are correct and serve better than false modesty.
13.Overoptimism Tendency
14.Deprival-Superreaction Tendency
-The quantity of a man’s pleasure from a ten dollar gain does not exactly match the quantity of his displeasure from a ten-dollar loss.
15.Social Proof Tendency
-The otherwise complex behavior of man is much simplified when he automatically thinks and does what he observes to be thought and done around him.
-Learn how to ignore the examples from others when they are wrong, because few skills are more worth having.
16.Contrast-Misreaction Tendency
-“A small leak will sink a great ship.” The utility of the aphorism is large precisely because the brain so often misses the functional equivalent of a small leak in a great ship.
17.Stress-Influence Tendency
18.Availability-Misweighing Tendency
-This mental tendency echoes the words of the song: “When I’m not near the girl I live, I love the girl I’m near.”
-The great algorithm to remember in dealing with this tendency is simple: An idea or a fact is not worth more merely because it is easily available to you.
19.Use-It-or-Lose-It Tendency
-All skills attenuate with disuse.
-It is also essential for a thinking man to assemble his skills into a checklist that he routinely uses.
20.Drug-Misinfluence Tendency
21.Senescence-Misinfluence Tendency
-With advanced age, there comes a natural cognitive decay, differing among individuals in the earliness of its arrival and the speed of its progression.
22.Authority-Misinfluence Tendency
-Don’t assume the authority is right, learn to question everything.
-Be careful whom you appoint to power because a dominant authority figure will often be hard to remove.
23.Twaddle Tendency
-Many people are prone to babble meaningless nonsense that can distract from important work
24.Reason-Respecting Tendency
-Few practices are wiser than not only thinking through reasons before giving orders but also communicating these reasons to the recipient of the order.
-Unfortunately, Reason-Respecting Tendency is so strong that even a person’s giving of meaningless or incorrect reasons will increase compliance with his orders and requests.
25.Lollapalooza Tendency – The tendency to get extreme consequence from confluences of psychological tendencies acting in favor of a particular outcome