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Accounting is a big subject and there are huge forces in play. The entire momentum of existing thinking and existing custom is in a direction that allows terrible follies to happen, and the terrible follies have terrible consequences.

Charlie Munger

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Charlie Munger
Age: 100
Born: 1924
Born: January 1
Business Person
Financier
Investor
Lawyer
Omaha
Nebraska
Charlie Thomas Munger
Charles T. Munger
Charles Thomas Munger
Happen
Forces
Accounting
Bigs
Direction
Custom
Force
Consequence
Momentum
Happens
Subject
Existing
Play
Entire
Customs
Thinking
Subjects
Folly
Terrible
Allows
Huge
Consequences
Follies

More quotes by Charlie Munger

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Wall Street has too much wealth and political power.
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It's not a competency if you don't know the edge of it.
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Hard work, honesty, if you keep at it, will get you almost anything.
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If the value of a company doesn't just scream out at you, it's too close.
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It's not supposed to be easy. Anyone who finds it easy is stupid.
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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.
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The number one idea is to view a stock as an ownership of the business and to judge the staying quality of the business in terms of its competitive advantage. Look for more value in terms of discounted future cash-flow than you are paying for. Move only when you have an advantage.
Charlie Munger
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Anytime anybody offers you anything with a big commission and a 200-page prospectus, don't buy it. Occasionally, you'll be wrong if you adopt Munger's Rule. However, over a lifetime, you'll be a long way ahead - and you will miss a lot of unhappy experiences.
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You have to have a temperament to grab ideas and do sensible things. Most people don’t grab the right ideas or don’t know what to do with them.
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One metric catches people. We prefer businesses that drown in cash. An example of a different business is construction equipment. You work hard all year and there is your profit sitting in the yard. We avoid businesses like that. We prefer those that can write us a check at the end of the year.
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Over many decades, our usual practice is that if something we like goes down, we buy more and more. Sometimes something happens, you realize you’re wrong, and you get out. But if you develop correct confidence in your judgment, buy more and take advantage of stock prices.
Charlie Munger
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When it gets into these spikes, with shortages and uproar and so forth, people go bananas, but that's capitalism.
Charlie Munger
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How should the best parts of psychology and economics interrelate in an enlightened economist's mind?... I think that these behavioral economics...or economists are probably the ones that are bending them in the correct direction. I don't think it's going to be that hard to bend economics a little to accommodate what's right in psychology.
Charlie Munger
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We have the same problem as everyone else: It's very hard to predict the future.
Charlie Munger
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The world is getting very much more competitive.
Charlie Munger
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The old culture had come out of poverty, out of English customs.
Charlie Munger
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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. But there are also cases where you have to recognize that you have no wisdom to add - and that your best course is to trust some expert.
Charlie Munger
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The investment game is getting more and more competitive.
Charlie Munger
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I don't want to sell credit to people who are going to hurt themselves with it. You should only sell products that are good for the people who use them. Some disagree with this, but I know I'm right. That is to say, you're talking to a Republican who admires Elizabeth Warren.
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In the 1930s, there was a stretch where you could borrow more against the real estate than you could sell it for. I think that's what's going on in today's private-equity world.
Charlie Munger