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A banker who is allowed to borrow money at X and loan it out at X plus Y will just go crazy and do too much of it if the civilization doesn't have rules that prevent it.

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
Rules
Civilization
Banker
Crazy
Borrow
Doesn
Bankers
Money
Loan
Much
Prevent
Plus
Allowed

More quotes by Charlie Munger

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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
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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.
Charlie Munger
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My idea of a good place to shop is Costco - it has these heavily marbled fillet steaks. The idea of eating some wheat thing and washing it down with carrot juice has never appealed to me.
Charlie Munger
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Well the open-outcry auction is just made to turn the brain into mush: you've got social proof, the other guy is bidding, you get reciprocation tendency, you get deprival super-reaction syndrome, the thing is going away... I mean it just absolutely is designed to manipulate people into idiotic behavior.
Charlie Munger
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Economics is in many respects the queen of the soft sciences. It's expected to be better than the rest. It's my view that economics is better at the multi-disciplinary stuff than the rest of the soft science. And it's also my view that it's still lousy.
Charlie Munger
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We both (Charlie Munger and Warren Buffett) insist on a lot of time being available almost every day to just sit and think. That is very uncommon in American business. We read and think.
Charlie Munger
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It would be nice if this [finding really cheap stocks] happened all the time. Unfortunately, it doesn't.
Charlie Munger
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Three rules for a career: 1) Don’t sell anything you wouldn’t buy yourself 2) Don’t work for anyone you don’t respect and admire and 3) Work only with people you enjoy.
Charlie Munger
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In fact I've probably never seen such a wide moat.
Charlie Munger
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It's stupid the way people extrapolate the past -- and not slightly stupid, but massively stupid.
Charlie Munger
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Those of us who have been very fortunate have a duty to give back. Whether one gives a lot as one goes along as I do or a little and then a lot [when one dies] as Warrendoes is a matter of personal preference. I would hate to have people ask me for money all day long.
Charlie Munger
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We have a higher percentage of the intelligentsia engaged in buying and selling pieces of paper and promoting trading activity than in any past era. A lot of what I see now reminds me of Sodomand Gomorrah. You get activity feeding on itself, envy and imitation. It has happened in the past that there came bad consequences.
Charlie Munger
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The investment game always involves considering both quality and price, and the trick is to get more quality than you pay for in price. It's just that simple.
Charlie Munger
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The name of the game is continuing to learn. Even if you're very well trained and have some natural aptitude, you still need to keep learning.
Charlie Munger
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Intelligent people make decisions based on opportunity costs.
Charlie Munger
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You must value the business in order to value the stock.
Charlie Munger
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The investment game is getting more and more competitive.
Charlie Munger
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If you get into the mental habit of relating what you're reading to the basic structure of the underlying ideas being demonstrated, you gradually accumulate some wisdom.
Charlie Munger
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We don't have any miraculous way of avoiding taxes at Wesco and Berkshire.
Charlie Munger
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Over the very long term, history shows that the chances of any business surviving in a manner agreeable to a company's owners are slim at best.
Charlie Munger