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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
Plus
Allowed
Rules
Civilization
Banker
Crazy
Borrow
Doesn
Bankers
Money
Loan
Much
Prevent
More quotes by Charlie Munger
Knowing what you don't know is more useful than being brilliant.
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We want very good leaders who have a lot of power.
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Almost all good businesses engage in 'pain today, gain tomorrow' activities.
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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.
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A lot of success in life and business comes from knowing what you want to avoid: early death, a bad marriage, etc.
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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.
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If only I had the influence with my wife and children that I have in some other quarters!
Charlie Munger
I have a black belt in chutzpah. I was born with it. Some people, like some of the women I know, have a black belt in spending. They were born with that. But what they gave me was a black belt in chutzpah.
Charlie Munger
I know just enough about thermodynamics to understand that if it takes too much fossil-fuel energy to create ethanol, that's a very stupid way to solve an energy problem.
Charlie Munger
There are two kinds of businesses: The first earns 12%, and you can take it out at the end of the year. The second earns 12%, but all the excess cash must be reinvested - there's never any cash. It reminds me of the guy who looks at all of his equipment and says, 'There's all of my profit.' We hate that kind of business.
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I think corporate managers should learn to be better investors because it would make them better managers.
Charlie Munger
Mimicking the herd invites regression to the mean.
Charlie Munger
It's a finite and very competitive world. All large aggregations of capital eventually find it hell on earth to grow and thus find a lower rate of return.
Charlie Munger
Derivative trading with mark-to-market accounting degenerates into mark-to-model. Two firms make a big derivative trade and the accountants on both sides show a large profit from the same trade.
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Hard work, honesty, if you keep at it, will get you almost anything.
Charlie Munger
Once you start doing something bad, then it's easy to take the next step - and in the end, you're a moral sewer.
Charlie Munger
I think there's an awful lot of twaddle and bullshit on EVA. The whole game is to turn retained earnings into more earnings. EVA has ideas about cost of capital that make no sense. Of course, if a company generates high returns on capital and can maintain this over time, it will do well. But the mental system as a whole does not work.
Charlie Munger
Capitalism is a pretty brutal place.
Charlie Munger
Since those don’t hit financial reports, the opportunities you had but didn’t accept, most people don’t bother thinking about them very much. At least that is a mistake we don’t make. We rub our own noses in our mistakes in blowing opportunities, as we just did.
Charlie Munger
You must know the big ideas in the big disciplines, and use them routinely - all of them, not just a few. Most people are trained in one model - economics, for example - and try to solve all problems in one way. You know the old saying: to the man with a hammer, the world looks like a nail. This is a dumb way of handling problems.
Charlie Munger
