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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.
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
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Derivatives
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More quotes by Charlie Munger
Stock-picking is like gambling: those who win well, seldom bet, but when they do, they bet heavily.
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I would argue that a majority of the horrors we face would not have happened if the accounting profession developed and enforced better accounting.
Charlie Munger
A lot of success in life and business comes from knowing what you want to avoid: early death, a bad marriage, etc.
Charlie Munger
Darwin paid particular attention to disconfirming evidence. Objectivity maintenance routines are totally required in life if you're going to be a great thinker.
Charlie Munger
I think the main figure that matters to all of us, including people in the media, is: How does GDP per capita grow? And those figures have been very good. There is a huge flux both up and down, so it isn't like we're all static in status. What's important is that pie grows.
Charlie Munger
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.
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I believe in the discipline of mastering the best that other people have ever figured out. I don't believe in just sitting down and trying to dream it all up yourself. Nobody's that smart.
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Like the stocks of both Berkshire and Wesco to trade within hailing distance of what we think of as intrinsic value. When it runs up, we try to talk it down. That's not at all common in Corporate America, but that's the way we act.
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A few public hangings will really change behavior. One of our Presidents said if he could execute three people each year for no cause, it would make it a lot easier to govern. When someone said that's not enough, he said, Oh yes it is, because I'd publish the list of people under consideration.
Charlie Munger
And your brain doesn't naturally know how to think the way Zeckhauser knows how to play bridge. for example, people do not react symmetrically to loss and gain. Well maybe a great bridge player like Zeckhauser does, but that's a trained response. Ordinary people, subconsciously affected by their inborn tendencies.
Charlie Munger
I'm a bull on Berkshire Hathaway. There may be some considerable waiting, but I think there are some good days ahead.
Charlie Munger
I think that one should recognize reality even when one doesn't like it indeed, especially when one doesn't like it.
Charlie Munger
The game of life is the game of everlasting learning. At least it is if you want to win.
Charlie Munger
We don't have an isolated group [of senior managers] surrounded by servants. Berkshire's headquarters is a tiny little suite. We just came back from Berkshire's board meeting it had moved up to the board room of the Kiewit company and [it was so large and luxurious that] I felt uncomfortable.
Charlie Munger
The world of derivatives is full of holes that very few people are really aware of. It's like hydrogen and oxygen sitting on the corner waiting for a little flame.
Charlie Munger
To atone, I teach and try to set an example... I love spreading this stuff around. Just because it's trite doesn't mean it isn't right. In fact, I like to say, 'If it's trite, it's right.'
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
A great business at a fair price is superior to a fair business at a great price.
Charlie Munger
Berkshireis not as good as it was in terms of percentage compounding [going forward], but it's still a hell of a business.
Charlie Munger
Beta and modern portfolio theory and the like - none of it makes any sense to me.
Charlie Munger
