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Show me the incentive and I will show you the outcome

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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Incentive
Incentives
Outcome
Outcomes
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More quotes by Charlie Munger

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A lot of opportunities in life tend to last a short while, due to some temporary inefficiency... For each of us, really good investment opportunities aren't going to come along too often and won't last too long, so you've got to be ready to act and have a prepared mind.
Charlie Munger
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Ben Franklin and Samuel Johnson, he credits their wisdom for his success. They were both utterly brilliant men. And powerful communicators. Both have helped me all the way through life. Their lessons are easy to assimilate.
Charlie Munger
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We may well have a competitive advantage buying decent businesses at decent prices. But they won't be fabulous businesses and fabulous prices. There's too much competition and money out there, with many buyout specialists.
Charlie Munger
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If only I had the influence with my wife and children that I have in some other quarters!
Charlie Munger
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There has never been a master plan. Anyone who wanted to do it, we fired because it takes on a life of its own and doesn't cover new reality. We want people taking into account new information.
Charlie Munger
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Here's one truth that perhaps your typical investment counselor would disagree with: if you're comfortably rich and someone else is getting richer faster than you by, for example, investing in risky stocks, so what?! Someone will always be getting richer faster than you. This is not a tragedy.
Charlie Munger
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Mimicking the herd invites regression to the mean.
Charlie Munger
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Intelligent people make decisions based on opportunity costs.
Charlie Munger
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The best thing a human being can do is to help another human being know more.
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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If we've been a little more successful than other people, is because we always realised that the school of life was always open, and if you were not learning more you are falling behind.
Charlie Munger
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Failure to handle psychological denial is a common way for people to go broke: you have made an enormous commitment to something. You have poured effort and money in. And the more you put in, the more that the whole consistency principle makes you think, Now it has to work. If I put in just a little more, then it will work.
Charlie Munger
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We have a passion for keeping things simple.
Charlie Munger
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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.
Charlie Munger
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Being rational is a moral Imperative. You should never be stupider than you need to be.
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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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.
Charlie Munger
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Stock-picking is like gambling: those who win well, seldom bet, but when they do, they bet heavily.
Charlie Munger
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I think I've been in the top 5% of my age cohort all my life in understanding the power of incentives, and all my life I've underestimated it.
Charlie Munger
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If you have competence, you pretty much know its boundaries already. To ask the question (of whether you are past the boundary) is to answer it.
Charlie Munger