Quote

The beauty of a financial institution is that there are a lot of ways to go to hell in a bucket. You can push credit too far, do a dumb acquisition, leverage yourself excessively - it's not just derivatives [that can bring about your downfall].

Charlie Munger

Change background

T
T
T

Change font

TAGS & TOPICS

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
Way
Dumb
Derivatives
Credit
Leverage
Financial
Bucket
Institutions
Buckets
Hell
Downfall
Bring
Acquisition
Ways
Institution
Beauty
Push
Excessively

More quotes by Charlie Munger

Image
The laws of thermodynamic s are such that if the water is getting warmer - and I believe it is - the energy of the weather is going to go up.
Charlie Munger
Image
You have to know accounting. It's the language of practical business life. It was a very useful thing to deliver to civilization. I've heard it came to civilization through Venice which of course was once the great commercial power in the Mediterranean. However, double entry bookkeeping was a hell of an invention.
Charlie Munger
Image
I have a name for people who went to the extreme efficient market theory-which is bonkers. It was an intellectually consistent theory that enabled them to do pretty mathematics. So I understand its seductiveness to people with large mathematical gifts. It just had a difficulty in that the fundamental assumption did not tie properly to reality.
Charlie Munger
Image
The tax code gives you an enormous advantage if you can find some things you can just sit with.
Charlie Munger
Image
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.
Charlie Munger
Image
Any year that you don't destroy one of your best-loved ideas is probably a wasted year
Charlie Munger
Image
I'm a bull on Berkshire Hathaway. There may be some considerable waiting, but I think there are some good days ahead.
Charlie Munger
Image
Don't do cocaine. Don't race trains. And avoid AIDS situations.
Charlie Munger
Image
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.
Charlie Munger
Image
For many of our shareholders, our stock is all they own, and we're acutely aware of that. Our culture [of conservatism] runs pretty deep.
Charlie Munger
Image
It's dangerous to short stocks.
Charlie Munger
Image
Wesco had a market capitalization of $40 million when we bought it [in the early 1970s]. It's $2 billion now. It's been a long slog to a perfectly respectable outcome - not as good as Berkshire Hathaway or Microsoft, but there's always someone in life who's done better.
Charlie Munger
Image
I think gold is a great thing to sew onto your garments if you're a Jewish family in Vienna in 1939, but civilized people don't buy gold, they invest in productive businesses.
Charlie Munger
Image
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
Image
Mimicking the herd invites regression to the mean.
Charlie Munger
Image
Never, ever, think about something else when you should be thinking about the power of incentives.
Charlie Munger
Image
Sears had layers and layers of people it didn't need. It was very bureaucratic. It was slow to think. And there was an established way of thinking. If you poked your head up with a new thought, the system kind of turned against you. It was everything in the way of a dysfunctional big bureaucracy that you would expect.
Charlie Munger
Image
Stock-picking is like gambling: those who win well, seldom bet, but when they do, they bet heavily.
Charlie Munger
Image
The theory of modern education is that you need a general education before you specialize. And I think to some extent, before you're going to be a great stock picker, you need some general education.
Charlie Munger
Image
I think the foundation at Berkshire [Buffett's stake in Berkshirewill pass to the Buffett Foundation upon his death] will be a plus because there will be a continuation of the culture. We'd still take in fine businesses run by people who love them.
Charlie Munger