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[With] closet indexing....you're paying a manager a fortune and he has 85% of his assets invested parallel to the indexes. If you have such a system, you're being played for a sucker.
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
System
Closet
Closets
Manager
Indexes
Assets
Indexing
Paying
Parallel
Managers
Sucker
Fortune
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Played
Parallels
More quotes by Charlie Munger
I like people admitting they were complete stupid horses' asses. I know I'll perform better if I rub my nose in my mistakes. This is a wonderful trick to learn.
Charlie Munger
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
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
When you locate a bargain, you must ask, 'Why me, God? Why am I the only one who could find this bargain?'
Charlie Munger
Show me the incentive and I will show you the outcome
Charlie Munger
There’s no way that you can live an adequate life without many mistakes. In fact, one trick in life is to get so you can handle mistakes. Failure to handle psychological denial is a common way for people to go broke.
Charlie Munger
It's been my experience in life if you just keep thinking and reading, you don't have to work.
Charlie Munger
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
Some people seem to think there's no trouble just because it hasn't happened yet. If you jump out the window at the 42nd floor and you're still doing fine as you pass the 27th floor, that doesn't mean you don't have a serious problem. I would want to address the problem right now.
Charlie Munger
So, economics should emulate physics' basic ethos, but its search for precision in physics-like formulas is almost always wrong in economics.
Charlie Munger
It's stupid the way people extrapolate the past -- and not slightly stupid, but massively stupid.
Charlie Munger
I think it would be a great improvement if there were no D&O insurance . The counter-argument is that no-one with any money would serve on a board. But I think net net you'd be better off.
Charlie Munger
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
I regard it as very unfair, but capitalism without failure is like religion without hell.
Charlie Munger
It's a good habit to trumpet your failures and be quiet about your successes.
Charlie Munger
Is anyone really surprised that Warren, who is the ultimate embodiment of concentrated decision-making power, picked somebody [Bill and Melinda Gates] who he thinks is like him in many important ways? It was a noble and sensible decision.
Charlie Munger
Just avoid things like racing trains to the crossing, doing cocaine, etc. Develop good mental habits.
Charlie Munger
Part of [having uncommon sense] is being able to tune out folly, as opposed to recognizing wisdom. If you bat away many things, you don't clutter yourself.
Charlie Munger
A great business at a fair price is superior to a fair business at a great price.
Charlie Munger
We bought a doomed textile mill [Berkshire Hathaway] and a California S&L [Savings & Loan Wesco] just before a calamity. Both were bought at a discount to liquidation value.
Charlie Munger
