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In engineering, people have a big margin of safety. But in the financial world, people don't give a damn about safety. They let it balloon and balloon and balloon. It's aided by false accounting.

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
People
Damn
False
Aided
Safety
Balloon
Financial
Margin
Bigs
Balloons
Give
Accounting
Giving
Margins
World
Engineering

More quotes by Charlie Munger

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The investment game is getting more and more competitive.
Charlie Munger
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Early Charlie Munger is a horrible career model for the young, because not enough was delivered to civilization in return for what was wrested from capitalism. And other similar career models are even worse.
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The first chance you have to avoid a loss from a foolish loan is by refusing to make it there is no second chance.
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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.
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It's hard to predict what will happen with two brands in a market. Sometimes they will behave in a gentlemanly way, and sometimes they'll pound each other. I know of no way to predict whether they'll compete moderately or to the death. If you could figure it out, you could make a lot of money.
Charlie Munger
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Whenever you think something or some person is ruining your life, it's you. A victimization mentality is so debilitating.
Charlie Munger
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The stupid and dishonest accountants allowed the genie of totally inappropriate accounting to descend on derivatives books. And once this has happened - people get status, etc. - it's impossible to get it back into the bottle.
Charlie Munger
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See's candy company was the first high-quality business we ever bought.
Charlie Munger
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Litigation is notoriously time-consuming, inefficient, costly and unpredictable.
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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One of the first big bubbles, of course, was the huge and horrible South Sea Bubble in England. And the aftermath was interesting. Many of you probably don't remember what happened after the South Sea Bubble, which caused an enormous financial contraction, and a lot of pain. They banned publicly traded stock in England for decades.
Charlie Munger
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Proper accounting is like engineering. You need a margin of safety. Thank God we don't design bridges and airplanes the way we do accounting.
Charlie Munger
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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
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We have to have a special insight, or we'll put it in the 'too tough' basket. All of you have to look for a special area of competency and focus on that.
Charlie Munger
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It would be easier to screw up American Express than Coke or Gillette, but it's an immensely strong business.
Charlie Munger
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In my life there are not that many questions I can't properly deal with using my $40 adding machine and dog-eared compound interest table.
Charlie Munger
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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
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Someone will always be getting richer faster than you. This is not a tragedy.
Charlie Munger
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I think you'll make more money in the end with good ethics than bad. Even though there are some people who do very well, like Marc Rich-who plainly has never had any decent ethics, or seldom anyway. But in the end, Warren Buffett has done better than Marc Rich-in money-not just in reputation.
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You have to have a temperament to grab ideas and do sensible things. Most people don’t grab the right ideas or don’t know what to do with them.
Charlie Munger