Charlie Munger is Warren Buffett’s long time investing partner and is known to possess an incredible mind. He will turn 100 on 1st
Jan 2024, yet can shower nuggets of wisdom on investing, business and life in general as eloquently as ever. This is from a fireside chat a year ago with Todd Combs, someone who is tipped to be Warren Buffett’s successor as the CIO at Berkshire Hathaway. For those who can’t listen to the full conversation, Frederik Gieschen has kindly shared the highlights in this blog. Some of our favourites:
“You just need one or two great businesses (“The people who tend to get the best results are fanatics.”)
Munger talked about Ken Langone:
The people who tend to get the best results are these fanatics who just keep searching for the great businesses. And the best of them don’t expect to find 10 or 20 or 30. They find one or two. And that’s the right way to do it. All you need are one or two.
I know the guy who invests with the banker that backed the Costco copy which was Home Depot. He also backed Eli Lilly very early. He has several billion dollars between those two investments. He didn’t need any more. And in a lifetime of investment banking, that’s what he got: two. I regard that as a successful life.
That isn’t what they teach in our educational institutions. They need some mystery they can teach that will make you good at investing. It’s total bullshit. There is no way to know enough about a thousand different stocks to be very good at it.Half the secret of life: obsession and a long attention span
I’m not a polymath. I am a guy who has been able to take moderate obsession and a long attention span and turn them into pretty good results. A long attention span will help you a lot, if you’re reasonably smart.
If you’re reasonably obsessed with something, even if it’s intermittent, and you have a long attention span, you keep working over the serious problems, you’ll stumble into an answer. That’s half the secret of life.
“I almost worship reason.”
I almost worship reason. You can argue that Henry Singleton did, too, and certainly Warren Buffet does, too. The people I know that are good, they feel you have a duty to become as wise as you can be by constantly studying things and thinking about it.
And that angle is partly temperamental. And partly, it was family example in my case. My Grandfather Munger, whose name I bear, was a self-made, self-educated man. He was a damn genius. And I watched him, and his life worked pretty well. He was not making many mistakes.
Look for people with the fiduciary gene.
Combs: Some of your heroes, not exclusive, Lee Kuan Yew, Otto von Bismarck, Deng Xiaoping, George Marshall. They all seem to have a sense of duty and honor as a common thread.
Munger: I like the fiduciary gene. Think of the difference between somebody like George Washington, who voluntarily left power, setting an example. And these paranoid rulers who come into power and start killing people to stay in power, trying to subvert the systems and so forth.
What maybe the current world is teaching us is, our forefathers who gave us term limits, they understood human nature. They were trying to prevent some major rifts, and it has worked pretty well so far.”
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