10 More Lessons From Charlie Munger

Deserved Trust Charlie Munger

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Q2 2020 hedge fund letters, conferences and more

So easy to pick ten more.

10 More Lessons From Charlie Munger

Like Top 40 Radio, “The Hits Just Keep On Coming:”

1) If Warren Buffett Had Gone Into Ballet, No One Would Have Heard Of Him”

We are best served when people do what they do best.

Managed care guidelines mandate Internal Medicine treat anxiety and depression.

But psychiatric care is outside Internal Medicine’s circle of competence.

As Charlie says, “It’s not a competence if you don’t know the edge of it.”

When inexpert treatment fails, patients are belatedly routed to Psychiatry, amidst needless suffering and, perhaps, worsened symptoms.

Sage advice I heard in youth: “They pay you for what you’re good at.”

That is the world as it should be.

But managed care can pervert incentives.

Putting cost savings ahead of patient care.

2) Fish Where The Fish Are

No matter how competent you are, if you’re in the wrong place, success may elude you.

As Charlie instructs, always fish where the fish are.

Charlie loves fish stories.

He asked the owner of a tackle shop whether fish are drawn to colorful lures:

“Mister, I don’t sell to fish.”

3) Be Honest And Moral Not Just Because It’s Right, Because It Works Best

Peter Kaufman is always telling me if the crooks only knew how much money you could make by being honest, they’d all behave differently.” —Charles T. Munger

4) “There Is No Love So Right As Admiration-Based Love”

People love for many reasons: beauty, charm, passion, obsession.

As Cole Porter wrote, such love may be “too hot not to cool down.”

But love based on admiration—accomplishment, morality and decency—is not only the noblest love, but the love most likely to endure.

5) Work For People You Respect

An old buddy of mine, hair-trigger mind, good at what he does, fell into deep, deep trouble.

Not for anything he did.

For what his boss did.

Working for people you don’t respect is toil.

Promotes cynical detachment and models bad behavior.

The coup de grace:

Innocent and left holding the bag.

6) Too Soon Old, Too Late Smart

From the German, “Wir zu früh alt, zu spät klug erhalten!”

Dad wished he had known at 30 what he knew at 40.

Ten years later he wished he knew at 40 what he now knew at 50.

And so on.

At any age you can learn what Charlie Munger taught over a long and successful life.

He’ll be 97 in January!

Free on Youtube:

The Psychology of Human Misjudgment

A Conversation with Charlie Munger

Charlie Munger Commencement Address USC

Throughout the web and in books:

Poor Charlie’s Almanack: The Wit and Wisdom of Charles T. Munger

The Tao of Charlie Munger

Charlie Munger: The Complete Investor

Listen, read, learn.

The rewards are breathtaking.

7) Hide Your Light Under A Bushel Basket

I know a good thinker partnered with a great thinker.

If the good thinker brings the great thinker to a presentation the deal is blown away.

Because the great thinker must always prove he’s the smartest person in the room.

And proceeds to prove he’s not.

“Your job under any circumstance is to make the client believe he’s the smartest guy in the room.”—Charles T. Munger, quoting a senior partner admonishing a crackerjack young attorney.

8) [Addiction] Is Always Associated With Moral Breakdown

Medicine nobly seeks to eschew moral judgment.

Treat the disease.

Never judge the patient.

But highflown principle can obscure hardnosed reality.

Some psychiatrists are so open-minded their brains fall out.

There are psychiatric conditions that ravage moral judgment.

Manic tyrants delight in mass murder.

Addicted mothers steal from their sleeping children.

An obsessive-compulsive patient interrupts a resuscitation to ask a question for the hundredth time.

I never perceived moral breakdown in mental illness until I encountered Charlie’s timeless Harvard address:

The Psychology of Human Misjudgment

Great principles can obscure ugly facts.

9) “There Is Great Pleasure To Be Derived From Getting Deserved Trust”

We are all hedonists.

We seek pleasure from our senses.




All passing pleasures.

Charlie identifies the pleasure that lasts a lifetime.

Feels good and right ever after:

Deserved Trust

I will always remember this phone call:

“My internist’s office says I have to see you.

They said, ‘Don’t go to anyone else!’”

10) “The Highest Form That Civilization Can Reach Is A Seamless Web of Deserved Trust”

What do you do when something works?

Repeat it!

What does Charlie Munger know that is the heart and soul of so many things?


Repeat and compound deserved trust and enter Charlie’s seamless web where we should all wish to live and work.

From successful partnership to successful business:

Berkshire Hathaway!*

From successful marriage to successful family!

From successful principles—the Declaration of Independence and the United States Constitution—to successful nation!

Like Charlie Says: “It’s All So Simple!”

*Full disclosure: contented shareholder.

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