The wisdom of Charlie Munger
The business news that matters
Hello and welcome to the latest edition of Off to Lunch…
Charlie Munger, Warren Buffett’s partner at Berkshire Hathaway, has died at the age of 99. Munger and Buffett are arguably the greatest partnership in business history having built Berkshire Hathaway into a $800 billion (£630 billion) investment giant and one of the biggest companies in the world. Munger met Buffett in 1959 and he joined Berkshire Hathaway as vice-president in 1978. Munger was due to turn 100 on January 1.
Munger became renowned for his rational thinking and generously sharing his wisdom through writing, speeches and interviews over many years. There is plenty for everyone to learn from his thoughts, especially business leaders. So, with that in mind, here are ten of his best quotes over the years and one from Buffett about Munger himself
Buffett on Munger:
“The blueprint he gave me was simple: Forget what you know about buying fair businesses at wonderful prices; instead, buy wonderful businesses at fair prices.”
And here are ten of Munger’s best quotes:
“My system in life is to figure out what’s really stupid and then avoid it.”
"I never allow myself to have an opinion on anything that I don't know the other side's argument better than they do."
"It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent."
“Every time you hear EBITDA, just substitute it with ‘bullsh*t’.”
“In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time — none, zero. You’d be amazed at how much Warren reads — and at how much I read. My children laugh at me. They think I’m a book with a couple of legs sticking out.”
“You don’t have a lot of envy, you don’t have a lot of resentment, you don’t overspend your income, you stay cheerful in spite of your troubles, you deal with reliable people and you do what you’re supposed to do. All these simple rules work so well to make your life better.”
“I find it much easier to find four or five investments where I have a pretty reasonable chance of being right that they're way above average. I think it's much easier to find five than it is to find 100.”
“The world is full of foolish gamblers and they will not do as well as the patient investors.”
“Understanding both the power of compound interest and the difficulty of getting it is the heart and soul of understanding a lot of things.”
“We’ve had enough good sense when something is working very well to keep doing it. I’d say we’re demonstrating what might be called the fundamental algorithm of life — repeat what works.”
For further enjoyment I recommend checking-out some recent interviews that Munger did. He spoke to the Financial Times in April, which you can find here. He also did a podcast interview with Acquired, which was published last month and you can see below, and spoke to CNBC, which you can see below too…
You can read a collection of Charlie Munger’s thoughts in his book: Poor Charlie’s Almanack: The Essential Wit and Wisdom of Charles T. Munger. More details about that book here
Other stories that matter…
1. The Competition and Markets Authority has said that the suppliers of some branded grocery products have pushed up their prices more than costs increased, and launched an investigation into the market for baby formula due to concerns about the lack of choice and information for parents. Prices for baby formula in the UK have risen by more than 25 per cent in the last two years and it is one of the shop-lifted products. However, despite concerns about prices, the CMA praised own-label products for offering a cheaper alternative to shoppers. You can find the CMA’s statement, which is part of a review of the groceries sector, here
2. Multiverse, the apprenticeship business founded by Euan Blair, appears to be having problems scaling-up. The company has posted a pre-tax loss of £40.5 million for the last financial year and is laying-off staff in the US, where it has expanded. Story by the Guardian here and feature by CityAM here
3. What is Tesla up to Manchester? Could this be the location for a new gigafactory in the UK? The Fast Charge newsletter has looked into it. More here
4. From Business Leader, a look at what can be learned from the stories of five businesses who disrupted an industry only to be disrupted themselves - Blockbuster, Nokia, Polaroid, Toy R Us and Myspace. You can read the piece
5. The Times has done an interesting profile of Will Still, the 31-year-old English football manager who has led Reims to fifth place in Ligue 1 in France. The sports world has shown much more of a willingness to appoint younger bosses than the business world has. Another example is Sean McVay was just 30 when he was hired as the coach of the LA Rams in the NFL. “I have been compared to pretty much everyone and I get where it is coming from. But I am not as good as they all are. I am still learning,” Still says in The Times piece Charlie Munger would approve of that sentiment. You can read more here.
Podcast…
A reminder that the latest episode of our Business Leader podcast looks at the story of how Metro became the most-read daily newspaper in the UK after launching in 1999. We speak to Deborah Arthurs, the editor-in-chief, and Richard Thomson, the managing director, about how Metro disrupted a highly competitive industry and how it has had to battle against a string of big challenges, some of which posed an existential threat to the business.
You can listen to the episode on Substack here, Spotify here and Apple here
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Best
Graham