Who is Charlie Munger and what are Mungerisms?

Who is Charlie Munger and what are Mungerisms?
19 Apr 2017

Charlie Munger is the Vice President and Co-Chairman of Berkshire Hathaway.  I wrote in a previous blog about the growth of Berkshire Hathaway has had from $19/share in 1964 to around $220,000/share today.  Even though Warren Buffett is more popular and recognizable to the average American, Charlie has the best quotes. What are Mungerisms?  It Charlie’s way, at age 93, of passing along some “life lessons” he’s picked up over the years as he navigated through the challenging world of life and investing:

Here’s are a few of my favorite ‘Mungerisms’:

“A lot of people with high IQs are terrible investors because they’ve got terrible temperaments. You need to keep raw irrational emotion under control.”

“The best thing a human being can do is help another human being know more.”

“It’s waiting that helps you as an investor, and a lot of people just can’t stand to wait. If you didn’t get the deferred-gratification gene, you’ve got to work very hard to overcome that.”

“I don’t spend much time regretting the past, once I’ve taken my lesson from it. I don’t dwell on it.”

“The investment game always involves considering both quality and price, and the trick is to get more quality than you pay for in price. It’s just that simple.”

Then there is my all-time favorite Mungerism. During the 2000 Berkshire Hathaway annual meeting, Charlie was asked about the internet and technology stocks (right before the tech bubble burst). Charlie’s response: “When you mix raisins and turds, you’ve still got turds!”

Background: Warren Buffett and Charlie Munger met at a not-so-coincidental dinner party in Omaha.  The meeting was put on at the urging of a family friend Dr. Edwin Davis. Earlier in the decade, Dr. Davis made a bold move; he invested money with a “kid” in his 20’s that had very little experience and no “Wall-Street connections.”  That kid happened to be Warren Buffett.  When asked why he would take such a risk, Dr. Davis replied, “Warren reminded me a lot like Charlie Munger.”

Charlie was a small business owner and aspiring lawyer at the time living in Los Angeles, while Warren was “fundraising” with his family and friends and running an investment company.  By 1965, Warren had convinced Charlie to step down as active member of the law-firm he created and become partners.

I hope that you can take away a piece of advice from one of Charlie’s many Mungerisms.
Jonas

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Jonas Everett

Jonas C. Everett is originally from Cedar Rapids, Iowa, where he still resides with his wife, JoDee, and daughters, Ella and Addison. He graduated from the University of Northern Iowa in 1993 where he majored in Communications. He has 22 years of experience in the investment industry and estate planning business. He is currently a Partner of “Premier Investments of Iowa, Inc.” Jonas is also the founder and creator of “Lighted Tunnel Succession Systems,” which can be found on www.lightedtunnel.com. The last 10 years, he has been in charge of mergers and acquisitions for Premier Investments of Iowa, Inc. In 2011, Jonas founded the National Association of Retired Insurance Agents, to help retiring insurance agents implement their own business succession plans. His main focus is Estate Planning and Investments for Senior Citizens and Pre-Retirees, and he also specializes in Retirement Income. He is a speaker for the Cedar Rapids School Buddies Program for 5th and 6th Graders. In his free time he enjoys golf, reading, and spending time with family and friends.