Looking forward to getting a transcript of Charlie Munger yesterday at the Daily Journal shareholders’ conference. Here the 95 year old former meteorologist and HelyTimes Hero talks to CNBC’s Becky Quick:
BECKY QUICK: Anything that rises to your radar screen now that may be under the radar for other people?
CHARLIE MUNGER: Well, nobody knows how much of this money printing we can do. And of course we have politicians who like– and are in both parties, who like to believe that it doesn’t matter how much you do. That we can ignore the whole subject and just print money as convenient. Well, that’s the way the Roman Empire behaved, then it was ruined. And that’s the way the Weimar Republic was ruined. And– it’s– there is a point where it’s dangerous. You know, and of course, my attitude when something is big and dangerous is to stay a long way away from it. Other people want to come as close as possible without going in. That’s too tricky for me. I don’t like it.
BECKY QUICK: In terms of possibly getting sucked up into it?
CHARLIE MUNGER: Yes. I– I– if there’s a big whirlpool in the river, I stay a long way away from it. There were a bunch of canoeists once that tried to– to run the Aaron Rapids. I think they were from Scandinavia. And– and the fact that the whirlpools were so big made them very eager to tackle this huge challenge. The death rate was 100%. I regard that as a normal result.
Are we in The Great Stagnation?
CHARLIE MUNGER: The opportunities that we all remember came from a demoralized period when about 90% of the natural stock buyers got very discouraged with stocks. That’s what created the opportunity for these fabulous records that my generation had. And that was a rare opportunity that came to a rare group of people of whom I was one. And Warren was another.
BECKY QUICK: So you’re talking–
CHARLIE MUNGER: And people who start now have a much less– they have lower opportunity.
BECKY QUICK: Do you think we saw a generational low after 2008, beginning of 2009?
CHARLIE MUNGER: Generational? Maybe.
BECKY QUICK: Charlie, so many of the people who come here come because they’re looking for advice not on business or investments as much as they’re looking for just advice on life. There were a lot of questions today, people trying to figure out what the secret to life is, to a long and happy life. And– and I just wonder, if you were–
CHARLIE MUNGER: Now that is easy, because it’s so simple.
BECKY QUICK: What is it?
CHARLIE MUNGER: 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. And all these simple rules work so well to make your life better. And they’re so trite.
BECKY QUICK: How old were you when you figured this out?
CHARLIE MUNGER: About seven. I could tell that some of my older people were a little bonkers. I’ve always been able to recognize that other people were a little bonkers. And it helped me because there’s so much irrationality in the world. And I’ve been thinking about it for a long time, its causes and its preventions, and so forth, that I– sure it’s helped me.
I noticed a glitch in the transcript, btw. It’s written as follows:
BECKY QUICK: Do you think we saw a generational low after 2008, beginning of 2009?
CHARLIE MUNGER: Generational? Maybe.
BECKY QUICK: We–
CHARLIE MUNGER: Yeah, I don’t think the market is going to be cheaper.
But if you listen closely it’s pretty clear Munger says “I don’t think Bank of America is going to be cheaper.” Almost exactly nine years ago today, Feb 2009, BAC was trading at $5.57. Today it’s at $29.12.
This book is an excellent size and weight. Small, portable, yet solid. It’s published by the Naval Institute Press, they who took a chance on an unknown insurance man named Tom Clancy who’d written a thriller called The Hunt For Red October.
Amazon suggested this book to me as I was browsing translations of Sun Tzu. Military history has interested me since I was a boy, maybe because 1) the stakes are so high and 2) the stories are so vivid. Metaphors and similes drawn from famous war events are powerful and stark. Consider for example Friedman’s description of the Battle of the Bulge:
… Although the Germans had caught the Allies at their culminating point, the Germans reached their own far too early. Newly created infantry units were filled with hastily trained and inexperienced conscripts. These green units could not effectively hold the territory gained by the leading panzer units. On 22 December the fog cleared and Allied air units hammered the German formations from the skies. Despite the prestaged fuel reserves, panzer units still ran out of fuel, just when they needed it to escape the Allied aerial counterattack.
Buried in there is a tactical lesson, and also an intense story about some poor children getting blown up right before Christmas.
The author was a second lieutenant in the Marine Corps. If I understand right, might make this book the equivalent of a book called like Writing A Hit TV Show by a staff writer. But Friedman seems like he’s gone deep on the knowledge, and there’s a quote from Gen. Anthony Zinni on the back. Good enough for me.
Alexander The Great would not be in the least bit perplexed by the enemy that we face right now in Iraq, and our leaders going into this fight do their troops a disservice by not studying — studying, vice just reading – the men who have gone before us. We have been fighting on this planet for 5,000 years and we should take advantage of their experience.
So goes a quote from James Mattis that opens this book. Friedman cites the example of Cortes in 1520 CE, referring to written accounts of Alexander’s battle at Gaugamela eighteen hundred years before to design his tactics against the Mexica/Aztec.
What is strategy? What is tactics? Where do they divide? Friedman summarizes Clausewitz:
Clausewitz divided warfare into tactics, actual combat between opposed military forces, and strategy, the latter being the overarching plan for using tactical engagements to achieve the ends as set forth by policy… The strategy acts as a bridge between the tactical actors (military forces) and the desired political end state of the entity those forces serve.
Much of this book is summaries of Clausewitz, really and Sun Tzu as well. How could it not be?
What I thought I remembered most of all from Clausewitz is the concept of Figerspitzengefühl, fingertips-feel, a sensing of what’s going on, and where. But I don’t have my copy of Vom Kriege at hand, and searching for fingerspitzengefühl it seems possible the term may be of later origin. Maybe it was discussed in the introduction.
Clausewitz is very concerned with will, the imposing of one’s will on the enemy, breaking the will of the enemy. Given the time and place where Clausewitz was coming from, 1800s what’s now-Germany, I can’t help but think this idea of will was connected to other philosophers like Kant who were pondering the meanings and dimensions of will around then.
Friedman picks up on the idea of will, or what he refers to as moral cohesion. He digs in on the idea of destroying the enemy’s moral cohesion.
Clausewitz defined the destruction of an enemy as “they must be put in such a condition that they can no longer carry on the fight” (emphasis added). This does not mean that the enemy force must be totally destroyed. Indeed, he went on to say, “when we speak of destroying the enemy’s forces we must emphasize that nothing obliges us to limit this idea to physical forces: the moral element must be considered. In other words, breaking the moral cohesion of the opposing force is destruction of that force as an effective unit and the true goal of tactics.
In a whole chapter on moral cohesion, Friedman quotes Marine Major Earl “Pete” Ellis speaking of how important it was to marines fighting insurgents in the Philippines to believe that the United States was acting from “purely altruistic motives.” Jim Storr’s The Human Face of War is quoted as well: “In general, defeat occurs when the enemy believes he is beaten… Defeat is a psychological state.”
Friedman brings out Clausewitz’s concept of “the center of gravity,” too, and points out, in a thought-provoking way that it’s not totally clear what Clausewitz meant or understood by “gravity,” and what Clausewitz understood about physics. Clausewitz died in 1831 — have we even figured out gravity now? Clausewitz noted that the center of gravity could be a capital city, an ally, the shared interests of an alliance, particular leaders, or popular opinion. The North Vietnamese correctly located the center of gravity of the US in the Vietnam War as American political will. They destroyed our moral cohesion.
Friedman is tough on the U.S war in Iraq, which he says is “a glaring example of tactics, strategy, and policy in disarray.” We need to maintain our sense of moral cohesion. It’s slipping away from us.
We get some Boyd, too, a favorite here at HelyTimes. As a bottom line lesson on tactics, this is pretty clear and cool:
Boyd says if you move and decide faster than your enemy, you will win.
Friedman concludes by pointing out that tactics are subordinate to strategy.
The tactician employs tactics that will best serve the strategy, but he must also know when a flawed strategy cannot be achieved with reasonable tactics. Duty might still demand that he try to accomplish the mission, but he will need to inform the strategist that his aims are improbable.
Taking on a big concept like tactics and attempting to codify and create a short, comprehensible theory or unified system is a nobel mission. I found On Tactics profitable to read and full of stimulating ideas and examples.
Sometimes, for instance watching Trump talk about the wall, I wonder how much of politics is just people enjoying and wallowing in different kinds of lies. Reminds me of this passage from Mark Helprin’s novel A Winter’s Tale. A mayoral election is going on in New York:
He never talked about garbage, electricity, or police. He only talked about winter, horses and the countryside. He spoke almost hypnotically about love, loyalty, and esthetics … He promised them love affairs and sleigh races, cross-country skiing on the main thoroughfares, and the transfixing blizzards that howled outside and made the heart dance.
They thought, or so it was generally stated at the time, that if they were going to be lied to, they might as well pick the liar who did it best.
Looking for this quote in my old files I found F. Scott Fitzgerald, in The Beautiful and the Damned, talking about Congress:
he tried to imagine himself in Congress rooting around in the litter of that incredible pigsty with the narrow and porcine brows he saw pictured sometimes in the rotogravure sections of the Sunday newspapers, those glorified proletarians babbling blandly to the nation the ideas of high school seniors! Little men with copy-book ambitions who by mediocrity had thought to emerge from mediocrity into the lustreless and unromantic heaven of a government by the people – and the best, the dozen shrewd men at the top, egotistic and cynical, were content to lead this choir of white ties and wire collar-buttons in a discordant and amazing hymn, compounded of a vague confusion between wealth as a reward of virtue and wealth as a proof of vice, and continued cheers for God, the Constitution, and the Rocky Mountains!
Although fifteen years later [Marcel Proust] would recall his year as a soldier with total delight, as “a paradise,” at the time he complained bitterly and his mother had to write him consoling, babying letters, telling him to think of the twelve months as twelve chocolate squares.
Imagine the guys in the barracks finding your letters from your mom telling you to think about your year as twelve chocolate squares.
In his short biography of Custer, Larry McMurtry mentions a few other short biographies he judges fine, including with a characteristic lack of false modesty his own biography of Crazy Horse, and this Edmund White biography of Proust.
So, I got it and read it. Wonderful act of compression. Thoughtful, succinct, at times funny, human, gentle, this book is a great guide to the man and artist, what his work meant and what he was after.
Thought this was wild:
In 1911 Proust became a subscriber to Théàtrophone, a service that held a telephone receiver up at a concert, which allowed people to stay at home and hear live music on their receivers.
The few hundred pages of Remembrance of Things Past I was supposed to read in college (“Proust, Joyce and Modernism”: a class I chose to take!) were tough going for me. Proust won’t be hurried. This guy didn’t even get a job until he was in his thirties. This was an unpaid job, as a librarian, and eventually he got fired for being out sick too much. Proust is not interested in going at anyone’s pace except the languid pace of a man lying in bed, leisurely following the meandering paths of his own memory.
Proust always claimed that he had a bad memory and that, besides, a carefully reconstructed recollection, prompted by photos or shared reminiscences, was invariably colorless, Only an involuntary memory, triggered by a taste or smell or other sensation, could erase the passage of time and restore a past experience in its first, full effulgence.
Proust’s world was pretentious and can seem ridiculous. Proust himself was a great mimic, reducing people to fits of laughter with his impressions. He loved collecting anecdotes and gossip, grilling waiters for details (Proust was an extravagant tipper.) White says that Georg D. Painter’s Marcel Proust: A Biography, the one-volume edition, is
so amusing that it could be used as a source for a stand-up comic.
I’ll be looking into this claim.
How about Proust’s maid, Céleste?
Céleste’s great anxiety was Proust’s morning (or afternoon) coffee. It had to be ready the moment he rang for it, but the preparation took at least half an hour, since he liked the water to be dripped, drop by drop, through the grounds in order to produce the thickest, strongest possible “essence” of coffee. Nor could he bear for it to be reheated…
This is after Céleste had been standing up for hours listening to Proust recount gossip he’d collected on “rare midnight sorties,” Proust waiting til midnight to go out because he was so afraid of dust. Well, White tells us we read Proust because he knows that
only the gnarled knowledge that suffering brings us is of any real use.
Maybe Céleste pondered that while she remade the coffee.
Leaving the house was a challenge for Proust, but near the end of his life he made an outing to see Vermeer’s View of Delft:
On the night before he died Proust dictated a last sentence: “There is a Chinese patience in Vermeer’s craft.”
White tells us. Man Ray took a picture of Proust right after the author died, you can see it here if you’re so inclined. I’m told by the Met that Cocteau wrote of the scene:
Those who have seen this profile of calm, of order, of plenitude, will never forget the spectacle of an unbelievable recording device come to a stop, becoming an art object: a masterpiece of repose next to a heap of notebooks where our friend’s genius continues to live on like the wristwatch of a dead soldier.
True despair hours:
Reader Tabitha in Marin County, CA writes:
Always love your writeups on the Super Bowl coaches. What do you think of Boy Wonder Sean McVay?
Thanks for writing Tabitha! Most of what little I have to say about Sean McVay I got out on this week’s Great Debates feat. Mina Kimes. To be honest, much like the Rams themselves, McVay seems to be: good but not interesting. A sense of his vibe in this NFL.com article by Michael Silver:
As he greeted McVay in a room that would soon be vacated by Demoff, Snead and the other Rams officials present, Goff didn’t know what to expect.
“They left us alone for half an hour, maybe a little longer,” Goff recalls. “Afterward, I remember texting my dad, ‘If they decide to hire him, I’m all in.’ ”
Goff also texted an NFL Network analyst who, nearly a year later, would write a very long feature story about the league’s leading Coach of the Year candidate: “Loved him. Mini Gruden haha. Everything revolves around the QB… If McVay is the guy I’d be fired up”
Full disclosure: A few minutes later, I also got a text from McVay (who, incidentally, is not a huge fan of punctuation): “I loved him bro he is awesome”
This WashPo article compares him to other young leaders (profitlessly imo).
McVay’s grandfather John coached the New York Football Giants in the ’70s.
McVay’s girlfriend is Ukrainian model Veronika Khomyn, but a quick scan of her Instagram reveals no real insights into coaching philosophy.
Gonna give the edge here to Belichick, a special, unique weirdo. We predict a decisive Patriots win.
Let’s hope both teams control their A. P. E.s
For philosophical consideration of the Super Bowl, we return once again to the remarks of Deadwood creator David Milch on the Super Bowl and Kierkegaard:
in Bloomberg today!
High in the rocks water was collecting from the recent rains
Splashing down, pooling in the natural tanks
Saw a frog (California tree frog?) in this one.
Some of the plants out there flower in ways that seem monstrous, almost obscene
Is this a natural formation in the rock, or an ancient ruin?
More archaeology will be needed at this site.