Charlie Munger, weatherman.
Posted: November 28, 2023 Filed under: America Since 1945, business, California Leave a comment
“Like Warren, I had a considerable passion to get rich,” Munger told Roger Lowenstein for Buffett: The Making of an American Capitalist, published in 1995. “Not because I wanted Ferraris — I wanted independence. I desperately wanted it. I thought it was undignified to have to send invoices to other people.”
from Bloomberg.
Munger never stopped preaching old-fashioned virtues. Two of his favorite words were assiduity and equanimity.
He liked the first, he said in a speech in 2007, because “it means sit down on your ass until you do it.” He often said that the key to investing success was doing nothing for years, even decades, waiting to buy with “aggression” when bargains finally materialized.
He liked the second because it reflected his philosophy of investing and of life. Every investor, Munger said frequently, should be able to react with equanimity to a 50% loss in the stock market every few decades.
The Financial Times has the best obituary, noting stuff others miss like Munger’s role in funding abortion rights, here’s a link that will work for the first three lucky readers.
Munger on horse race betting, from his most famous (or second most famous?) speech:
How do you get to be one of those who is a winner—in a relative sense—instead of a loser? Here again, look at the pari-mutuel system. I had dinner last night by absolute accident with the president of Santa Anita. He says that there are two or three betters who have a credit arrangement with them, now that they have off-track betting, who are actually beating the house. They’re sending money out net after the full handle—a lot of it to Las Vegas, by the way—to people who are actually winning slightly, net, after paying the full handle. They’re that shrewd about something with as much unpredictability as horse racing. And the one thing that all those winning betters in the whole history of people who’ve beaten the pari-mutuel system have is quite simple. They bet very seldom. It’s not given to human beings to have such talent that they can just know everything about everything all the time. But it is given to human beings who work hard at it—who look and sift the world for a mispriced bet—that they can occasionally find one. And the wise ones bet heavily when the world offers them that opportunity. They bet big when they have the odds. And the rest of the time, they don’t. It’s just that simple. That is a very simple concept. And to me it’s obviously right—based on experience not only from the pari-mutuel system, but everywhere else.”
One day Warren Buffett and Charlie Munger visited the set of The Office to film a comedy video for the Berkshire Hathaway annual meeting. Everyone swarmed around Buffett but nobody really knew Munger. When the lunch break came I had the opportunity to take my plate and sit right down across from him.
From reading his Wikipedia page that morning I’d learned that Charlie Munger had been a weatherman during World War II, so I asked him about that. “It was kind of a humdrum job,” he said, modest. “A lot of people had humdrum jobs in the war.” His job was hand-drawing weather maps to predict the best times to fly planes across the Bering Strait to our Soviet allies in such a way that the engines wouldn’t ice up and kill the pilots. It seems like that might teach you something about probability and decision-making under uncertainty.
We talked about Clifton’s Cafeteria in downtown LA. He expressed admiration for that institution.
In 1931, Clinton leased a “distressed” cafeteria location at 618 South Olive Street in Los Angeles and founded what his customers referred to as “The Cafeteria of the Golden Rule”. Patrons were obliged to pay only what they felt was fair, according to a neon sign that flashed “PAY WHAT YOU WISH.” The cafeteria, at the western terminus of U.S. Route 66, was notable for serving people of all races, and was included in The Negro Motorist Green Book.
The conversation itself wasn’t that profound, but it launched me on a project of learning about more about Munger and his thinking that’s really changed my life.
“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.
(this from a guy whose first child died of leukemia).
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.”
His prescription is logical, he says.
“Staying cheerful” is “a wise thing to do,” Munger told Quick, adding that in order to do so, you have to let go of negative feelings.
“And can you be cheerful when you’re absolutely mired in deep hatred and resentment? Of course you can’t. So why would you take it on?” Munger said.
from 2019. (Struck by a resemblance to the mantra Liam Clancy gave Bob Dylan: “no fear, no meanness, no envy.”) He was committed to being rational, and he was witty, he expressed a lot of wisdom in a fast and punchy way. You could listen to him talk for a long time and not get bored. (And he could talk for a long time too.)
On getting the first $100,000, the hard part:
Munger holding forth in February, 2022 with a rare stock pick:
But I would argue that if I was investing money for some sovereign wealth fund or some pension fund with a 30,40, 50-year time horizon I buy Costco at the current price.
Here’s Costco vs. S&P 500 over that timeline:
(although my guy was talking 30-50 years.)
Posting about Munger has led to some interesting real life connections. The Mungerheads search out every scrap on the man. They’re interesting people to talk to, and you usually learn something
pic from the Daily Journal Co. website.
In appreciation of Munger’s life and wisdom, here are references to the man over the years at Helytimes:
Munger Speaks, 2019. On stagnation, and some life advice.
Munger and Lee Kuan Yew. There was a Confucian streak in Munger, maybe a little anti-democratic.
Buffett Bits, and Munger, from the 2020 annual meeting.
Munger and Buffett highlights from the 2021 annual meeting.
Charlie Munger Deep Cuts, my most thorough look at the guy and his wisdom (some funny ones, too, see what he says about Al Gore.
Ominous Remark from Charlie Munger, 2018.
“I’ve mellowed because I consider it counterproductive to hate as much as both parties now hate, and I have disciplined myself,” Munger said. “I now regard all politicians higher than I used to. I did that as a matter of self-preservation.” He said that he had re-read “The Decline and Fall of the Roman Empire,” and it made him “feel a lot better about the current political scene. We’re way ahead of the Romans at the end.”
That’s a pretty low bar, I pointed out.
“It’s very helpful — I suggest you try it,” Munger replied. “Politicians are never so bad that you don’t live to want them back. There will come a time when the people who hate Trump will wish that he was back
Free Samples, from 2023, a look at a commonality in Buffett-Munger businesses.
I’m All Right on That One, a few quotes from the bros of Omaha, 2023:
CHARLIE MUNGER: I used to come to the Berkshire annual meetings on coach from Los Angeles. And it was full of rich stockholders. And they would clap when I came into the coach section. I really liked that. (LAUGHTER) (APPLAUSE)
How the Chevalier de Méré met Blaise Pascal, a look at the origins of probability theory.
Obviously, you’ve got to be able to handle numbers and quantities—basic arithmetic. And the great useful model, after compound interest, is the elementary math of permutations and combinations. And that was taught in my day in the sophomore year in high school. I suppose by now in great private schools, it’s probably down to the eighth grade or so.
It’s very simple algebra. It was all worked out in the course of about one year between Pascal and Fermat. They worked it out casually in a series of letters.
More.
You know what? I wish they’d build the giant near-windowless dorm he proposed for UC Santa Barbara.
Helytimes 