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!
Jeff and I talked about immigration, about his travels in the U.S. and then about Isaac Asimov’s Foundation series. He had just read it again after finding it for a dollar at a used book shop. I told him I read it as a kid and really liked it, and wondered if it held up. Surprisingly well he said. He then moved down to the other side of the table, I think to make sure that the students could more freely engage in the conversation.
Reading some of the former Texas congressman’s travel dispatches. He was just where I was, Taos pueblo:
We walked further into the village where I was struck by the magnificent beauty of the adobe homes, built next to and on top of one another. The Pueblo was established in the 15th century, had these homes been here that long? Men were shoveling snow off of the roofs against the backdrop of the breathtaking Taos mountains in the distance. As we walked, Tina shared with me history, of the Taos people and of her family. She talked about the role of the Catholic church and of the religion of the Taos pueblo. We talked about family, the village home she had just inherited from her mother, about the role of dance in her life, about her hopes for her community and her children.
In my grandparents’ time, Debbie said after a long while, we were not allowed to go into those mountains. When Teddy Roosevelt created the national forest, he took those mountains away from us. They are sacred mountains, so you can imagine what that felt like. We had to get special permission, a pass, to go beyond the fence line into what had been our home for centuries. It was only until Richard Nixon’s administration that those lands were opened up to us again. So, she said with a laugh, while most people admire Roosevelt and detest Nixon, we feel just the opposite.
The combo of hipster travel writing and political engagement. (Is travel writing always political?) The work to demonstrate you are listening, not proclaiming. Obama’s rise was partly due to his skill as a writer, the acclaim for his self-revelatory memoirs, why shouldn’t Beto’s?
A hazard of this kind of writing, of writing your life in close sync with living it, is becoming a character you’re trying to create on the page, of enacting scenes that you might imagine will become good copy. The danger then becomes manipulating what you really thought, and felt, of trying to pilot the course of your explorations a little too much. That doesn’t work, as writing or life, it’s inauthentic, you get yourself spun around and caught in whirlpools that way.
That’s always a danger when you’re a presidential candidate. Your soul’s at hazard. Somehow it feels extra tough though when your way of getting yourself there is your show of authenticity.
When you claim to report your very thoughts, almost in realtime, you need either an extreme level of mental self-control, or to have your actual self and your presentational self in some very real and genuine and hard-earned harmony. Maybe you need both. The first is terrifying to ponder. The second is rare, difficult both technically and at like a soul level. And scary to practice for any long amount of time, like walking a mountain ledge. If you fall you will suffer, somewhere from being revealed as a phony to breaking mentally and morally.
I know we can do it. I can’t prove it, but I feel it and hear it and see it in the people I meet and talk with. I saw it all over Texas these last two years, I see it every day in El Paso. It’s in Kansas and Oklahoma. Colorado and New Mexico too. It’s not going to be easy to take the decency and kindness we find in our lives and our communities and apply it to our politics, to all the very real challenges we face. And as Tina says, it’s complicated. But a big part of it has got to be just listening to one another, learning each other’s stories, thinking “whatever affects this person, affects me.”
We’re in this together, like it or not. The alternative is to be in this apart, and that would be hell.
A way to defend against inauthenticity when you’re writing/living is to make yourself the fool of your story when you really were a fool, and everyone’s a fool sometimes. But it’s tempting to exaggerate that direction, too. Writers can make themselves look foolish but maybe presidential candidates can’t.
I left the Pueblo heading south toward Chimayo, aiming to be back in El Paso by bedtime. Snow was starting to fall. I thought about all of the places I’d seen over the last week, all of the people I’d met. Communities within communities. Nations within nations.
Would it be terrible to hear, every once in awhile, like:
I could feel horrible diarrhea coming over me coming down the 291. I was so relieved when I saw a Wendy’s in Espanola. But also troubled. I thought, ‘what if they recognize me, racing into the toilet at Wendy’s? Do I have to stop and buy something? What if buying something is when they recognize me? What if they recognize me buying something at Wendy’s and that becomes a thing, like ‘Beto O’Rourke skips local New Mexico food for corporate Frostie’? Well expedience trumped discretion in this case, I made it to the blissfully clean Wendy’s toilet a second ahead of a bottomside avalanche. I left without buying anything. Or apologizing. How could I? Should I have? I’d wonder that, on the road back to El Paso.
Good news bad news kinda thing: nobody at Wendy’s recognized me.
I can hear the Peggy Noonans groaning, that’s just what we need, to hear about candidates’ bowel movements! OK, sure, and Donald J. Trump is the president. Any candidate who wants to get the votes of anyone under forty will need to project authenticity. For anyone truly authentic, that’s not hard. Among the schemers, where will the quest for that end?
Anyway as for Beto good luck to him.
It’s sometimes left out of the clips you see, but I like what Neil Armstrong says right before he steps on the moon.
… the surface appears to be very, very fine grained, as you get close to it. It’s almost like a powder. Down there, it’s very fine.
Today’s top story on Hi Desert Star. Photo is captioned:
article by Kurt Schauppner.
What good is bad news in a crisis? I’m more of an evangelist — a good news guy. Hoping reports of damage to trees and such during shutdown is overblown.
From the local Facebook page, it sounds like there may be some exaggeration or misunderstanding.
Like so many problems, a few assholes are doing most of the damage. Good people do outnumber assholes, is my experience, and by a wide margin.
Back to good news next post!
You’re not gonna get what you were promised.
An angry making idea. Maybe one of the most angry-making ideas possible.
I’ve been wondering if anger about the feeling of a broken promise is a major driver in US politics. We were promised something, and we’re not gonna get it.
But what, exactly?
The United States is the absolute best as promising. All of our greatest politicians were great promisers. Our founding fathers were great promisers.
John Lanchester, writing in LRB:
Napoleon said something interesting: that to understand a person, you must understand what the world looked like when he was twenty. I think there’s a lot in that.
I notice, talking to younger people, people who hit that Napoleonic moment of turning twenty since the crisis, that the idea of capitalism being thought of as morally superior elicits something between an eye roll and a hollow laugh. Their view of capitalism has been formed by austerity, increasing inequality, the impunity and imperviousness of finance and big technology companies, and the widespread spectacle of increasing corporate profits and a rocketing stock market combined with declining real pay and a huge growth in the new phenomenon of in-work poverty. That last is very important. For decades, the basic promise was that if you didn’t work the state would support you, but you would be poor. If you worked, you wouldn’t be. That’s no longer true: most people on benefits are in work too, it’s just that the work doesn’t pay enough to live on. That’s a fundamental breach of what used to be the social contract. So is the fact that the living standards of young people are likely not to be as high as they are for their parents. That idea stings just as much for parents as it does for their children.
But it’s not just politics. If you live in the USA and you turn on your TV, you are being tempted, teased, and promised.
The illusionary promise.
There’s a connection here, I believe, to the world glamour. What is glamour?
The Scottish term may either be from Ancient Greek γραμμάριον (grammárion, “gram”), the weight unit of ingredients used to make magic potions, or an alteration of the English word grammar (“any sort of scholarship, especially occult learning”).
A magic spell. An illusion.
Here is Larry McMurtry talking about glamour, and its lack:
Kids in the midwest only get to see even modest levels of glamour if they happen to be on school trips to one or another of the midwestern cities: K.C., Omaha, St. Louis, the Twin Cities. In some, clearly, this lack of glamour festers. Charles Starkweather, in speaking about his motive for killing all those people, had this to say: “I never ate in a high-class restaurant, I never seen the New York Yankees play, I never been to Los Angeles…”
He was teased with something he could never have. Here is Andrew Sullivan on Sarah Palin:
One of the more amazing episodes in Sarah Palin’s early political life, in fact, bears this out. She popped up in the Anchorage Daily News as “a commercial fisherman from Wasilla” on April 3, 1996. Palin had told her husband she was going to Costco but had sneaked into J.C. Penney in Anchorage to see … one Ivana Trump, who, in the wake of her divorce, was touting her branded perfume. “We want to see Ivana,” Palin told the paper, “because we are so desperate in Alaska for any semblance of glamour and culture.”
Interested in readers’ takes on glamour and glimmers.