(Image by Alan Levenson/Corbis)
Investing can’t always be about learning new things, or studying a company. Sometimes we need a break to just laugh. This is that break. Enjoy it.
Charlie Munger.
He’s right up there with Warren Buffett when it comes to value investing. When this guy talks, you should listen. Smart people who know Warren Buffett and Charlie Munger often come away thinking that Buffett lives up to his reputation as a genius. But, They also think that Munger is on a whole other level. In fact, Mohnish Pabrai (who by all accounts, is a genius in his own right) says that Charlie Munger is the smartest person he’s ever met. Munger often comes up with his own theories of how the world works, and has countless mental models running through his head at any given time. This gives him the ability to talk about almost any complex question on the fly, quickly and easily. The guy is also 93 years old, and still has all his mental faculties firing on all cylinders. He really is a very impressive man.
The best part about Charlie, in my opinion, is his candor and his comedy. The guy is hilarious, and a great story teller. He also doesn’t pull his punches. Unlike Buffett, I don’t think Munger is worried about what people think of him. Because of this, he can say what’s on his mind without worrying about the consequences. I’m frankly grateful for it.
I want to share a couple of my favorite stories that Charlie Munger told, in his own words, about himself. These are from the most recent Annual Meeting of the Daily Journal, where Munger sits on the board as the Chairman.
Let me set the stage a little bit for you. He first talks about the Daily Journal business, and where he see’s it going, then he takes questions from the audience. The first questions are related to the Daily Journal, but they quickly turn into investing questions in general. Munger is very generous with his time, and his wisdom. I recommend you watch the video below or read the full transcript, which I’ll post at the bottom. I’ll edit for clarification only. Enjoy! They are hilarious.
Charlie Munger and the Fairer sex
{46:36}
Charlie: Well, I think that family and children is the most meaningful thing most people do with their life. And I’ve been reasonably fortunate…I don’t think I’ve been a perfect husband. I’m lucky to have had as much felicity as I got. And I always needed a certain amount of toleration from the fair sex. I started wrong and I never completely fixed myself. I can tell this group… you come here as a cult to talk to a cult-leader? (Laughter) I want to take you back in history, you’ll see what an inferior person you’re now trusting.
When I was a freshman in Omaha Central High, there was a friend of the family, a girl my age. She had gone off to summer camp the year before, and she met a blonde goddess. A voluptuous 13 year old. And I was a skinny under-developed whatever and so forth. ‘You gotta take my blonde goddess to this dance’ my friend said. And so, I wanted to impress this ‘blonde goddess’ and so, I pretended to smoke, which I didn’t. And she was wearing a net dress, and I set her on fire! (big laughter) But I was quick-whittled and I threw a Coca-Cola all over her (Laughter) and in due time the fire was out. And that’s the last I saw of the blonde goddess. (me, laughing my ass off)
Charlie Munger's luck In high School
{48:26}
Charlie: Then I said, ‘well I’ve gotta make more time with the girls’. And I wanted to get a letter, at Omaha Central High. Of course, I was no good at any sport. So, I went down to the rifle range and learned they gave letters in rifle shooting. And I was so skinny that I could shoot a 100 (bullseye) in the sitting position by sitting cross-legged and putting one elbow on each foot. Try it, you’ll break your neck. But I could shoot a hundred every time. So, I was a good rifle shooter, and they gave me a letter! But I was so skinny and short and underdeveloped, that it went from one armpit to the other. And I walked down the hallway trying to impress the girls and they wouldn’t turn their head. What they said was, ‘how did a skinny little unattractive little runt like that get a letter?’ (Laughter).
And then I had another experience. There was a girl who had a name I still remember, Zibby Brewington. She was a senior, and a very popular senior. And I was a nerd sophomore, and somehow she agreed to go with me to a party in one of the outbuildings at the Omaha Country Club. Perhaps, because she liked one of my friends who was a big strapping fellow. So I took Zibby to this party in my 1934 Ford, and it sleeted and got rainy, and so forth. And I managed to stick the Ford in the mud... and I couldn’t get out of it. And Zibby and I had to walk for several miles through sleet, and mud (Laughter). That was the last I ever saw of Zibby Bruington (big Laughter).
And then my car stayed in the mud, and I neglected to put in antifreeze, and the temperature went way down suddenly, and the block broke! Because it was too expensive to fix the car, I lost my car! And my father wouldn’t buy a new one, because my father said, ‘why should I buy a new car for a guy who's dumb enough not to put antifreeze in it?’ This is the person you’re coming for miles to see! (Big Laughter) And so, I didn’t get a new car…
Charlie The Nerd
{50:43}
Charlie: My life is just one long litany of mistakes and failure. And it went on and on and on. And politics! I ran to be the President of the DSIC in grade school, The Dundee School Improvement Association. I had the most popular boy in school as my campaign manager. I came in second, by miles. I was a total failure in politics. There’s hardly anything I succeeded at. Now, I tell you all this because I know a nerd when I see one. And there are a lot of nerds here. (big Laugh) who can tell stories like mine. And I want to feel it’s not hopeless. Just keep trying.
The Chauffeur
{51:38}
Charlie: Guerin (The Board member next to him) wants me to repeat the story of Max Plank. According to the story, Max Plank, when he won the Nobel Prize was invited to run around Germany giving lectures. And a chauffeur drove him. And after giving the lecture about 20 times, the chauffeur had memorized it. And he said, ‘you know Mr. Plank, it’s so boring, why don’t you just sit in the audience, and I, the chauffeur will give your talk.’ And so the chauffeur got up and gave Max Plank’s talk on physics, and some professor asked some terrible question. And the chauffeur said, ‘Well, he says. I’m surprised that in an advanced city like Munich, people are asking elementary questions like that’. He says ‘ I’m going to ask my chauffeur to answer that!’ (laughter)
Have you heard the one about the plane?
{52:36}
Charlie: While I’m telling jokes I might tell one of my favorite stories about a plane that’s flying over the Mediterranean. The pilot's voice comes on and says, ‘A terrible thing has happened. We’re losing both engines, we’re going to have to land in the Mediterranean.’ And he says, ‘The plane will stay afloat for a very short time, and we’ll be able to open the door just long enough so that everybody can get out. We have to do this in an orderly fashion’. He says ‘Everybody who can swim go to the right wing and stand there. And everybody who can’t swim go to the left wing and just stand there. Those of you on the right wing, you’ll find a little island in the direction of the sun. It’s two miles off. And as the plane goes under, just swim over to the island, you’ll be fine. For those of you on the left wing, I want to thank you for flying Air Italia.” (big laughter).
Munger's advice on if we should do everything he did...
{1:10:00}
Charlie: Generally, specialization is just the way to go for most people. It’s just I have an example of something different. It’s awkward for me because…but I don’t want to encourage people to do it the way I did, because I don’t think it will work for most people. I think the basic ideas of being rational and disciplined and deferring gratification, those will work. But if you want to get rich the way I did, by learning a little bit about a hell of a lot, I don’t recommend it to others.
Now I’ve got a story there that I tell…
A young man comes to see Mozart, and says, “I want to compose symphonies.” And Mozart says, “You’re too young to compose symphonies.” He’s 20 years old and the man says, “But you were composing symphonies when you were 10 years old.” And Mozart says, “Yeah but I wasn’t running around asking other people how to do it.” (Laughter).
I don’t think I’m a good example to the young. I don’t want to encourage people to follow my particular path. I like all the general precepts, but I would not…if you’re a proctologist, and I wanted a Proctologist. I do not want a proctologist who knows Schopenhauer, or astrophysics, you know? I want a man whose specialized. That’s where the market is. And you should never forget that. On the other hand, I don’t think you’d have much of a life if all you did was proctology. (laughter)
Conclusion
I hope you enjoyed those as much as I did. As you can tell, Charlie is hilarious, but he’s also an excellent teacher. So, I highly recommend you watch the video below, and try to get your hands on everything he has to say. He’s lived a long and very successful life, and I think the best way to learn, is to learn from someone who’s already done what you’re trying to do, and has done so, successfully.
Thanks for reading!
We’ll talk again soon.
The video
If you don’t have as much time, you can watch the video at 1.5x speed by clicking the gear-box (
)then click speed (1.5). Also, if you only want to watch anything about the Daily Journal, the Q&A starts at {16:50} the general questions begin at {28:22).
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