On November 28, local time, Warren Buffett's close friend and business partner, Charlie Munger, vice chairman of Berkshire Hathaway's board of directors, died at the age of 99.
Small homework:1. what principle did munger and buffett apply when evaluating potential investments?
a) diversifying their investment portfolio.
b) prioritizing investments they fully understood.
c) investing in high-risk, high-reward ventures.
d) relying on expert opinions for investment decisions.
2. according to munger, what is a valuable practice in improving decision-**a) consistently following industry trends.
b) regularly destroying one's own cherished ideas.
c) always consulting with a team before **decisions.
d) relying on past experiences without seeking new information.
Original without annotation:
the secrets to charlie munger's success
from: the wall street journal
business and financial leaders made frequent pilgrimages to los angeles to hear charlie munger's thoughts as he held court while peering through thick eyeglasses over high, rosy cheekbones.
among the attendees at his weekly “friday lunch club” and periodic dinners were john and patrick collison, founders of the online payment firm stripe; bobby kotick, chief executive of videogame company activision blizzard; pradeep khosla, chancellor of the university of california, san diego; maria pope, chief executive of portland general electric, oregon's largest utility; and howard marks, co-founder of investment firm oaktree capital management.
munger died tuesday at the age of 99. his weekly lunch guests came largely to hear him him talk about the “latticework” of “mental models” that he said helped explain his success and that of berkshire hathaway, where he was vice chair:
invert, always invert'
as a military meteorologist during world war ii, munger didn't ask what would keep pilots safe. instead, he pondered what could kill them, then focused all his effort on trying to predict snow, ice or fog—and ignored everything else.
know your circle of competence
munger often said he and buffett were quick to throw potential investments into a “too-hard” pile. if they couldn't understand it, they just moved on.
keep a list of 'asininities' and **oid them
munger wrote a long essay, “the psychology of human misjudgment,” summarizing 25 types of cognitive errors.
think in multiple dimensions
munger told how, as a lawyer, he more than doubled the appraised value of a client's property by realizing that it wasn't just the acreage, but also its changes in altitude, that made it desirable.
over, under and kapow!'
in artillery training, munger noted, recruits learn to bracket the target by overshooting, undershooting and then hitting it. he estimated investment values the same way, deliberately oversizing, undersizing, then landing in the middle.
embrace your mistakes
i like people admitting they were complete stupid horses' asses,” munger said in 2017. “i know i'll perform better if i rub my nose in my mistakes. this is a wonderful trick to learn.”
destroy your own best-loved ideas'
being good at that is “part of the reason i've been a little more successful than most people,” he told the journal in 2019. “i'm pleased when i can destroy an idea that i've worked very hard on over a long period of time.”
become a learning machine
we all start out stupid and we all h**e a hard time staying sensible, and you h**e to keep working at it,” munger told an audience at the university of redlands in california in 2020. that requires reading constantly—and not just in your own area. “i never liked [specialization],”he said. “i like romping over a whole field.”
Note: See the beginning of this article for the full titleThe Chinese text is the official translation of Wall Street** and is for reference only.
Full text with annotations:
Munger's recipe for success
the secrets to charlie munger's success
from: the wall street journal
business and financial leaders made frequent pilgrimages to los angeles to hear charlie munger's thoughts as he held court while peering through thick eyeglasses over high, rosy cheekbones.
Business and financial leaders often make pilgrimages to Los Angeles to hear Charlie Munger's thoughts. Munger would be surrounded by everyone, with glasses on his high red cheekbones, looking through the thick lenses.
pilgrimage
pilgrimage p lɡr m d 1) means "pilgrimage", which is translated in English as "a special journey made by a pilgrim", e.g. make a pilgrimage go on a pilgrimage to....Go. Pilgrimage.
2) means "pilgrimage;.""a visit to a place that is considered special, where you go to show your respect".