A summary of the top ideas from the book All I Want To Know Is Where I’m Going To Die So I’ll Never Go There: Buffett & Munger – A Study in Simplicity and Uncommon, Common Sense by my friend Peter Bevelin.
If there was one book that compresses the most wisdom of Warren Buffett and Charlie Munger, this would be it.
Let’s dive in.
Wisdom is Prevention
Many things are easier to prevent than cure. It’s much easier to stay in shape than get in shape. It’s much easier to not smoke than to stop smoking. It’s much easier to save money and have a little reserve than to show up at the bank and need it.
“It wasn’t raining when Noah built the ark…and he didn’t even look that smart for 39 days. But there are some things you have to think ahead on, and prevention…is enormously important.” – Buffett
“How much easier it is not to get into it than to get out of it.” – Montaigne
The Fundamental Algorithm of Life: Repeat What Works
If we understand what works and doesn’t, we know what to do.
“It is just that simple. We’ve had enough good sense when something was working well, keep doing it. The fundamental algorithm of life: repeat what works.” – Munger
The Wise of Every Generation Discover the Same Truths
If you only learn from your own experience, you will have a difficult life of mediocrity. If there is one shortcut in life, it is to learn most lessons from the successes and failures of others. In short, master the best of what other people have already figured out.
“People always make the same mistakes.” – Buffett
“Many people have to learn the lessons of life the hard way through really terrible experience. Mark Twain said that a man who picks up a cat by the tail learns something in a way that’s much more effective than any alternative way. But that’s a terrible way to learn things…You shouldn’t have to try it to learn not to pee on an electric fence.” – Munger
“Everything that needs to be said has already been said. But since no one was listening, everything must be said again.” – Andrew Gide
“1 think you can learn a lot from other people. In fact, I think if you learn basically from other people, you don’t have to get too many new ideas on your own. You can just apply the best of what you see.” – Buffett
“I think history’s very helpful. It enables you to keep things in perspective.” – Munger
“What we learn from history is that people don’t learn from history.” – Buffett
Avoid Distractions
The key to success is focused. You do not want to compete with a focused person.
“The difference between successful people and very successful people is that very successful people say ‘no’ to almost everything.” – Buffett
Spend Time Thinking
The best way to improve your thinking ability is to spend time thinking. If you want to do that, I recommend writing it out. Writing gives poor thinking nowhere to hide and forces you to slow down and focus.
“Immersing ourselves in a subject and giving it our full attention offers insights that can’t be gained simply by skimming on the surface.” – How To Think Better
“Concentrating hard on something that is important is…I can’t succeed at all without doing it. I did not succeed in life by intelligence. I succeeded because I have a long attention span” – Munger
“We schedule time to think. Most people schedule themselves like a dentist, and their happiest day is when they can manage to squeeze in one additional ten minute appointment. ” – Munger
“I think you have to have time to think. And it’s so easy to get so busy that you no longer have time to think —and you pay a huge price for that.” – Munger
Position Yourself for Opportunity
At dinner one night with Charlie Munger, he mentioned that one underappreciated aspect of Berkshire’s success was that Warren was rarely forced into a bad decision by circumstances. Thanks to Peter D. Kaufman, I would think of this concept as positioning (and write about it in my book Clear Thinking).
Most people try to predict the future, while Buffett and Munger made their fortune by positioning themselves to take advantage of whatever opportunity comes.
“Have maximum financial flexibility to face both hazards and opportunities.” – Munger
“Our basic principle is that if you want to shoot rare, fast-moving elephants, you should always carry a loaded gun.” – Buffett
“I think history’s very helpful. It enables you to keep things in perspective.” – Munger
Inversion
Much of success comes from simply avoiding common paths to failure.
“When facing a tricky problem or ambitious goal, try inverting. Ask how you’d guarantee failure. The answers may surprise you—and unlock new solutions.” – The Great Mental Models v1
“If my job was to pick a group of 10 stocks in the Dow Jones average that would outperform the average itself, I would probably not start by trying to pick the 10 best. Instead, I would try to pick the 10 or 15 worst performers and take them out of the sample, and work with the residual. It’s an inversion process…Start out with failure, and then engineer its removal.'” – Buffett
“The mental process that really has worked for me my whole life, and I use it all the time, is turning everything into reverse. I figure out what I don’t like instead of figuring out what I like in order to get what I like. I sometimes think straight forward too, of course. But thinking of what I didn’t like and how I can avoid it has just worked wonders for me” – Munger
Avoiding Stupidity is Easier than Seeking Brilliance
Most people spend their time on complicated solutions that attempt to predict the future. This is not the way. The way is to keep things simple, avoid obvious mistakes, and take advantage of opportunities as they come.
“I think part of the popularity of Berkshire Hathaway is that we look like people who have found a trick. It’s not brilliance. It’s just avoiding stupidity.” – Munger
But, wait, isn’t that the same thing?
“You say it is the same thing just stated differently— well, maybe it is the same thing just stated differently. But you understand it better if you go at it the way we do, which is to identify the main stupidities that do bright people in and then organize your patterns for thinking and developments, so you don’t stumble into those stupidities.” – Munger
The Weakest Link Causes the Problem
“One of the things you will find, which is interesting and people don’t think of it enough, with most businesses and with most individuals, life tends to snap you at your weakest link. So it isn’t the strongest link you’re looking for among the individuals in the room. It isn’t even the average strength of the chain. It’s the weakest link that causes the problem.” – Buffett
“Unquestionably, some people have become very rich through the use of borrowed money. However, that’s also been a way to get very poor. When leverage works, it magnifies your gains. Your spouse thinks you’re clever, and your neighbors get envious. But leverage is addictive. Once having profited from its wonders, very few people refreat to more conservative practices.” – Buffett
“Smart men go broke three ways: liquor, ladies, and leverage.” – Munger
Still Curious? If you like this summary, check what I learned reading How to Win Friends and Influence People.