Inversion and The Power of Avoiding Stupidity
Charlie Munger, the business partner of Warren Buffett and Vice Chairman of Berkshire Hathaway, is famous for his quote “All I want to know is where I’m going to die, so I’ll never …
Charlie Munger
Charlie Munger: Energy Independence is a Terribly Stupid Idea
Everyone wants energy independence. Everyone—from politicians and business people to academics—says that our reliance on foreign energy is bad. But have we really thought about this? Does it make …
The Buffett Formula: Going to Bed Smarter Than When You Woke Up
Your mind grows stronger or weaker each day, depending on how you use it. Warren Buffett and Charlie Munger built their extraordinary success on a foundation of continuous learning. They showed …
The Work Required to Have an Opinion
The real cost of an opinion isn’t having it—it’s doing the work required to earn it. This work is what most people avoid. I never allow myself to have an opinion on anything that I …
The Munger Two Step
A simple and easy approach to decision making that prevents us from being manipulated. Understand the forces at play. Understand how your subconscious might be leading you astray. *** While most of us …
Worldly-Wisdom from Charlie Munger
I’m a huge fan of Charlie Munger — Warren Buffett’s right-hand man at Berkshire Hathaway. For those of you unfamiliar with him, listening to his famous talk, The Psychology of Human …
Rethinking the Value of a Business Major
Melissa Korn reporting in the Wall Street Journal: “The biggest complaint,” writes Korn is that “undergraduate degrees focus too much on the nuts and bolts of finance and accounting and don’t …
How Good Gamblers Think
From The Signal And The Noise: Successful gamblers – and successful forecasters of any kind – do not think of the future in terms of no-lose best, unimpeachable theories, and infinitely …
Arguments Are For Learning, Not Winning
Despite his best efforts and long hours, Nobel-Prize winning physicist and professor Carl Wieman grew frustrated by his inability to teach and his students’ failure to learn. When I first taught …
An Ancient Lesson on Taking Responsibility For Decisions
“A decision is responsible,” wrote Charles Frankel, “when the man or group that makes it has to answer for it to those who are directly or indirectly affected by it.” Think …
Insensitivity To Base Rates: An Introduction
In statistics, a base rate refers to the percentage of a population (e.g. grasshoppers, people who live in New York, newborn babies) which have a characteristic. Given a random individual and no …
Charlie Munger: How I Would Teach Business School
Everyone has an opinion on what to teach at business school. However, few are as qualified as the legendary Charlie Munger, the billionaire business partner of Warren Buffett at Berkshire Hathaway. …
Charlie Munger: Bad Morals Drive Out The Good
Charlie Munger on applying Gresham’s Law to lending. The idiotic ideas are all from the social science department and I would put economics in the social sciences department although it has some …
Jeff Bezos on Why People that Are Often Right Change Their Minds Often
Jeff Bezos recently stopped by the office of 37 Signals. After talking product strategy he answered some questions. In his answer to one question he shared some thoughts on people who were …
The Human Mind has a Shut-Off Device
Once you’ve formed a belief, adding exceptions and justifications becomes easier than updating it. Ryan Holiday writes about this in Trust Me, I’m Lying: Once the mind has accepted a …
May The Odds Be Ever in Your Favor
In Mobs, Messiahs, and Markets: Surviving the Public Spectacle in Finance and Politics, Will Bonner writes: …you don’t win by predicting the future; you win by getting the odds right. You …