Munger, by Theme

“Show me the incentive and I will show you the outcome.”

“Never, ever, think about something else when you should be thinking about the power of incentives.”

“Perhaps the most important rule in management is, 'Get the incentives right.'”

From the FedEx night-shift example in the Misjudgment essay; wording varies slightly across editions.

“Well I think I've been in the top 5% of my age cohort all my life in understanding the power of incentives, and all my life I've underestimated it. And never a year passes, but I get some surprise that pushes my limit a little farther.”

First given as a 1995 talk; the canonical wording is the expanded Almanack version.

“We want to win the bass fishing tour, whereas pension fund consultants sell tackle. We're not interested in selling tackle, we're interested in catching bass.”

His doers-vs-sellers point (he framed it as 'Warren and I').

“I have avoided all my life compensation consultants. I hardly can find the words to express my contempt.”

“The people who design easily gameable systems belong in the lowest circle of hell.”

“The iron rule of nature is: you get what you reward for. If you want ants to come, you put sugar on the floor.”

Via Griffin's book; the occasion isn't pinned to a transcript.

“I asked him, 'My God, they're purple and green. Do fish really take these lures?' And he said, 'Mister, I don't sell to fish.'”

A fishing-tackle joke he retold; the punchline is the salesman's, on incentives.

“Finally, somebody got the idea to pay all these people not so much an hour, but so much a shift — and when it's all done, they can all go home. Well, their problems cleared up overnight.”

His Federal Express night-sort example — pay by the shift, not the hour.

“In a bureaucracy, you think the work is done when it goes out of your in-basket into somebody else's in-basket. But, of course, it isn't. It's not done until AT&T delivers what it's supposed to deliver.”

“It's what I call fee-driven buying, much of it, where people are buying things to get the fees.”

On the private-equity / venture-capital fee culture.

“Unfortunately, Reason-Respecting Tendency is so strong that even a person's giving of meaningless or incorrect reasons will increase compliance with his orders and requests.”

His Reason-Respecting Tendency — even meaningless reasons increase compliance.

“Invert, always invert.”

Munger repeatedly attributed the maxim to Jacobi.

“All I want to know is where I'm going to die, so I'll never go there.”

A favorite Munger formulation of inversion; he often presented it as a borrowed country-saying. It became the title of Peter Bevelin's 2016 book.

“Darwin's result was due in large measure to his working method, which violated all my rules for misery and particularly emphasized a backward twist in that he always gave priority attention to evidence tending to disconfirm whatever cherished and hard-won theory he already had.”

Munger characterizing Darwin's habit of giving priority to disconfirming evidence — not a Darwin quote.

“I constantly see people rise in life who are not the smartest, sometimes not even the most diligent, but they are learning machines. They go to bed every night a little wiser than they were when they got up, and boy, does that help, particularly when you have a long run ahead of you.”

“Spend each day trying to be a little wiser than you were when you woke up.”

“You've got to have models in your head, and you've got to array your experience — both vicarious and direct — on this latticework of models.”

“You may say, 'My God, this is already getting way too tough.' But, fortunately, it isn't that tough — because 80 or 90 important models will carry about 90% of the freight in making you a worldly-wise person.”

“I have a name for people who went to the extreme efficient market theory — which is 'bonkers.' It was an intellectually consistent theory that enabled them to do pretty mathematics. So I understand its seductiveness to people with large mathematical gifts. It just had a difficulty in that the fundamental assumption did not tie properly to reality.”

“I think a life properly lived is just learn, learn, learn all the time.”

Widely repeated; we could not trace it to a specific verified interview.

“You must know the big ideas in the big disciplines and use them routinely — all of them, not just a few.”

From the 1996 Stanford talk in the Almanack — not the 1994 USC speech it is often attributed to.

“I did not succeed in life by intelligence. I succeeded because I have a long attention span.”

Reliably reported from 2015 Daily Journal meeting notes rather than an official transcript.

“People calculate too much and think too little.”

Genuinely his and stably worded; the exact meeting and year are not pinned.

“The best thing a human being can do is to help another human being know more.”

Consistently attributed to the Almanack; the original occasion is not pinned.

“The idea of rubbing one's nose on purpose is very good for civilization.”

Prompted by Johnson & Johnson's habit of post-morteming its own acquisitions — 'rubbing one's nose' means confronting your own decisions. The '[in your own mistakes]' often added online is not in his actual words.

“My second prescription for misery is to learn everything you possibly can from your own personal experience, minimizing what you learn vicariously from the good and bad experience of others, living and dead.”

Delivered ironically — an inverted 'prescription for misery.' The real point is the opposite: do learn vicariously from others, living and dead.

“Any year that passes in which you don't destroy one of your best loved ideas is a wasted year.”

His own formulation of a Darwin-style habit of destroying cherished ideas.

“I am very good at learning things from dead people. That's what everybody should learn.”

A 2023 restatement of his lifelong 'learn from the eminent dead' theme.

“You can't really know anything if you just remember isolated facts and try and bang 'em back. If the facts don't hang together on a latticework of theory, you don't have them in a usable form.”

“I believe in the discipline of mastering the best that other people have ever figured out. I don't believe in just sitting down and trying to dream it all up yourself. Nobody's that smart.”

“I came to the psychology of human misjudgment almost against my will. I rejected it until I realized that my attitude was costing me a lot of money, and reduced my ability to help everything I loved.”

From Bevelin's 'Seeking Wisdom' (which Munger read and authorized); wording approximate.

“If you skillfully follow the multidisciplinary path, you will never wish to come back. It would be like cutting off your hands.”

“If there's any secret to Berkshire, it's the fact that we're pretty good at ignorance removal. And the nice thing about that is we have a lot of ignorance left to remove.”

Right after: 'We were pretty damn stupid when we bought See's — just barely smart enough to buy it.'

“We're too soon old and too late smart. That's everybody's problem, and the reason we're too late smart is the stupid ideas we already have, we can't get rid of.”

He credits 'too soon old and too late smart' to an old German saying; the gloss is his own.

“It's very hard to teach business based on opportunity cost. It's much easier to teach the capital-asset pricing model, where you could just punch in numbers and out come numbers. And therefore, people teach what is easy to teach, instead of what is correct to teach.”

“Without numerical fluency, in the part of life most of us inhabit, you are like a one-legged man in an ass-kicking contest.”

“So if you want to be a good thinker, you must develop a mind that can jump the jurisdictional boundaries. You don't have to know it all. Just take in the best big ideas from all these disciplines. And it's not that hard to do.”

“I want economics to pick up the basic ethos of hard science, the full attribution habit, but not the craving for an unattainable precision that comes from physics envy.”

“It's been amazing that both corporate finance and investment management courses, as taught in the major universities — we would argue it's at least 50 percent twaddle, and yet these people have very high IQs.”

“The system that nature uses to get smart is kind of unpleasant for the people who are losing.”

On evolution by elimination.

“The game of life is a game of everlasting learning. At least it is if you want to win.”

“Walton invented practically nothing. But he copied everything anybody else ever did that was smart — and he did it with more fanaticism and better employee manipulation. So he just blew right by them all.”

“The one thing that we did that's worked best of all is we were always dissatisfied with what we already knew and we always wanted to know more. … It's what we kept learning that made it work, and I don't think that will ever stop.”

Two non-adjacent sentences joined.

“Envy, resentment, revenge, and self-pity are disastrous modes of thought. Self-pity gets pretty close to paranoia, and paranoia is one of the very hardest things to reverse. You do not want to drift into self-pity.”

“A great character and the right temperament will beat a high IQ that lacks them, almost every time.”

Captures Munger's repeated 'temperament over IQ' point, but this exact wording is a paraphrase, not a verified verbatim quote.

“Life will have terrible blows in it, horrible blows, unfair blows. It doesn't matter. Some people recover and others don't. And there I think the attitude of Epictetus is the best. He thought that every missed chance in life was an opportunity to behave well, every missed chance in life was an opportunity to learn something.”

“Generally speaking, envy, resentment, revenge, and self-pity are disastrous modes of thought. Every time you find yourself drifting into self-pity, I don't care what the cause, your child could be dying of cancer, self-pity is not going to improve the situation.”

“A lot of people with high IQs are terrible investors because they've got terrible temperaments. And that is why we say that having a certain kind of temperament is more important than brains. You need to keep raw irrational emotion under control.”

“To everyone who finds the current investment climate hard, difficult, and somewhat confusing, I would say, welcome to adult life.”

He also used 'welcome to adult life' at the 2019 meeting; this is the 2022 one.

“It's amazing how difficult these very intelligent people find it ever to change their minds no matter how wrong they are.”

Phrasing approximate — independent notes from the same meeting render it a little differently.

“My third prescription for misery is to go down and stay down when you get your first, second, third severe reverse in the battle of life.”

Delivered ironically (a 'prescription for misery'); the real advice is resilience after your first setbacks.

“Resentment has always worked for me exactly as it worked for Carson. I cannot recommend it highly enough to you if you desire misery.”

Sardonic — part of his inverted 'prescriptions for misery,' expanding a Johnny Carson commencement bit. The real counsel is to drop resentment.

“In fact, you can argue that if you're not willing to react with equanimity to a market price decline of 50% two or three times a century, you're not fit to be a common shareholder, and you deserve the mediocre result you're going to get compared to the people who do have the temperament, who can be more philosophical about these market fluctuations.”

From his BBC interview; the widely-circulated short version drops the closing clause restored here.

“The nerds who were patient and rational eventually did well — those who lived within their income, worked at being sensible, and when they saw an opportunity grabbed it very fiercely. So if you're not a nerd, I can't help you.”

Condensed from one continuous answer — no words changed.

“The iron rule of life is everybody struggles.”

“If you soldier through, you can get through almost anything. … If you have to walk through the streets, crying for a few hours a day as part of the soldiering through — go ahead and cry away. But you have to — you can't quit. You can cry alright, but you can't quit.”

Condensed from the CNBC transcript (one elided clause); 'alright' per CNBC's rendering.

“We would never trade money for misery.”

“Conduct your life so you can handle a 50% decline with aplomb and grace. Don't try to avoid it. It will come. In fact, if it doesn't come, I would say you're not being aggressive enough.”

On enduring market drawdowns; he called his own 1973–74 ~50% decline 'a part of manhood.'

“People who cannot be alone with their own thoughts for a long time are terrible candidates to become successful investors.”

“I also think that one should recognize reality even when one doesn't like it, indeed, especially when one doesn't like it.”

“You don't want to make important decisions in anger. You want to display as much ruthlessness as your duty requires, and you do not want to add one single iota because you're angry.”

On how Berkshire handled the Sokol/Lubrizol affair; he credited Tom Murphy — 'you can always tell a man to go to hell tomorrow.'

“If you ask what one frame of mind is likely to do an individual the most damage — to his happiness, to his contribution to others — the answer would be some sort of paranoid self-pity. Couldn't imagine a more destructive frame of mind. Now you have whole departments that want everyone to feel a victim. And you pay money to send your children to places where this is what they teach them.”

Lightly compressed from a longer answer on academic victimhood culture; wording approximate.

“It's very counterproductive for an individual to feel like a victim, even if he is. To have a deep feeling that it's all somebody else's fault is a very counterproductive way to think.”

“Warren and I aren't prodigies. We can't play chess blindfolded or be concert pianists. But the results are prodigious, because we have a temperamental advantage that more than compensates for a lack of IQ points.”

“The world promoted me to the place where I'm stressed. And if you're lucky, that will happen to you. That's where you want to end up is stressed. You want to have your full powers called for.”

On wanting your full powers called for; spoken grammar preserved.

“Good investing requires a weird combination of patience and aggression — and not many people have it.”

“I'm 76 years of age. I've been through a number of down periods. If you live a long time, you're going to be out of investment fashion some of the time.”

From Lowe's biography; on enduring a down period.

“It's not supposed to be easy. Anyone who finds it easy is stupid.”

From a private conversation, preserved by Howard Marks; no public occasion.

“Why shouldn't it be hard to make money? Why should it be easy?”

“I think great investors to some extent are like great chess players — they are almost born to be investors.”

“I think speed is overestimated. I had a roommate at Caltech who had a very distinguished mind, and I could do problems faster than he could, but he never made a mistake, and I did. So I wouldn't be too discouraged if you have to go a little slower. What the hell difference does it make?”

To a questioner worried about reading slowly.

“The general idea that a person should just shout disapproval all day long of everything he disapproves of is very suspect. In the world in which we inhabit, people accomplish more if they pick their spots for public disapproval. If we all did that, we wouldn't be able to hear each other.”

“I don't think the right way to handle every tough guy that's fighting against you is with unlimited hostility. There are times I think when they ought to be killed with kindness. Even if they're wrong.”

On handling adversaries; the immediate trigger was U.S.–Russia relations.

“I am very good at recognizing unfair advantages. And I got unfair advantages in old age, the way I got unfair advantages in not old age, and when they came, I just grabbed them. Boom, boom, boom.”

From the interview CNBC released the day he died.

“My advice would be, if you have a fixable disadvantage, remove it. If it's unfixable, learn to live without it. What else can you do? You fix what can be fixed, and what can't be fixed, you endure.”

“I do think that there's a lot to be said for developing a temperament that can own securities without fretting. The fretful disposition is an enemy of long-term performance.”

Smoothed past a verbal false-start; otherwise verbatim.

“I developed more courage after I learned I could handle hardship. So maybe you should get your feet wet with a little more failure.”

Buffett's reply: 'I've certainly followed that advice.'

“It's not that we're so smart. It's that we stayed sane. Because a lot of what goes on is absolutely nuts.”

His summary of Berkshire's real edge.

“I would never buy it, and I would never sell it short.”

On Tesla; he then quoted Howard Ahmanson on Elon — 'never underestimate the man who overestimates himself.'

“The right way to go through life is to take it as it comes and to do the best you can. And if you live to an old age, you'll get your share.”

“Man is the prisoner of his talents.”

From Whitney Tilson's notes.

“It is not greed that drives the world, but envy.”

Genuinely associated with Munger, but he often credited the observation to Warren Buffett.

“Envy is a really stupid sin because it's the only one you could never possibly have any fun at. There's a lot of pain and no fun. Why would you want to get on that trolley?”

“The world is not driven by greed. It's driven by envy.”

A shorter variant of the 'envy, not greed' idea; Munger frequently credited Buffett. Treat wording as approximate.

“They were having trouble with envy a long time ago. And it's a perfectly terrible thing to do, and how much fun can you have being envious?”

On 'thou shalt not covet'; he added envy is 'the one sin there's no fun in.'

“I have conquered envy in my own life. I don't envy anybody. I don't give a damn what somebody else has.”

“If you're comfortably rich and someone else is getting richer faster than you by, for example, investing in risky stocks, so what?! Someone will always be getting richer faster than you. This is not a tragedy.”

From Tilson's notes.

“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.”

“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent. There must be some wisdom in the folk saying: 'It's the strong swimmers who drown.'”

Extended form as printed in the Almanack; the first sentence is the widely quoted core.

“There are only three ways a smart person can go broke: liquor, ladies, and leverage.”

Buffett has repeatedly credited this line to Munger; no single primary recording pins the exact occasion.

“It's very difficult to invest money well, and I think it's all but impossible to do it time after time after time in venture capital. Some of the deals get so hot, and you have to decide so quickly, that you're all just sort of gambling.”

“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent. People are trying to be smart — all I am trying to do is not to be idiotic, but it's harder than most people think.”

“We try more to profit from always remembering the obvious than from grasping the esoteric.”

From Munger's Wesco chairman's letter; it immediately precedes the famous 'consistently not stupid' line.

“Mimicking the herd invites regression to the mean (merely average performance).”

“If I had to name one factor that dominates human bad decisions, it would be what I call denial. If the truth is unpleasant enough, their mind plays tricks on them and they think it isn't really happening.”

Lightly cleaned of a spoken filler; from his 2023 answer on which biases do the most damage.

“A lot of success in life and business comes from knowing what you want to avoid: early death, a bad marriage, etc.”

From Whitney Tilson's contemporaneous notes (part paraphrase), so the phrasing is approximate.

“Personally, I've gotten so that I now use a kind of two-track analysis. First, what are the factors that really govern the interests involved, rationally considered? And second, what are the subconscious influences where the brain at a subconscious level is automatically doing these things — which by and large are useful, but which often misfunction.”

“Why would you risk what you have and need in order to get what you don't have and don't need? Really stupid.”

On margin and leverage — he prefaced it 'when you're already rich, it's insane.'

“Avoid crazy at all costs. Crazy is way more common than you think. It's easy to slip into crazy. Just avoid it, avoid it, avoid it.”

“I avoided the standard ways of failing. … My game in life was always to avoid all standard ways of failing. You teach me the wrong way to play poker and I will avoid it.”

One ellipsis replaces a connective; no other words changed.

“Do not live your life in such a fashion that a bad day can kill you.”

“Around here I would say that if our predictions have been a little better than other people's, it's because we tried to make fewer of them.”

“We've got people who know nothing about stocks being advised by stockbrokers who know even less.”

“One nice thing about doing something dumb, if you're smart, is that you won't do it again.”

“Addiction can happen to any of us, through a subtle process where the bonds of degradation are too light to be felt until they are too strong to be broken.”

His own variant of the 'chains of habit, too light to be felt until too strong to be broken' proverb (after Samuel Johnson).

“If you just have one or two [models] that you're using, the nature of human psychology is such that you'll torture reality so that it fits your models, or at least you'll think it does.”

'[models]' is inserted for clarity; his verbatim phrasing is 'one or two that you're using.'

“I thought of my favorite business analogy—the mouse who says, 'Let me out of the trap, I've decided I don't want the cheese.' There are a million business traps. You can get sloppy, you can get alcoholic, you can get megalomania, you can not understand your own limitations. There are a million ways to gum it up.”

His 'mouse and the trap' analogy for the many ways to ruin a business.

“You call a man the Chief Risk Officer, but often he is functioning as a guy that makes you feel good while you do dumb things.”

On the big banks' risk management after the 2008 crisis.

“If you have some easily removable ignorance and keep it, it's dishonorable. I don't think it's just a mistake or a lack of diligence. I think it's dishonorable to stay stupider than you have to be, and so that's my ethos.”

He called Berkshire 'a temple of rationality.'

“Modern life creates successful bureaucracy, and successful bureaucracy breeds failure and stupidity. How can it be otherwise? That's the big tension of modern life.”

He called it 'the great tragedy of modern life.'

“Think of how refreshing a board of directors meeting would be if they sat down, 'And now we'll spend three hours examining all our stupid blunders and how much we've blown.'”

“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. If there's a big whirlpool in the river, I stay a long way away from it.”

Two passages on the same point joined; wording verbatim, contiguity approximate.

“Other people are trying to be smart; all I'm trying to be is non-idiotic.”

“It's really crazy if you're very comfortable and secure to leverage. The incremental value of getting a little extra return is not that great.”

“When people use the word 'common sense,' what they mean is uncommon sense. Because the standard human condition is ignorance and stupidity.”

“In engineering, people have a big margin of safety. But in the financial world, people don't give a damn about safety. They let it balloon and balloon and balloon. It's aided by false accounting.”

From Tilson's 2003 notes (near-verbatim, not an official transcript).

“People are always saying to Berkshire, 'Why don't you write a lot more volume in relation to capital? Everyone else is doing it.' … But then somebody else comes in and asks, 'Why did everybody get killed last year but you?' Maybe the questions are related. To finish first you have to first finish.”

He applies the old racing maxim 'to finish first you have to first finish.'

“Smart, hard-working people aren't exempted from professional disasters from overconfidence. Often, they just go aground in the more difficult voyages they choose, relying on their self-appraisals that they have superior talents and methods.”

“We've had enough good sense, when something was working very well, to keep doing it. I'd say we're demonstrating what might be called the fundamental algorithm of life — repeat what works.”

He credited 'repeat what works' to Lee Kuan Yew.

“We recognized early on that very smart people do very dumb things, and we wanted to know why and who, so we could avoid them.”

Year/occasion not pinned to a transcript.

“You don't have to have perfect wisdom to get very rich. All you've got to do is have slightly more than other people, on average, over a long time.”

“What I needed to get ahead was to compete against idiots, and luckily there's a large supply.”

On finding your circle of competence; excerpted mid-sentence.

“Anytime somebody offers you a tax shelter from here on in life, my advice would be don't buy it. In fact, any time anybody offers you anything with a big commission and a 200-page prospectus, don't buy it.”

He calls this 'Munger's Rule.'

“In terms of business mistakes that I've seen over a long lifetime, I would say that trying to minimize taxes too much is one of the great standard causes of really dumb mistakes. Warren and I personally don't drill oil wells. We pay our taxes.”

“I don't think I use much physics in solving my investment problems, but it occasionally helps me. Occasionally, some damned fool will suggest something that violates the laws of physics, and I always turn off my mind the minute I realize the poor bastard doesn't know any physics.”

“One should stay far away from any conduct at all likely to drift into chemical dependency. Even a small chance of suffering so great a damage should be avoided.”

“The reality is too painful to bear, so one distorts the facts until they become bearable.”

On psychological denial.

“Misjudgment is like sunshine, it will always be part of the world.”

From Boodell's notes (recollections, corroborated).

“If you buy a business just because it's undervalued, then you have to worry about selling it when it reaches its intrinsic value. That's hard. But if you can buy a few great companies, then you can sit on your ass. That's a good thing.”

Munger's 'sit on your ass investing' concept. The catchphrase is verifiably his (reaffirmed in his 2023 CNBC interview); this longer wording is the commonly circulated version.

“It takes character to sit there with all that cash and do nothing. I didn't get to where I am by going after mediocre opportunities.”

“The big money is not in the buying and the selling, but in the waiting.”

Ubiquitously credited to Munger and consistent with his views, but no primary source confirms the exact words. The idea traces to Jesse Livermore ('It was always my sitting,' Reminiscences of a Stock Operator, 1923). Present as 'attributed,' not as a verified Munger original.

“I learned this trick early. They've done that experiment with the two marshmallows with the little kids... The little kids who were good at deferring the marshmallows are also the people who succeed in life. It's all deferred gratification.”

“The fact that it's so awful to grind through means that the people who want easy gratification don't come in. If it seems slow and painful to you, we kind of like it that way.”

“There are huge advantages for an individual to get into a position where you make a few great investments and just sit back and wait: You're paying less to brokers. You're listening to less nonsense.”

“If you took our top fifteen decisions out, we'd have a pretty average record. It wasn't hyperactivity, but a hell of a lot of patience.”

Captures his concentration philosophy; the exact dated occasion is not pinned.

“Watchful waiting is painful if you're action prone. Fortunately, I don't believe in being too action prone in life.”

Approximate wording, from Outstanding Investor Digest's published excerpts of the 2003 Wesco Q&A.

“It's kind of a snare and a delusion to outguess macroeconomic cycles. Very few people do it successfully and some of them do it by accident. When the game is that tough, why not adopt the other system of swimming as competently as you can?”

Lightly condensed from one continuous passage — no words changed.

“It's amazing how intelligent it is to spend some time just sitting. A lot of people are way too active.”

“Maybe five or six times in a lifetime you get a chance to do it. People who do it two or three times early all go broke because they think it's easy. In fact, it's very hard and rare.”

Wording lightly normalized from a spoken passage.

“I think the record shows the advantage of a peculiar mind-set — not seeking action for its own sake, but instead combining extreme patience with extreme decisiveness.”

From Lowe's biography.

“It takes a very patient person to get rich in insurance. It takes forever to get anything, and it takes forever to push anybody aside. It's very hard to make money.”

“I think this stuff is utterly precious. I feel it's like the topsoil of Iowa. We don't want it to go away too fast.”

On opposing the rapid export of U.S. oil and gas.

“Take a simple idea and take it seriously.”

One of his most-quoted maxims; widely cited from his talks, exact occasion not pinned to a single recording.

“We have a passion for keeping things simple.”

“To the man with only a hammer, every problem looks pretty much like a nail.”

Munger's framing of why a single-discipline mind misjudges; he used it to argue for a latticework of mental models.

“A lot of institutions get into terrible trouble trying to be omniscient. They think if they create 27 departments and require each to be omniscient in its field, that it makes the whole collective enterprise omniscient across all 27 fields. We regard that as madness.”

“I've done so well in life just by using organized common sense that I never wanted to get into these fields like artificial intelligence. You can walk along the shores and pick up boulders of gold, as long as the boulders keep being found and picked up, I don't want to go into placer mining, sifting vast amounts of data for some edge.”

Wording lightly reconstructed (the transcript marks one word [inaudible]); on why he avoided chasing AI / data-mining for an edge.

“There isn't one novel thought in all of how Berkshire is run. It's all about what Peter [Kaufman] calls 'exploiting unrecognized simplicities.'”

He credits the phrase to Peter Kaufman, editor of Poor Charlie's Almanack.

“I can't think of a single example in my whole life where keeping it simple has worked against us. We made mistakes, but they weren't because we kept it simple.”

“Warren talks about these discounted cash flows. I've never seen him do one.”

Griffin uses it to illustrate Munger's distaste for false precision.

“Lee Kuan Yew had the best record as a nation builder. If you're willing to count small nations, he had probably the best record that ever existed in the history of the world… The mantra he said over and over again was: figure out what works and do it.”

Quoting Singapore's Lee Kuan Yew, whom Munger admired as a nation-builder.

“I love everything about Costco. I'm a total addict, and I'm never going to sell a share.”

“I wish everything else in America was working as well as Costco does. Think what a blessing that would be for us all.”

“Costco does one thing right after another. They have figured out the whole damn process. It's a perfect culture, and I love everything about it.”

“I think it's rat poison... So it's more expensive rat poison.”

Munger called bitcoin 'rat poison' in 2013 (BTC ~$150) and 'more expensive rat poison' by 2018. Distinct from Warren Buffett's separate 'rat poison squared' line.

“I think I should say modestly that I think the whole damn development is disgusting and contrary to the interests of civilization.”

“It's like someone else is trading turds and you decide you can't be left out.”

“Bitcoin is noxious poison.”

Distinct from his earlier 'rat poison' bitcoin line (2013); said at the 2018 meeting.

“Of course, I hate the bitcoin success. And I don't welcome a currency that's useful to kidnappers and extortionists, and so forth. Nor do I like just shuffling out of extra billions and billions and billions of dollars to somebody who just invented a new financial product out of thin air.”

From the same 2021 answer as his 'disgusting… contrary to the interests of civilization' line — a distinct sentence.

“I admire the Chinese for banning it. I think they were right, and we've been wrong to allow it.”

“Bitcoin reminds me of what Oscar Wilde said about fox hunting. He said it was the pursuit of the uneatable by the unspeakable.”

He applies to Bitcoin a line he credits to Oscar Wilde (inverting Wilde's original).

“Berkshire Hathaway could not have been built to its present status without Charlie's inspiration, wisdom and participation.”

This is Buffett's tribute TO Munger, not Munger's own words. Included to document the partnership.

“If Charlie and I disagree, usually we end up by deciding not to do anything, which is fine. There are all kinds of things in this world we don't have an opinion on.”

Buffett's characterization of how he and Munger work together; documents the partnership.

“Charlie shoved me in the direction of not just buying bargains, as Ben Graham had taught me. This was the real impact he had on me. It took a powerful force to move me on from Graham's limiting views. It was the power of Charlie's mind.”

Buffett crediting Munger with moving him from 'cigar-butt' investing toward quality businesses.

“A partner ideally is capable of working alone. You can be a dominant partner, subordinate partner, or an always collaborative equal partner. I've done all three.”

Munger's own words on partnership — the archive's other partnership quotes are Buffett speaking about him.

“Somebody asked us once what was the best investment we ever made, and I answered the fee we paid to the executive recruiter to find Ajit Jain.”

“You can't form a business partnership with your frivolous, drunken brother-in-law. You have to make your partnerships with somebody else.”

His metaphor for the eurozone admitting Greece and Portugal.

“I hardly know anybody who's done very well in life in terms of cognition that doesn't have somebody trusted to talk to. Einstein would not have been able to do what he did without people to talk to. Didn't need many, but he needed some.”

From a three-way interview with Buffett and Gates.

“If you get Warren Buffett for 40 years and the bastard finally dies on you, you don't really have a right to complain.”

From Tilson's notes.

“I want two countries with a lot of hydrogen bombs to be trading happily with one another instead of posturing the way we are with Russia.”

On U.S.–China trade.

“Why should a great civilization like ours care if a new civilization rises? We should make a friend out of the new civilization and keep trying to have win-win transactions.”

On U.S.–China relations.

“In my whole life, I have known no wise people (over a broad subject matter area) who didn't read all the time — none, zero.”

“My children laugh at me. They think I'm a book with a couple of legs sticking out.”

Widely repeated self-description; exact occasion not pinned to a single primary recording.

“We both insist on a lot of time being available almost every day to just sit and think. That is very uncommon in American business. We read and think. So Warren and I do more reading and thinking and less doing than most people in business.”

“There is no reason to look only for living models. The eminent dead are, in the nature of things, some of the best models around. If a model is all you want, you're really better off not limiting yourself to the living. Some of the very best models have been dead for a long time.”

“I've never taken notes; I never kept notes when I was a student. I would just read what I pleased when I felt like reading it, and I think what I think when I feel like thinking it. That's my system.”

“Knowing what you don't know is more useful than being brilliant.”

Captures his oft-repeated stance on the limits of competence; widely cited, exact occasion not pinned to one recording.

“We have three baskets for investing: yes, no, and too tough to understand.”

Frequently quoted from the Berkshire and Wesco meetings; wording varies.

“If something is too hard, we move on to something else. What could be simpler than that?”

“One skill is knowing the edge of your own competency. It's not a competency if you don't know the edge of it. And Warren and I are better at tuning out the standard stupidities. We've left a lot of more talented and diligent people in the dust, just by working hard at eliminating standard error.”

“Whatever you think you know about technology, I think I know less.”

“Our game is to find a few intelligent things to do. It's not to stay up on every damn thing that's going on in the whole world.”

“Microeconomics is what we do, and macroeconomics is what we put up with.”

“Well, I think the great strategy, for the great mass of humanity, is to specialize — nobody wants to go to a doctor that's half-proctologist and half-dentist.”

He noted that he and Buffett deliberately did NOT specialize.

“I regard Alibaba as one of the worst mistakes I ever made. I got charmed with the idea of their position in the Chinese internet, and I didn't stop to realize that it's still a goddamn retailer.”

“Confucius said that real knowledge is knowing the extent of one's ignorance. … Think of somebody who's been a professional tightrope walker for twenty years — and has survived. He couldn't survive as a tightrope walker for twenty years unless he knows exactly what he knows and what he doesn't know. … The survivors know.”

He credits the opening line to Confucius; the tightrope image is his own. Condensed, with elisions marked.

“If you think your IQ is 160 and it's 150, you're a disaster. Much better a guy with a 130 that's operating well within himself.”

“At any given time, what we already knew was not going to be enough to take us to the next step. That's what makes it difficult. Think of all the people you know that have tried to take one extra step and have fallen off a cliff.”

On over-reaching beyond what you know.

“The wise ones bet heavily when the world offers them that opportunity. They bet big when they have the odds. And the rest of the time, they don't. It's just that simple.”

“You're looking for a mispriced gamble. That's what investing is. And you have to know enough to know whether the gamble is mispriced. That's value investing.”

“A few major opportunities, clearly recognizable as such, will usually come to one who continuously searches and waits, with a curious mind that loves diagnosis involving multiple variables.”

“Capitalism should expect to get a few big winners by accident.”

“The problem around here at the moment is that we have more money than we have brilliant ideas. But there are worse problems than that.”

“Bridge players know about opportunity cost. Poker players know about opportunity cost. But MBA faculty members and other important people, they hardly know their ass from a plate of hot squash.”

“There's a model that I call "surfing" — when a surfer gets up and catches the wave and just stays there, he can go a long, long time. But if he gets off the wave, he becomes mired in shallows.”

“The first rule of fishing is fish where the fish are, and the second rule of fishing is don't forget rule number one. And in investing it's the same thing. Some places have lots of fish and you don't have to be that good a fisherman to do pretty well. Other places are so heavily fished that no matter how good a fisherman you are, you aren't going to do very well.”

He frames 'fish where the fish are' as an old fishing rule; the over-fished-waters application to investing is his.

“It's like an Easter egg hunt with too many hunters and not enough eggs. So you value investors, look around the room. There are a lot of hunters. So if you're having trouble, please join the club.”

On a picked-over value-investing environment.

“If a thing is despised enough and ignored enough, you can run a Geiger counter over it and find a few things that make it go click.”

On a deep-value investor finding bargains in despised, ignored markets.

“I think life is a whole series of opportunity costs. You know, you've got to marry the best person who is convenient to find who will have you. Investment is much the same sort of a process.”

“American investors are missing China. It just looks too hard, sitting in Omaha, to outsmart the Chinese market. But I think you're absolutely right. It's where they should be looking.”

Agreeing with a shareholder who argued Chinese stocks were the better value.

“The trick in life is, when you get the one, or two, or three that is your fair allotment for a life, you've got to do something about it.”

The moral of his 1962 Al Marshall oil-royalty windfall — 'the trouble is it only happened once.'

“The most extreme mistakes in Berkshire's history have been mistakes of omission. We saw it, but didn't act on it. They're huge mistakes — we've lost billions. And we keep doing it.”

On Berkshire's biggest errors — the things it saw but didn't buy.

“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.”

On why his generation's investing records are hard to repeat.

“You don't need all this damn diversification. You're lucky if you've got four good assets. … If you're trying to do better than average, you're lucky if you have four things to buy. And to ask for 20 is really asking for egg in your beer.”

Condensed from a longer answer (the ellipsis marks an omitted jab at finance professors); 'egg in your beer' is an old idiom for wanting more than you deserve.

“In the United States, a person or institution with almost all wealth invested, long term, in just three fine domestic corporations is securely rich.”

“One of the inane things [that gets] taught in modern university education is that a vast diversification is absolutely mandatory in investing in common stocks. That is an insane idea. It's not that easy to have a vast plethora of good opportunities that are easily identified. And if you've only got three, I'd rather it be my best ideas instead of my worst.”

“But when you know you have an edge, you should bet heavily. When you know you're right. Most people don't teach that in business school. It's insane. Of course you got to bet heavily on your best bets.”

“How many of you have 56 brilliant ideas in which you have equal confidence? Raise your hands, please. How many of you have two or three insights that you have some confidence in? I rest my case.”

“The first rule of a happy life is low expectations. If you have unrealistic expectations you're going to be miserable your whole life. You want to have reasonable expectations and take life's results, good and bad, as they happen with a certain amount of stoicism.”

“The safest way to try to get what you want is to try to deserve what you want.”

“The highest form which civilization can reach is a seamless web of deserved trust.”

“In your own life what you want is a seamless web of deserved trust. And if your proposed marriage contract has forty-seven pages, my suggestion is do not enter.”

“It's so simple to spend less than you earn, and invest shrewdly, and avoid toxic people and toxic activities, and try to keep learning all your life, and do a lot of deferred gratification because you prefer life that way. And if you do all those things, you are almost certain to succeed. If you don't, you're going to need a lot of luck.”

“Spend less than you make; always be saving something. Put it into a tax-deferred account. Over time, it will begin to amount to something. This is such a no-brainer.”

Wording is stable; the 2003 occasion rests on secondary compilations.

“Gentlemen, may each of you rise high by spending each day of a long life aiming low.”

The ironic closing toast of his 'how to guarantee a life of misery' speech.

“Whenever I feel sad about being in a wheelchair, I think that Roosevelt ran the whole damn country for twelve years in a wheelchair. I'm just trying to make this wheelchair thing last as long as Roosevelt did.”

“We're both smart enough to have watched our friends who got rich build these really fancy houses. And I would say in practically every case, they make the person less happy, not happier.”

“You've got to work where you're turned on. I don't know about Warren, but I have never succeeded to any great extent in something I didn't like doing.”

“If you think you're having a hard life, you got on the wrong planet.”

From Tilson's notes.

“A great business at a fair price is superior to a fair business at a great price.”

Munger's own formulation — distinct from Buffett's 'a wonderful company at a fair price' version.

“All intelligent investing is value investing — acquiring more than you are paying for.”

A signature line he restated in varying forms; no single dated occasion pins this wording.

“The number one idea is to view a stock as an ownership of the business, and to judge the staying quality of the business in terms of its competitive advantage.”

“We like the business great first. Then, second, we want a great manager. But we have not made a huge success by investing in great managers who take over lousy businesses. That is not the way we rose. If you're a lousy manager, you really need a great business.”

“Practically everything dies in business. None of the eminents last forever. They're all on their way to dying, so other things can replace them and live.”

Transcripts split on one spoken word ('eminents' vs 'eminence') — no canonical spelling exists.

“The only duty of a corporate executive is to widen the moat. We gave you a competitive advantage, and you must leave us the moat.”

From a note-taker's recollections (captioned by him as 'not quotes'), so the wording is approximate — but 'widen the moat' is a well-attested Munger formulation.

“IBM got bounced off the wave after "surfing" successfully for 60 years. And that was some collapse — an object lesson in the difficulties of technology.”

“Wrigley, simply by being so well known, has advantages of scale — what you might call an informational advantage.”

“Elon says a conventional moat is quaint. That's true of a puddle of water. He says that the best moat would be to have a big competitive position. That is also right. It's just ridiculous.”

His riposte to Elon Musk dismissing moats as 'quaint.'

“My theory, Warren, is if it can't stand a little mismanagement, it's no business.”

His test of a truly great business — it survives a mediocre manager. Said to Buffett.

“The trouble there was not that Henry Singleton grew old. It's that some of those businesses' franchises got cold.”

On why Teledyne faded — not Singleton's age but cooling franchises.

“What you're seeing in Coke's stock price is the residual prediction that despite its recent stumbles, they'll be coloring a lot more water 20 years from now.”

From Tilson's notes — Coke as 'colored water.'

“We found out fairly quickly that we could raise the price every year 10%, and nobody cared. We didn't make the volumes go up or anything like that. Just made the profits go up.”

On See's Candies' pricing power.

“There's something about the flavor of ketchup on a goddamn fried potato… that you are really willing to change brands over. They want Heinz! And so, you can raise the price of Heinz pretty much.”

On Heinz's brand pricing power.

“Unfortunately, a lot of moats have been filling up with sand lately — you know, the daily newspaper, the network television station, all these castles with their lovely moats. The moats are filling up.”

“We made that success not by conquering change, but by avoiding it.”

On Burlington Northern's durability.

“I don't think that value investing will ever go out of style. Who in the hell doesn't want value when you buy something? How can there be anything else that makes any sense except value investing?”

“To prevent wealth from killing you, your success turning into a disadvantage, is a big problem in business.”

From his Costco-vs-GM contrast — GM's success became its undoing.

“There are actually businesses that you will find a few times in a lifetime, where any manager could raise the return enormously just by raising prices — and yet they haven't done it. So they have huge untapped pricing power that they're not using. That is the ultimate no-brainer.”

“Business success long term is a lot like biology. And in biology, what happens is the individuals all die, and eventually, so do all the species. Capitalism is almost as brutal as that… Whoever dreamed when I was young that Kodak and General Motors would go bankrupt?”

Condensed from a longer answer on capitalism's creative destruction.

“I don't think that works as well as keeping people in one business for a long time and having them identify with the business, the way Berkshire does.”

On GE's culture versus Berkshire's — keeping people in one business.

“Well, the big consumer brands are still very valuable. But they had an easier time in a former era than they're going to have in the future era.”

“It is one thing each year to pay the croupiers 3% of starting wealth when the average foundation is enjoying a real return, say, of 17% before the croupiers' take. But it is not written in the stars that foundations will always gain 17% gross, a common result in recent years.”

The punchy 'It is one thing… it is quite another' version circulated online is fabricated; this is the authentic passage.

“Easy money will always attract wretched excess. It's just nature. It's like a bunch of animals feeding on carcasses in Africa.”

Wording lightly cleaned of a spoken filler; on the excesses of modern finance.

“I like inequality a lot better than I like poverty.”

“The desire to get rich fast is pretty dangerous.”

“You people, I think, have created a lot of "febezzle" through your foolish investment management practices in dealing with your large holdings of common stock.”

Munger's coinage — 'febezzle,' the functional equivalent of embezzlement — built on J. K. Galbraith's 'bezzle.'

“Rich institutions, like rich individuals, should do a lot of self-insurance if they want to maximize long-term results.”

“Nobody could make a living if that's all they practiced. You need some mumbo jumbo if you're going to be a witch doctor. You need some song and dance.”

On the needless complexity sold in money management.

“I've just seen genius after genius with a great record, and pretty soon they got $30 billion and two floors of young men, and away goes the good record. That's just the way it works.”

On why great investment records decay at scale.

“I am personally skeptical of goosing the economy with increasing amounts of consumer credit under terms where significant fractions of the populace are behaving just like so many alcoholics — they're right up to their credit card limit every month. That does not strike me as a wonderful way to have a civilization function.”

“There once was a man who became the most famous composer in the world, but he was utterly miserable most of the time, and one of the reasons was that he always overspent his income. That was Mozart. If Mozart couldn't get by with this kind of asinine conduct, I don't think you should try it.”

He reused this Mozart line in his 2007 USC commencement too.

“What the Chinese have proved is you can have a screamingly successful economy with a fairly controlling government.”

He added: 'not a fashionable thing to say, but I think it's true.'

“On a net basis, the whole investment management business together gives no value added to all buyers combined. That's the way it has to work. Of course, that isn't true of plumbing and it isn't true of medicine.”

“I think this kind of crazy speculation in enterprises not even found or picked out yet is a sign of an irritating bubble. It's just that the investment banking profession will sell shit as long as shit can be sold.”

On celebrities promoting their own SPACs.

“The rest of the world has gone off on some crazy kick where they can create a standard formula, and that's cost. They even get a cost of equity capital for some business that's old and filthy rich. It's a perfectly amazing mental malfunction.”

His fuller statement of the 'cost of capital is stupid' view; 'cost' here = cost of capital.

“Banking is a very peculiar business. The temptations to do something stupid are way bigger in banking than they are in most businesses. There are a lot of ways in banking to make your near term future look good by taking risks you really shouldn't take for the sake of your longer term future.”

“Imagine a balance sheet item labeled: 'Asset — good until reached for.'”

On the hidden risk in a derivatives book.

“I think a good litmus test of the mental and moral quality at any large institution would be to ask them, 'Do you really understand your derivatives book?' Anyone who says yes is either crazy or lying.”

“I don't think anybody could ever buy a bank who doesn't have a feeling for how really shrewd the management is. Banking is a field where it's easy to delude yourself into reporting big numbers that aren't really being earned. It's a very dangerous place for an investor.”

Lightly cleaned from a rough spoken transcript.

“All over America, you've got people hiding their problems and papering them over with accounting tricks when they start to arise. That is not our style around here. We like to address them.”

“A bunch of elderly people that have done things a certain way for a long time now have to deal with a standard like a mosquito catcher. They know how to smack mosquitoes. They just can't handle gnats.”

On financial regulators after the FTX collapse.

“Why run a casino in drag when you can run a real casino?”

From a note-taker's paraphrase; on banks running derivatives 'casinos.'

“Three rules for a career: Don't sell anything you wouldn't buy yourself; don't work for anyone you don't respect and admire; and work only with people you enjoy.”

A genuine Munger sentiment; this tidy three-rule phrasing is a compiler's rendering, not a verbatim transcript line.

“I think track records are very important. If you start early trying to have a perfect one in some simple thing like honesty, you're well on your way to success in this world.”

“It isn't an easy thing to work very hard for many years to build up a significant career, as I had done, and then to destroy that career on purpose.”

“It's one of the advantages of being very rich: you can behave better than other people.”

In context, about the freedom independence gives to act with integrity — not a boast.

“Warren and I both know some very successful businessmen who have not one true friend on earth — and rightly so.”

He went on: 'And that is no way to live a life.'

“You want to live your life so some people will actually miss you when you're gone.”

“If you want to improve your grandchildren, the best way is to improve yourself.”

“First, be unreliable. Do not faithfully do what you have engaged to do. If you will only master this one habit you will more than counterbalance the combined effect of all your virtues, howsoever great.”

The first of his ironic 'how to guarantee misery' prescriptions — the real counsel is the inverse (be reliable).

“I'm a puritan. I always want to suffer now to make the future better, because I think that's the way grown-ups should behave.”

Said while arguing to conserve U.S. hydrocarbon reserves.

“If you want to carry one message from Charlie Munger it's this: if it's trite it's right. All those old virtues, they all work.”

“How nice it is to have a tyrant's strength, and how wrong it is to use it like a tyrant.”

From his 2011 Wesco-merger remarks; note-taker-dependent wording (one source reads 'but how wrong').

“If all you succeed in doing in your life is to get early rich from passive holding of little bits of paper, and you get better and better at only that for all your life, it's a failed life. Life is more than being shrewd at passive wealth accumulation.”

“I have a friend who says, 'The young man knows the rules and the old man knows the exceptions.'”

He credits the line to an unnamed friend.

“It's a big mistake to pretend to be practically anything, because you become what you pretend to be. I knew a couple of no-good Nicks in my youth who became leading philanthropists. They did it just to mislead people, but after they'd done it for a while, they became legitimate philanthropists. It always gave me the conclusion that hypocrisy really is better than most people think.”

Transcripts differ on 'no-good Nicks' vs 'no-goodniks.'

“If the high road is way more profitable, do you deserve a lot of credit for choosing it? People who get the credit are the people that take it even when it's painful.”

“There are certain virtues that are common in all of Berkshire's subsidiaries. We don't create them — we select companies that have them already. We just don't screw it up.”

From Whitney Tilson's contemporaneous notes (faithful, not court-reporter-exact).

“You particularly want to avoid working directly under somebody you don't admire and don't want to be like. It's dangerous. We're all subject to control to some extent by authority figures, particularly authority figures who are rewarding us.”

“It was never easy. It's thoroughly understood it was never easy, and it's harder now. But it takes time. And you pay attention that you're handling the people you deal with. You want a good reputation when you're all done, not a bad one.”

“Reputation is very helpful in financial life, and to destroy your reputation by associating with scum balls and scum ball promotions, it's a huge mistake.”

On reputable firms backing FTX.

“There's no more guaranteed way to make people hate you than to fail them in their reasonable expectations. So, of course, you want to live a life where, by and large, you're meeting the reasonable expectations of other people. That's what civilization requires of all of us.”

“If you make yourself a very reliable person and stay reliable all your life, faithfully doing whatever you engage to do, it will be very hard for you to fail at anything you want.”

The sincere counterpart to his ironic 'first, be unreliable' misery prescription.

“They take it like men, and they aren't bitching and wailing and they don't act like victims.”

On the Japanese people's stoicism through decades of stagnation.

“The proper antidote to creating Persian Messenger Syndrome and its bad effects is to develop, through exercise of will, a habit of welcoming bad news.”

His antidote to 'Persian Messenger Syndrome' — punishing the bearer of bad news.

“Perhaps this 'eyes-half-shut' solution is about right, but I favor a tougher prescription: 'See it like it is and love anyway.'”

His tougher answer to Franklin's 'eyes wide open before marriage, half shut thereafter.'

“I have a fundamental theory that in some way the world is just, and if you do something immoral or stupid there will likely be a whirlwind someday where you get clobbered.”

From Peter Boodell's notes (recollections, corroborated elsewhere).

“Here's an area where we have a perfect record that extends over many decades. We have been demonstrably foolish in almost every operation that had to do with real estate we've ever touched. That housing tract that I developed because I didn't want to let the zoning authorities rob me the way they wanted to — I wish I had let them. We have a certified record of failure in this deal.”

“I don't mind not having caught Amazon early. The guy is kind of a miracle worker. It's very peculiar. I give myself a pass on that. But I feel like a horse's ass for not identifying Google better.”

On missing Google despite GEICO's ad-spend evidence; wording varies slightly by transcript.

“We live in a world of sin, sorrow, and misdecision.”

“Well, all human successes are successes so far. And this is a success so far, and we don't know for sure what the ultimate consequences would be.”

“A careful survey in Sweden showed that ninety percent of automobile drivers considered themselves above average. And people who are successfully selling something, as investment counselors do, make Swedish drivers sound like depressives.”

The underlying study (Svenson) is usually cited near 70–80%; the 'ninety percent' is Munger's framing.

“Every human being tends to believe way more than he should in what he's worked hard to find out or what he's announced publicly that he already believes. While we shout our knowledge out, we're really pounding it in; we're not enlarging it.”

“Our current problems are quite confusing. In fact, if you aren't confused, I don't think you understand it very well.”

“The best antidote to folly from an excess of self-regard is to force yourself to be more objective when you are thinking about yourself, your family and friends, your property, and the value of your past and future activity.”

“They are way too liberal in providing the kind of accounting the financial promoters want. They've sold out, and they do not even realize that they've sold out.”

“You can't save everybody. That would have created unlimited revulsion in the body politic. I probably would have let Lehman go, too.”

His explanation for why letting Lehman Brothers fail was not, in his view, a mistake.

“We believe there should be a huge area between everything you should do and everything you can do without getting into legal trouble. I don't think you should come anywhere near that line.”

“Just because it's a free market doesn't mean it's honorable.”

From Whitney Tilson's notes of the 2005 Wesco meeting.

“Valeant, of course, was a sewer. Those who created it deserve all the opprobrium that they got.”

“Rationality is a moral duty. It's a moral failure to be unreasonable when you have the capacity to be reasonable.”

“The cash register did more for human morality than the Congregational Church.”

“The ideal is not to just make all the money that can be legally be made without causing too much legal trouble. The idea is bigger than that. It's that we celebrate wealth only when it's been fairly won and wisely used.”

A deep cut — distinct from the family-motto aphorism 'a fortune fairly won and wisely used' he credited to a great-grandfather.

“I don't think capitalism requires that you make all the money that you can. I think there are times when you should be satisfied with less based on just ideas of decency.”

“I don't think you get a lot of credit in life for not committing adultery with the Virgin Mary.”

On Wall Street ethics — you get no credit for merely doing the bare legal minimum.

“It's just god-awful that something like that would draw investment from civilized men and decent citizens. It's deeply wrong. We don't want to make our money selling things that are bad for people.”

On Robinhood and payment-for-order-flow (2021).

“It's a deep moral depravity if some widow comes to you with $500,000 and you charge her one point a year when you could put her in the indexes — but you need the one point. So people just charge some widow a considerable fee for worthless advice.”

On advisers who charge a fee for advice worse than a free index fund.

“You don't have to remember your lies, which gets complicated if you keep lying all of the time. In fact, it gets so complicated that you're sure to fall off and you'll be recognized as a liar.”

His practical case for honesty — you never have to remember the truth.

“You want to deliver to the world what you would buy if you were on the other end.”

“The current members of Congress that want to retain the former abusive accounting, which are probably a majority of the House of Representatives, are way worse than the people who wanted to round pi to an even number. Those people were stupid. These people are mostly not stupid, but dishonorable. I mean, they know it's wrong, and they want to do it anyway.”

On members of Congress defending abusive stock-option accounting.

“Of course they have an advantage. Cleverly obtained. Of course it does the rest of the civilization no good at all. It's the functional equivalent of letting rats into a grainery.”

On high-frequency trading (after Michael Lewis's 'Flash Boys').

“Why is the high road the best way in investment banking? It's not very crowded.”

From Tilson's notes; the 'high road / less crowded' idea he elsewhere credits to Buffett.

“Some systems should be made deliberately unfair to individuals because they'll be fairer on average for all of us.”

“The hedge fund operators of America get a much lower tax rate than the professors of physics or the drivers of taxis. This is demented.”

On the carried-interest tax break for hedge-fund managers.

“People will cheerfully tolerate considerable differences of outcome if they seem deserved. Nobody minds the fact that Tiger Woods has a big income because he's the best golfer who's ever lived. But differences in outcomes that are perceived as undeserved tend to disrupt democracy.”

He credits the deserved-inequality point to Aristotle.

“Being able to recognize when you're wrong is a godsend. A good bit of the Munger fortune came from liquidating things we originally purchased because we were wrong. I actually work at trying to discard beliefs.”

“One thing we've learned is, if it's clear that something is a mistake, is to fix it quickly. It doesn't get better while you wait.”

“Getting it done is when it's done, not when it's in somebody else's inbox.”

“Those are opportunity-cost billions. They don't show up on the financial statements, but the amount of money that's been blown by dumb decisions at headquarters at Berkshire Hathaway is awesome.”

“In a world where you sometimes have to amputate a limb to stay alive, you can't expect that every business can stay exactly as it is.”

On shutting the least-productive plants in the downturn.

“An idea or a fact is not worth more merely because it is easily available to you.”

“Like Warren, I had a considerable passion to get rich. Not because I wanted Ferraris — I wanted the independence. I desperately wanted it.”

“I want to swim as well as I can against the tides. I'm not trying to predict the tides.”

“If you don't work hard at trying to remain rational and you're constantly floating along caring terribly about what other people think, you're almost sure to be carried to folly by the folly of the crowd.”

Wording approximate (from OID's 2003 Wesco excerpts).

“I don't love Ben Graham and his ideas the way Warren does. You have to understand, to Warren — who discovered him at such a young age and then went to work for him — Ben Graham's insights changed his whole life. But I have to say, Ben Graham had a lot to learn as an investor.”

Lightly trimmed from the 2014 fireside; the connective 'But I have to say' is editorial. He genuinely rated Graham below Buffett's veneration of him.

“This 'choose your idiot' form of news gathering I don't much like. I flip back and forth between idiot types. I will not stay with just one type of idiot.”

“I'd argue that rationality is a high moral duty. It's the idea that binds us all together.”

From Whitney Tilson's contemporaneous meeting notes (reconstructed from memory, not a recording).

“It's bad to have an opinion you're proud of if you can't state the arguments for the other side better than your opponents.”

“The point of getting rich is so you don't have to need other people, so you don't have to get along with other people.”

“I would rather throw a viper down my shirtfront than hire a compensation consultant.”

“I also want to say proudly that we have no mission statement.”

“Carl Icahn's a very able man, but he should not be running the world.”

“I have never had the slightest interest in owning gold. It's a much better life to work with businesses and people engaged in business. I can't imagine a worse crowd to deal with than a bunch of gold bugs.”

“My definition of being properly educated is being right when the professor is wrong. Anybody can spit back what the professor tells you. The trick is to know when he's right and when he's wrong.”

“What I like about Warren is the irreverence. We don't have automatic reverence for the pompous heads of all civilization.”

On Buffett.

“If you stop to think about it, civilized man has always had soothsayers, shamans, faith healers, and God knows what all. The stock picking industry is four or five percent super-rational, disciplined people, and the rest of them are sort of like faith-healers or shamans.”

“That is one of our advantages as an insurer — we don't give a damn about lumpy results. Everyone else is trying to please Wall Street. This is not a small advantage.”

From Tilson's notes.

“Our approach has worked for us. Look at the fun we, our managers, and our shareholders are having. More people should copy us. It's not difficult, but it looks difficult because it's unconventional — it isn't the way things are normally done.”

From Tilson's notes.

“It is not usually the conscious malfeasance of your narrow professional adviser that does you in. Instead, your troubles come from his subconscious bias.”

“Just because he's a horse's patoot, you don't have to be one too. You can reach out and grasp the model that better solves the overall problem.”

“I don't play in a game where other people are wise and I am stupid. I look for a game where I am wise, and they are stupid. And believe me, it works better. God bless our stupid competitors. They make us rich.”

“I don't like multitasking. I see these people doing three things at once, and I think, God what a terrible way that is to think. I am so stupid, though, I have to think hard about a thing for a long time. And the idea of multitasking my way to glory has never occurred to me.”

From a single secondary transcript of the 2015 meeting.

“The general system for money management requires people to pretend that they can do something that they can't do, and to pretend to like it when they really don't. And I think that's a terrible way to spend your life, but it's very well paid.”

“Warren wants the odds in his favor, not somebody else. It's just so simple if you're Warren. You want to be the house, not the punter.”

Of Buffett's approach; 'punter' is British slang for a bettor.

“I did not intend to get rich. I wanted to get independent. I just overshot. And by the way, while you're clapping, some of the overshooting was accidental.”

“The people who think they know exactly what's going to happen and how many people are going to die from tropical diseases and so forth are mostly talking through their hats. I think there's a class of people who like the idea they've got a calamity to worry about.”

From a climate exchange — he granted 'there plainly is' some warming, but objected to forecasters overclaiming.

“I sometimes say that Alan Greenspan overdosed on Ayn Rand when he was young. He thought if an ax murder happened in a free market, it was probably all for the best.”

On the 2008 crisis and the failure to 'step on the boom.'

“I don't think there are good arguments against my position. I think the people who oppose my position are idiots.”

On crypto, when pressed to argue the opposing view.

“My final word of advice would be, if this gives you a little temporary unpopularity in your peer group, the hell with them.”

“The board is a safety valve in case I go completely crazy and Warren doesn't do anything about it.”

From Tilson's notes.

“I have nothing to add.”

A decades-long catchphrase — a recurring meeting line, not a single occasion.

“Every time you see the word EBITDA, you should substitute the words 'bullshit earnings.'”

“If you mix raisins with turds, they're still turds.”

On dot-com speculation and bad acquisitions.

“Some people go, well, it's a small Berkshire and it will double like rabbits — and, of course, it's not a small Berkshire. I'm 99 years old, for Christ's sake.”

Cleaned-transcript wording; phrasing varies slightly across transcripts.

“This only masquerades as a shareholder's meeting. It's really a gathering to hear the thoughts of the assistant headmaster of a cult.”

His recurring self-deprecating opener; he reused the 'assistant cult leader' joke for years.

“Both parties have wings that are full of idiots. That is the nature of the game. And the reason it has worked as well as it has is that the people in the middle have sort of over time tuned out the idiots on both sides. But every once in a while, the idiots get in control. And, of course, that has terrible consequences. That's the nature of the system.”

From his BBC interview — a separate segment from Buffett's. These are Munger's words, not Buffett's.

“It's hard to imagine anything dumber than the way the Chinese hold stocks. They're so good at everything else. It shows how hard it is to be rational.”

About speculative retail trading in China — not Chinese companies, which he praised the same day.

“One thing that's nice about the human condition is that people are always doing thoroughly ridiculous things. If you don't laugh a little, those things will break you.”

“As for the corporation consultants who advise on salaries, all I can say is that prostitution would be a step up for them.”

“If you see the world accurately, it's bound to be humorous, because it's ridiculous.”

“My idea of shooting a fish in a barrel is draining the barrel first.”

“I have a black belt in chutzpah. I was born with it.”

“So while Warren and Charlie will soon be gone — not too soon in my case, but I'm a little worried about Warren — the stupidity of management practice in the rest of the corporate world will likely remain ample enough to give this company some comparative advantage way into the future.”

On Berkshire's durability after they're gone; Munger, the elder, jokes 'not too soon in my case.'

“There's obviously been some flight to quality in reinsurance, but I'd call it more of a dribble to quality.”

“The one thing we've always guaranteed is that the future will be a lot worse than the past.”

“Well, at Berkshire, we have a simple problem of estate planning. Just hold the goddamn stock.”

His one-line estate plan; when Buffett said it doesn't fit everyone, Munger replied 'it only fits 95%.'

“I think it's really stupid for a state to drive the rich people out. They're old. They keep your hospitals busy. They don't burden your schools, the police department, your prisons. They give a lot. Who wouldn't want rich people?”

“Both Warren and I sometimes wonder what would have happened if we'd started in better businesses instead of trading stamps, aluminum, textile companies — we even had a windmill company at one time. It took us a long time to wise up.”

“I'll pay $2.5 million not to read it.”

Munger's line, recounted by Buffett (who later retold the figure as $2 million).

“Imagine extending credit to a guy whose nickname is the 'bouncing Czech.' If you wrote it as satire, people would say it was too extreme to be funny.”

On Robert Maxwell; the 'bouncing Czech' nickname was the UK press's.

“Those are not hard sciences, finance and economics. And finance really attracts people who should have gone into snake charming.”

“It's like the old story about the little store with salt all over its walls. A stranger comes in and says to the storeowner, 'You must sell a lot of salt.' And he replies, 'No, I don't. But you should see the guy who sells me salt.'”

A joke he retells to illustrate a chain store's centralized buying.

“Coca-Cola was run for years by a man with a very severe mental impairment. The directors just assumed he was drunk and let him stay there year after year. Now, that's my idea of a wonderful business — you can be mentally defective and run it pretty well.”

“Man, as a social animal who has the gift of language, is born to prattle and to pour out twaddle that does much damage when serious work is being attempted.”

From the Twaddle Tendency in his misjudgment framework.