Broker Check
Charlie Munger

Charlie Munger

November 30, 2023

The recent passing of Warren Buffet’s best friend and business partner Charlie Munger, just a few weeks short of his 100th birthday, has left me feeling sad. The world lost a good one. We may never see his like again.

Munger was famous for his wit and willingness to provide unvarnished views. Often hilariously. One of my favorite examples of Charlie Munger’s wit and wisdom is captured in his commencement speech to the Harvard’s class of 1986.

For context, Munger quoted and expanded on a commencement speech given by late night TV host and comedian Johnny Carson. What Carson said was that he couldn’t tell the graduating class how to be happy, but he could tell them from personal experience how to guarantee misery. Carson’s prescriptions for certain misery included:

1) Ingesting chemicals in an effort to alter mood or perception;

2) Envy; and

3) Resentment.

Munger added four of his own. I hope you enjoy them as much as I. You might even consider sharing this with your friends and family.

…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. If you like being distrusted and excluded from the best human contribution and company, this prescription is for you. Master this one habit and you can always play the role of the hare in the fable, except that instead of being outrun by one fine turtle you will be outrun by hordes and hordes of mediocre turtles and even by some mediocre turtles on crutches.

I must warn you that if you don’t follow my first prescription it may be hard to end up miserable, even if you start disadvantaged. I had a roommate in college who was and is severely dyslexic. But he is perhaps the most reliable man I have ever known. He has had a wonderful life so far, outstanding wife and children, chief executive of a multi-billion dollar corporation.

If you want to avoid a conventional, main-culture, establishment result of this kind, you simply can’t count on your other handicaps to hold you back if you persist in being reliable.

I cannot here pass by a reference to a life described as “wonderful so far,” without reinforcing the “so far” aspects of the human condition by repeating the remark of Croesus, once the richest king in the world. Later, in ignominious captivity, as he prepared to be burned alive, he said: “Well now do I remember the words of the historian Solon: “No man’s life should be accounted a happy one until it is over.”

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. This prescription is a sure-shot producer of misery and second-rate achievement.

You can see the results of not learning from others’ mistakes by simply looking about you. How little originality there is in the common disasters of mankind -drunk driving deaths, reckless driving maimings, incurable venereal diseases, conversion of bright college students into brainwashed zombies as members of destructive cults, business failures through repetition of obvious mistakes made by predecessors, various forms of crowd folly, and so on. I recommend as a memory clue to finding the way to real trouble from heedless, unoriginal error the modern saying: “If at first you don’t succeed, well, so much for hang gliding.”

The other aspect of avoiding vicarious wisdom is the rule for not learning from the best work done before yours. The prescription is to become as non-educated as you reasonable can.

Perhaps you will better see the type of non-miserable result you can thus avoid if I render a short historical account. There once was a man who assiduously mastered the work of his best predecessors, despite a poor start and very tough time in analytic geometry. Eventually his own original work attracted wide attention and he said of that work:

“If I have seen a little farther than other men it is because I stood on the shoulders of giants.”

The bones of that man lie buried now, in Westminster Abbey, under an unusual inscription:

“Here lie the remains of all that was mortal in Sir Isaac Newton.”

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. Because there is so much adversity out there, even for the lucky and wise, this will guarantee that, in due course, you will be permanently mired in misery. Ignore at all cost the lesson contained in the accurate epitaph written for himself by Epictetus: “Here lies Epictetus, a slave, maimed in body, the ultimate in poverty, and favored by Gods.”

My final prescription to you for a life of fuzzy thinking and infelicity is to ignore a story they told me when I was very young about a rustic who said: “I wish I knew where I was going to die, and then I’d never go there.” Most people smile (as you did) at the rustic’s ignorance and ignore his basic wisdom. If my experience is any guide, the rustic’s approach is to be avoided at all cost by someone bent on misery. To help fail you should discount as mere quirk, with no useful message, the method of the rustic, which is the same one used in Carson’s speech.

What Carson did was to approach the study of how to create X by turning the question backward, that is, by studying how to create non-X. The great algebraist, Jacobi, had exactly the same approach as Carson and was known for his constant repetition of one phrase: “Invert, always invert.” It is in the nature of things, as Jacobi knew, that many hard problems are best solved only when they are addressed backward.

 For instance, when almost everyone else was trying to revise the electromagnetic laws of Maxwell to be consistent with the motion laws of Newton, Einstein discovered special relativity as he made a 180 degree turn and revised Newton’s laws to fit Maxwell’s. It is my opinion, as a certified biography nut, that Charles Robert Darwin would have ranked near the middle of the Harvard School graduating class of 1986. Yet he is now famous in the history of science.

This is precisely the type of example you should learn nothing from if bent on minimizing your results from your own endowment. 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.

In contrast, most people early achieve and later intensify a tendency to process new and disconfirming information so that any original conclusion remains intact. They become people of whom Philip Wylie observed:” You couldn’t squeeze a dime between what they already know and what they will never learn.” The life of Darwin demonstrates how a turtle may outrun the hares, aided by extreme objectivity, which helps the objective person end up like the only player without blindfold in a game of pin-the-donkey.

If you minimize objectivity, you ignore not only a lesson from Darwin but also one from Einstein. Einstein said that his successful theories came from: “Curiosity, concentration, perseverance, and self-criticism. And by self-criticism he meant the testing and destruction of his own well-loved ideas.

Finally, minimizing objectivity will help you lessen the compromises and burdens of owning worldly goods, because objectivity does not work only for great physicists and biologists. It also adds power to the work of a plumbing contractor in Bemidji. Therefore, if you interpret being true to yourself as requiring that you retain every notion of your youth you will be safely underway, not only toward maximizing ignorance, but also toward whatever misery can be obtained through unpleasant experiences in business.

It is fitting now that a backward sort of speech end with a backward sort of toast, inspired by Elihu Root’s repeated accounts of how the dog went to Dover, “leg over leg.” To the class of 1986:

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

Munger also said “The best thing a human being can do is help another human being know more.” There are lessons here for us all.

Rest in peace, Charlie.


Scott R. McGimpsey November 30th, 2023

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