EQ Saturday Sapience #43
Equity Intelligence 2nd December 2023
Charlie Munger, esteemed partner of Warren Buffett and the renowned 'Abominable No-Man,' passed away on November 29th, 2023, at the age of 99. Articulating a tribute that encapsulates the magnitude of Mr. Munger's influence on the investment community is a formidable challenge, for his impact resonates deeply and universally. His passing elicits a profound sense of loss; it is rare to encounter an individual who has the power to profoundly stir our very essence and guide us toward a path of comprehensive success—both in life and in the realm of investing.
Charlie Munger's life was a testament to a broader wisdom that transcended mere financial acumen. He embodied a philosophy that served as a foundational 'operating system for life,' steering us toward superior outcomes. His insights provided not only a blueprint for becoming astute investors but also for living richer, more deliberate lives. As we reflect on his legacy, we realize that to be influenced by Charlie is to have the scaffolding for a life well-lived, and for this, we are eternally grateful.
Key broad pillars of his operating system for life as we see it -
- Get worldly wise and keep at it all life - He insisted that acquiring wisdom was not just a practical goal of better outcomes but it has to be taken up as a moral duty for a better world for all. As he said, “The acquisition of wisdom is a moral duty. It’s not something you do just to advance in life. And there’s a corollary to that idea that is very important. It requires that you’re hooked on lifetime learning.”
- And to be wise, first stop being stupid – In his words, “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.”
- Be multidisciplinary - His core approach to get "Worldly Wise" was by way of being multidisciplinary. As he said, “You must know the big ideas in the big disciplines and use them routinely – all of them, not just a few. Most people are trained in one model – economics, for example – and try to solve all problems in one way. You know the old saying: "To the man with a hammer, the world looks like a nail.’ This is a dumb way of handling problems."
- Adjust your behaviour - To behave well is the objective of wisdom and that would involve Independent & rational thinking plus control over emotions and feelings. He insisted - “Acquire worldly wisdom and adjust your behaviour accordingly. If your new behaviour gives you a little temporary unpopularity with your peer group…then to hell with them.” And to behave wise, here are some mental models that we learn from him:
- Learn to be rational and objective all the time.
- Say as it is – be blunt.
- Learn to think through problems backwards as well as forward.
- Appreciate vicarious learning.
- Make eminent dead your friend.
- Avoid intense ideologies.
- Get rid of self-serving bias, envy, resentment, and self-pity.
- Avoid being part of a system with perverse incentives.
- Work with people you admire, and avoid toxic people.
- Be reliable. Unreliability can cancel out the other virtues.
- Build a web of trust.
- Deserve the success… etc. etc. etc.
Here are a few tributes we read:
- Behind Charlie Munger's Investment Style With Behavioural Finance Expert Professor Sanjay Bakshi… Watch here
- Tribute by Jason Zweig at Wall Street Journal… Read here
- Charlie Munger Lives on as All Great Philosophers Do… Read here
- Charlie Munger was a lot more than Warren Buffett’s sidekick. In business, he was a paragon of common sense… Read here
- Mungerisms … Read here
- Charlie Munger: He didn’t merely teach us how to invest, he showed us how to think... Read here
- Rest in Peace, Charlie Munger… Read here