Charlie Munger

On My Mind | 2023.12.22

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It’s been a while! I hope you have had a great 2023 — and hopefully it is alright that I am back in your inbox this morning!

As a reminder, back in July 2022, I hit pause on sending weekly emails, saying that…

I enjoy the idea of writing something, but no matter how many weeks I have done it, every week I treat it more like a chore than something I want to do…

Consequently, I have decided to shut things down for now. I am sorry about that. All my old posts will stay online, and anyone who remains subscribed will be notified if I ever start writing here again.

During the following year and a half something interesting happened to my writing — total subscribers actually grew by ~30% — from about 1,700 to 2,200. This mainly happened through a number of my long-form posts on history, people, and ideas getting found, shared, forwarded, debated, and just generally posted around online (hint hint 😉).

An intelligent person might look at that trend, conclude not writing was fairly effective, and leave things to continue upwards and onwards unadulterated. I, however, have had a number of things coalesce into the inspiration to jump back into writing, include:

  • I read less than I did last summer. I thought writing less would lead to more time spent reading. I found that not having a reason to share new things with others lead to me not being as active in seeking out things worth sharing.

  • I am a worse writer. I write slower, and with less ease, than I did before. I believe an ability to communicate well is one of the most important skills a person can have, and skills are improved through practice.

  • I had my first child. I knew it would be a new, difficult challenge — but, man, I had no idea. Beyond the sleepless nights, relax-less days, and added stress, the desire to share ideas with my child in the future means I need to come across more ideas, and then distill them into something useful.

  • Charlie Munger passed away. His death reminded me of how much value I got from reading random things and thinking about how they applied to my life — whether it was my job, my relationships, my health, etc.

Taking that last bullet as specific inspiration for this Friday’s email, I thought I would focus all sections on Charlie.

Long-time readers of BWF know that I have a special place in my heart for Charlie. I’ve written a few things he inspired, and shared some of his original material here before — such as:

I am happy to be back giving this another go — so please drop me a reply or leave a comment if you have anything to share or ideas about what could make the newsletter better the second time around!

ButWhatFor? Four for Friday

1. One Quote: Your Only Option

2. One Long: What You Pretend to Be

3. One Short: Charlie Munger’s Bookshelf

4. One Poll: Before He Passed Away

• Supporting: 50 Charlie Munger Quotes

One Quote

If you soldier through, you can get through almost anything. And it’s your only option.

You can’t bring back the dead, you can’t cure the dying child. You can’t do all kinds of things. You have to soldier through it. You just somehow you soldier through.

If you have to walk through the streets, crying for a few hours a day as part of the soldiering, go ahead and cry away. But you have to – you can’t quit. You can cry all right, but you can’t quit.

— Charlie Munger, CNBC’s Charlie Munger: A Life of Wit and Wisdom

More on this topic was written by another writer at The Rationale Walk in their post called Soldier On. Special thanks to him for surfacing this specific quote.

One Long

Becoming What You Pretend to Be

You become what you pretend to be, to some considerable extent.

— Charlie Munger

Shortly after ceasing these weekly emails, I realized my health was in a terrible spot.

Having recently entered my 30s, I was the heaviest I had ever been by a fair margin and old photographs of me stared back asking the question “Who are you?” My asthma wasn’t under control, I had persistent foot pain from nonexistent leg flexibility, moving furniture in the house required a second hand, and with a first child on the way, I doubted I would have the energy needed to handle late nights with a little one.

One Saturday morning I happened to pull a book that I had bought a couple years prior off my bookshelf. I had never gotten around to opening it. It was written by a mentor of mine — an older gentleman who wrote this self-help book in the 90s after a career in the military. I’ve never been a big fan of self-help books — they feel a bit cringy to me. A lot of “rah rah” and “you are great,” and “all you have to do to unlock your potential is…”.

That just doesn’t resonate with me. Pep talks and motivational speeches are the same. They feel over-the-top and forced.

The difference here, though, was that my mentor wrote this book when he was in his early thirties, having just left the military and not yet really transitioned into the business world. He wrote out his views on building good health, a meaningful life, and financial security. At the time, he could really only personally claim he had the first.

As far as I am aware, the book was a moderate success in the 90s, but it didn’t make him rich. A few decades later, however, he’s one of the wealthiest people I know. He’s also one of the healthiest — and from what I can tell, he is happy to wake up every day because he spends his time doing what he wants to be doing.

That made the self-help book seem a little less “self-help-y” and more of a snapshot of a young man’s mental models for life that were empirically proven to be effective over time — which is more interesting.

There is a lot in the book — and I am purposefully not sharing the book title because the world I work in is small enough that I think some things would triangulate back towards my day-to-day self — but early on he focused on visualization and accountability around your goals.

For him, the key to tackling a new goal or skill or challenge was to first write down a description of the person you would need to be in order to achieve said goal. You are then supposed to read it over and over, and do that multiple times a day for multiple weeks.

After you have done that for a bit, you are supposed to tell someone else what your goal is and how you are tackling it. That creates accountability and social pressure — now, beyond just yourself, someone else knows that you are not yet the person who can achieve the goal they wish to achieve.

The combination of those two things mean you are constantly aware of this future person you want to become — a person who speaks Spanish fluently enough that people laugh when you say you aren’t native, a father whose son doesn’t miss him at night, a person with a large enough investment portfolio that they can retire at 50, and so on — and someone else expects to see you eventually become that person.

So, I laughed a little at the idea of actually writing down things like “I walk around with good posture. I can walk up a couple flights of stairs at work while talking to someone else without getting winded. I don’t get sick often. I look like I workout. I …” but I did it anyway. I had started and stopped exercise multiple times over the past decade, so what did I have to lose but the ink from the pen and the blank page in a notebook that hadn’t seen use since I got obsessed with fountain pen calligraphy for a period of time?

Once done, I then took the second piece of advice and texted that mentor to tell him what my goals were and who I was trying to become. I made a thoughtless comment that I would give him an update every Sunday.

And I regretted that immediately. The moment I hit send on that text, I felt a cold wave of fear pull itself into my core and lash out to turn my fingers numb as it dawned on me… that what I was about to do sounded terrible, and I didn’t really have a choice anymore.

I knew I wasn’t who I wanted to be. Someone else who I respected knew it too.

So, I got to work figuring out what exercise even was. I didn’t know how to exercise. Sure, in elementary school I ran… I had done push-ups before… but what were these “workout programs” and “super sets” and “calisthenics” and “interval runs” and so on.

I didn’t know… but I had to find out because someone — and me — expected me to figure it out.

And so, I started. I did two full body calisthenics workouts that first week… and every week thereafter for a couple months. And I didn’t realize what was about to happen to me.

Without consciously meaning to do so, within those first few weeks, I started pretending I was an athlete. I wasn’t, but man was I pretending. I was pretending so hard.

Other people noticed — and basically, they started pretending I was an athlete, too. Everyone was mistaken. We were all deluded. How did they have such short memories that the last three years of watching my slowly put on weight somehow didn’t hint at me being the exact opposite of an athlete?

But… did it matter?

I was asking athletic coworkers what shoes were their favorite to run in. What were their favorite running apps? — and then maybe I would chim in that I didn’t like the tracked metrics as much as this other app (what the hell did I know… I was running a 14 minute mile… but I like green text less than blue…).

Someone shot me a text when a set of dumbbells had gone on sale because they knew I was looking. That was funny — I didn’t know how to use dumbbells. When did I say I was looking for them? I bought them, and then woke up one morning driving to a personal trainer because I had no idea what to do with these dumbbells and someone needed to teach me.

I had no idea what I was doing. I was still pretending.

At work, I would mumble I was tired because I was up at 4:15am that morning, and someone would ask “Why?” “Oh, I run in the mornings” slipped out. “You’re a runner? Cool. I’ve never been able to do that.” I definitely wasn’t a runner, but what the hell… I guess I did run…

Soon I was bringing in pre-made lunches to work. Chicken. Rice. Broccoli. Carrots. "You bring your own lunch? Why do you do that?” “Easier to control what I eat.” “Oh, yeah, I wish I could make the time for that.” I was pretending I was an athlete, so I guess I had to watch I what I ate.

Then I find myself debating lifting approaches with ex-college athletes. What the hell did I know… but now we are talking about approaches to indoor cardio. I’m pretending I know what we are talking about.

And so on. I just kind of kept pretending I was something I was not — that I was an athletic, healthy, strong person. I wasn’t.

But, over the proceeding 18 months, I lost thirty pounds, stopped using an inhaler daily, cut my mile time in half, put back on ten healthy pounds, had to buy new pants so that they didn’t fall off my waist, and had to buy new shirts as my old ones were too tight around the back.

Am I a runner? No, not really. A powerlifter? No, not really. Any kind of athlete? No, not really.

But I am pretending — and to some considerable extent, that appears to be good enough.

One Short

Charlie Munger’s Bookshelf

Kevin over at Kingswell recently shared the attached picture of one of Charlie Munger’s bookshelves from an article in the Wall Street Journal earlier this month. Inspired by his call to identify as many of the books on the shelf as possible, I took a stab at doing so below. I also took advantage of Google’s Bard AI to help a bit.

The below is far from exhaustive — so if you see any that I have not called out, please leave a comment / shoot me an email so that I can add to the list.

  • Autobiography of Benjamin Franklin ($)

  • Capital (El Capital) by Karl Marx ($)

  • David Sarnoff: A Biography by Eugene Lyons ($)

  • Einstein by Walter Isaacson ($)

  • Go East Young Man by Justice William Douglas ($)

  • Great Short Biographies by B. H. Clark ($)

  • Harvard Classics: The Five Foot Shelf of Books (~1910 version, I believe) ($)

  • Influence by Cialdini ($)

  • Planck: Driven by Vision, Broken by War by Brandon Brown ($)

  • The Federalist by Jacob Cooke ($)

  • The Great American Newspaper: The Rise and Fall of the Village Voice by Kevin McAuliffe ($)

  • The Life and Letters of Walter H. Page by Burton Hendrick ($)

  • Will Rogers: The Man and His Times by Richard Ketchum ($)

($’s above take you to Amazon, which are affiliated links, meaning if you purchase them there I get a small commission)

One Poll

Before he passed away in November, did you know who Charlie Munger was?

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One Supporting

50 Charlie Munger Quotes

  1. “All I want to know is where I am going to die so I’ll never go there.”

    • I’ve always enjoyed this as just a fun quote to steal and use when talking alternative paths forward / decision making; I also wrote in more detail about the concept — called inversion — here, in Suppose I Wanted to Kill a Lot of Pilots.

  2. “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.”

  3. “There is no better teacher than history in determining the future… There are answers worth billions of dollars in a $30 history book.”

  4. “There’s no way that you can live an adequate life without many mistakes. In fact, one trick in life is to get so you can handle mistakes. Failure to handle psychological denial is a common way for people to go broke.”

  5. “It’s a good habit to trumpet your failures and be quiet about your successes.”

    • There are people that force this in a disingenuous way; however, it is rare that I meet anyone who is both successful and of the kind of character I respect that speaks often of their successes.

  6. “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.“

    • Mistakes of omission — not doing something and thus missing an opportunity — tend to be most painful. Not betting enough in situations where I knew I should go all in — whether that be with dollars, effort, focus, etc. — are the mistakes I think about most.

  7. “Even bright people are going to have limited, really valuable insights in a very competitive world when they’re fighting against other very bright, hardworking people. And it makes sense to load up on the very few good insights you have instead of pretending to know everything about everything at all times.”

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

  9. “The beauty of it is that you only have to get rich once. You don’t have to climb this mountain four times. You just have to do it once. “

    • Rich is relative to your own expectations, and frugality creates freedom.

  10. “And so my lesson to all of you is conduct your life so that you can handle the 50% decline with aplomb and grace. Don’t try to avoid it. It will come. In fact I would say if it doesn’t come, you’re not being aggressive enough.”

  11. “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.”

    • So, sounds like there is hope for me yet!

  12. “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. You’d be amazed at how much Warren reads — and at how much I read. My children laugh at me. They think I’m a book with a couple of legs sticking out.”

  13. “If all you have is a hammer, the world looks like a nail.”

  14. “To get what you want, you have to deserve what you want. The world is not yet a crazy enough place to reward a whole bunch of undeserving people.”

  15. “I always say the same thing: realistic expectations, which is low expectations. If you have unreasonable demands on life, you’re like a bird that’s trying to destroy himself by bashing his wings on the edge of the cage. And you really can’t get out of the cage. It’s stupid. You want to have reasonable expectations and take life’s results good and bad as they happen with a certain amount of stoicism.”

  16. “People need to ask, ‘How do I play the hand that has been dealt me?’ The world is not going to give you extra return just because you want it. You have to be very shrewd and hard working to get a little extra. It’s so much easier to reduce your wants. There are a lot of smart people and a lot of them cheat, so it’s not easy to win.”

  17. “Well, 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, people’s minds play tricks on them and they think it isn't really happening.”

  18. “We all start out stupid and we all have a hard time staying sensible. You have to keep working at it.”

  19. “I just try and avoid being stupid. I have a way of handling a lot of problems. I put them on what I call my too-hard pile and I just leave them there. I’m not trying to succeed in my too-hard pile.”

    • When it comes to thinking about investment decisions, this has been one of the more useful pieces of advice I’ve stolen from Munger in the last ten years. Somethings are just too hard to figure out — so move on and focus on others.

  20. “Spend each day trying to be a little wiser than you were when you woke up. Day by day, and at the end of the day-if you live long enough-like most people, you will get out of life what you deserve.”

  21. “Competency is a relative concept. What I needed to get ahead was to compete against idiots. And, luckily, there was a large supply.“

  22. “So you have to figure out what your own aptitudes are. If you play games where other people have the aptitudes and you don’t, you’re going to lose.”

  23. “What I would say is the single most important thing if you want to avoid a lot of stupid errors is knowing where you’re competent and where you aren’t, knowing the edge of your own competency. And that’s very hard to do, because the human mind naturally tries to make you think you’re way smarter than you are.”

  24. “As I always say, the iron rule of life is that only 20% of the people can be in the top fifth. That’s just the way it is.”

    • For me, this ties into the idea of relative competency — some people are better than you at some skills. Go spend more time doing the things where you are in the top fifth, and spend less time where you aren’t.

  25. “A lot of smart people think they’re way smarter than they are, and therefore they do worse than dumb people, if you ask me.”

  26. “However, averaged out, betting on the quality of a business is better than betting on the quality of management. In other words, if you have to choose one, bet on the business momentum, not the brilliance of the manager.”

  27. “If you go into a career that’s very tough you’re not going to do very well. And if you go into one where you have special advantages and you like the work, you’re going to do pretty well.”

  28. “When I was at Caltech, I took this course in thermodynamics from Homer Joe Stewart. By the way, a lovely human being and gifted beyond compare, and one thing I learned was that no matter how hard I would try, I could never be as good at thermodynamics as Homer Joe Stewart. And I think that is a very useful lesson. I knew what I could do and I couldn’t, and I never even considered trying to compete with the Homer Joe Stewarts in the world of thermodynamics.”

  29. “In fact if you look at Berkshire, take out a hundred decisions, which is like two a year. The success of Berkshire came from two decisions a year over 50 years.“

  30. “I have a friend who’s a fisherman. He says, ‘I have a simple rule for success in fishing. Fish where the fish are.’ You want to fish where the bargains are. That simple. If the fishing is really lousy where you are you should probably look for another place to fish.”

  31. “I’ve made bad business decisions. You can’t live a successful life without taking some, doing some different things that go wrong. That’s just the nature of the game. And you wouldn’t be sufficiently courageous if you tried to avoid every single reverse.”

  32. “Another thing of course is life will have terrible blows, horrible blows, unfair blows, doesn’t matter. And some people recover and others don’t. And there I think the attitude of Epictetus is the best… your duty was not to be submerged in self-pity but to utilize the terrible blow in a constructive fashion. That is a very good idea.”

  33. “Whenever you think that some situation or some person is ruining your life, [think that] it’s actually you who are ruining your life. It’s such a simple idea. Feeling like a victim is a perfectly disastrous way to go through life.”

    • Another near-and-dear idea that I’ve stolen from Munger and tried to work in my day-to-day life. Whatever reverse I feel like I am experiencing, focusing on how bad I feel never helps. Working to improve the things that are within my control while accepting what I cannot change is the fastest route to extricating myself from the negative siltation. It is easier to just feel bad for myself, so I mess this up more often than not.

  34. “If you just take the attitude that, however bad it is in anyway, it’s always your fault and you just fix it as best you can – the so-called ‘iron prescription’ – I think that really works.”

  35. “I suggest that every time you find you’re 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… It’s a ridiculous way to behave, and when you avoid it you get a great advantage over everybody else, almost everybody else, because self-pity is a standard condition and yet you can train yourself out of it.”

  36. “The idea that life is a series of adversities and each one is an opportunity to behave well instead of badly is a very, very, good idea. And I certainly recommend it to everybody in the room. And it works so well in old age because you get so many adversities you can’t fix. So you better have some technique for welcoming those adversities.”

  37. “Well it’s a very simple answer, they’re handling it with denial. They have a horrible problem they can’t fix, so they just treat it as nonexistent. This is a very stupid way to handle a problem. Now it may be good when you’re thinking about your own death which you can’t fix and it’s just denial all the way to the end. But in all the practical fields of life, a problem thoroughly understood is half solved or better coped with.”

    • Looking at my own experience making mistakes, denying that there is even a problem and kicking the can down the road ranks up there as a most common cause of error. It is so easy to just not accept that something is wrong — for a few years, that what I did with my health, as discussed above

  38. “I think that one should recognize reality even when one doesn’t like it; indeed, especially when one doesn’t like it."

  39. “Missing out on some opportunity never bothers us. What’s wrong with someone getting a little richer than you? It’s crazy to worry about this…”

  40. “In my life, to give another example, the Mungers would have twice the assets they now have if I hadn’t made one mistake of omission back in nineteen 70s. And…really stupid. I blew an opportunity that would have doubled my present net worth. That is a normal life. You get one or two. And how things work out.”

  41. “What the hell do I care if somebody else makes money faster? There’s always going to be somebody who is making money faster, running the mile faster or what have you. So in a human sense, once you get something that works fine in your life, the idea of caring terribly that somebody else is making money faster strikes me as insane.”

    • Hard advice to remember, but whenever I’m focusing on putting one foot in front of the other walking towards a better future for my family regardless of how fast others seem to be walking, things seem to work out better than expected in the medium term.

  42. “There are always people who will be better at something than you are. You have to learn to be a follower before you become a leader.”

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

  44. “Everybody uses new technology, but it really helps to have a position that almost can’t be taken away by technology.”

    • With all the inflation-related considerations over the last few years, I am reminded of Warren Buffett’s thoughts on how to defend against inflation as an individual: “The best thing you can do is to be exceptionally good at something. People are going to give you some of what they produce in exchange for what you deliver.”

  45. “Well, the first rule is that 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.”

  46. “Both of us prefer to make our money in association with people of merit.”

    • I recently read a blurb somewhere — I can’t find it now — about how a child’s friend group is more important than the parents’ specific parenting style when it comes to that child’s character and life outcomes (with lots of caveats, I think… for example, the parents’ style will dictate how the child picks friends, I would guess); I think that influence of those you spend time with never stops being a driving force in who you become over time regardless of your current age

  47. “Avoid evil.”

  48. “The young man knows the rules, and the old man knows the exceptions.”

  49. “We don’t train executives, we find them. If a mountain stands up like Everest, you don’t have to be a genius to figure out that it’s a high mountain.”

  50. “My personal bet is that these democracies will eventually borrow too much and cause some real troubles. I don’t know when.”

If you made it all the way down here, please take a moment to forward it to someone that might find it interesting — I appreciate your support greatly!

Have a great weekend,

— EJ

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