Munger on Money & fees

“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.