“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.” “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.
“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?” “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.” “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.
“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.” “People calculate too much and think too little.” Genuinely his and stably worded; the exact meeting and year are not pinned.
“I have nothing to add.” A decades-long catchphrase — a recurring meeting line, not a single occasion.
“If you mix raisins with turds, they're still turds.” On dot-com speculation and bad acquisitions.
“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.
“I would rather throw a viper down my shirtfront than hire a compensation consultant.” “As for the corporation consultants who advise on salaries, all I can say is that prostitution would be a step up for them.” “Whatever you think you know about technology, I think I know less.” “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.” “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.” “I also want to say proudly that we have no mission statement.” “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.'
“I have avoided all my life compensation consultants. I hardly can find the words to express my contempt.” “Valeant, of course, was a sewer. Those who created it deserve all the opprobrium that they got.” “We've got people who know nothing about stocks being advised by stockbrokers who know even less.” “We would never trade money for misery.” “Microeconomics is what we do, and macroeconomics is what we put up with.” “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.
“If you see the world accurately, it's bound to be humorous, because it's ridiculous.” “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.
“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.'
“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.
“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.'
“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.
“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.” “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.
“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.'
“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.'
“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.'
“The one thing we've always guaranteed is that the future will be a lot worse than the past.” “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.” “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.” “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.'” “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.
“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.” “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.” “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.” “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.
“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.
“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'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 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.
“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).
“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.
“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).
“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.
“I'll pay $2.5 million not to read it.” Munger's line, recounted by Buffett (who later retold the figure as $2 million).
“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.
“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.
“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.
“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 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.
“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.” “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.” “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.” “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.” “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.” “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 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.” “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.
“Those are not hard sciences, finance and economics. And finance really attracts people who should have gone into snake charming.” “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.
“The game of life is a game of everlasting learning. At least it is if you want to win.” “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 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 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 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.
“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.
“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.
“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.
“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.'
“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.” “Our current problems are quite confusing. In fact, if you aren't confused, I don't think you understand it very well.” “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.
“My final word of advice would be, if this gives you a little temporary unpopularity in your peer group, the hell with them.” “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.
“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.
“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.
“The board is a safety valve in case I go completely crazy and Warren doesn't do anything about it.” From Tilson's notes.
