Tags

, , , , , , , , , , , ,

Most octogenarians are shunned, wasted or both. Charlie Munger, among the few exceptions, has a cult following. He is intelligent, wise, & candid. The fact that he has become extraordinarily wealthy by developing his own shrewd investing philosophy lends additional aura, respect & attention. He is a man of few words and shuns publicity.

So, on the rare occasion when he speaks, its time to sit tight & lap it up.

A few gems from his commencement speech at USC Law School in 2007, on ideas & attitudes that worked well for him.

directory-229117_960_720


…the idea that the safest way to try and get what you want, is to try and deserve what you wantIt’s such a simple idea, it’s the golden rule so to speak.

…there is no love that’s so right as admiration based love, and that love should include the instructive dead.

wisdom acquisition is a moral duty, it’s not something you do just to advance in life.

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 when they got up and boy does that help particularly when you have a long run ahead of you.

…you can progress only when you learn the method of learning.

if you take Warren Buffett and watched him with a time clock, I would say half of all the time he spends is sitting on his ass and reading. And a big chunk of the rest of the time is spent talking one on one either on the telephone or personally with highly gifted people whom he trusts and who trust him.

I noted since the really big ideas carry 95% of the freight, it wasn’t at all hard for me to pick up all the big ideas in all the big disciplines and make them a standard part of my mental routines.

Once you have the ideas of course they are no good if you don’t practice. You don’t practice you lose it.

So I went through life constantly practicing this model of (multi-)disciplinary approach. Well I can’t tell you what that’s done for me, it’s made life more fun, it’s made me more constructive, it’s made me more helpful to others, it’s made me enormously rich, you name it, that attitude really helps.

I always obeyed the drift of my nature and if other people didn’t like it I didn’t need to be adored by everybody.

…when I talk about this multidisciplinary attitude I’m really following a very key idea of the greatest lawyer of antiquity, Marcus Tullius Cicero. Cicero is famous for saying, “a man who doesn’t know what happened before he was born goes through life like a child”. That is a very correct idea of Cicero’s. And he’s right to ridicule somebody so foolish as not to know what happened before he was born.But if you generalize Cicero as I think one should, there are all these other things that you should know in addition to history and those other things are the big ideas in all the other disciplines. And it doesn’t help you just to know them enough just so you can *unclear* them back on an exam and get an A. You have to learn these things in such a way that they’re in a mental latticework in your head and you automatically use them for the rest of your life.

If you do that I solemnly promise you that one day you’ll be walking down the street and look to your right and left and think, “my heavenly days! I’m now one of the few most competent people of my whole age forward. If you don’t do it, many of the brightest of you will live in the middle ranks or in the shallows.

The way complex adaptive systems work and the way mental constructs work; problems frequently get easier and I would even say usually are easier to solve if you turn around in reverse. In other words if you want to help India, the question you should ask is not “how can I help India?”, you think “what’s doing the worst damage in India? What would automatically do the worst damage and how do I avoid it?” You’d think they are logically the same thing, they’re not. Those of you who have mastered algebra know that inversion frequently will solve problems which nothing else will solve. And in life, unless you’re more gifted than Einstein, inversion will help you solve problems that you can’t solve in other ways.

…to use a little inversion now, what will really fail in life? What do you want to avoid? Such an easy answer – sloth and unreliability. If you’re unreliable it doesn’t matter what your virtues are, you’re going to crater immediately. So doing what you have faithfully engaged to do should be an automatic part of your conduct. You want to avoid sloth and unreliability.

Another thing I think should be avoided is extremely intense ideology because it cabbages up one’s mind. …if you’re young it’s easy to drift in to loyalties and when you announce that you’re a loyal member and you start shouting the orthodox ideology out what you’re doing is pounding it in, pounding it in and you’re gradually ruining your mind so you want to be very careful with this ideology. It’s a big danger.

I have what I call an iron prescription that helps me keep sane when I naturally drift toward preferring one ideology over another. And that is I say “I’m not entitled to have an opinion on this subject unless I can state the arguments against my position better than the people do who are supporting it. I think only when I reach that stage am I qualified to speak.”

Another thing of course that does one in is the self serving bias to which we are all subject. You think that your little me is entitled to do what it wants to do…

Generally speaking, envy, resentment, revenge and self pity are disastrous modes of thought, self-pity gets pretty close to paranoia, and paranoia is one of the very hardest things to reverse, you do not want to drift into self-pity.

…a self serving bias, you want to get out of yourself, thinking that what’s good for you is good for the wider civilization and rationalizing all these ridiculous conclusions based on the subconscious tendency to serve one’s self. It’s a terribly inaccurate way to think and of course you want to drive that out of yourself because you want to be wise not foolish.

You also have to allow for the self-serving bias of everybody else, because most people are not gonna remove it all that successfully, the only condition being what it is. If you don’t allow for self serving bias in your conduct, again you’re a fool.

You don’t want to be in a perverse incentive system that’s causing you to behave more and more foolishly or worse and worse. Incentives are too powerful a controller of human cognition and human behavior 

Perverse associations, also to be avoided. You particularly want to avoid working directly under somebody you really don’t admire and don’t want to be like. It’s very dangerous we are all subject to control to some extent our authority figures strictly authority figures that are rewarding us. And that requires some talent, the way I solved that is I figured out the people I did admire and I maneuvered cleverly without criticizing anybody so I was working entirely under people I admired.

Darwin paid special attention to disconfirming evidence particularly to disconfirm something he believed and loved. Well objectivity maintenance routines are totally required in life if you’re going to be a correct thinker. And they were talking about Darwin’s attitude, special attention to the disconfirming evidence, and also to checklist routines. Checklist routines avoid a lot of errors. You should have all this elementary wisdom and then you should go through and have a checklist in order to use it. There is no other procedure that will work as well.

I realized very early that non-egality would work better in the parts of the world I wanted to inhabit. I think the game of life in many respects is getting a lot of practice into the hands of the people that have the most aptitude to learn and the most tendency to be learning machines. And if you want the very highest reaches of human civilization that’s where you have to go.

…an intense interest of the subject is indispensable if you are really going to excel. I could force myself to be fairly good in a lot of things, but I couldn’t be really good in anything where I didn’t have an intense interest, so to some extent you’re going to have to follow me. If at all feasible you want to drift into doing something in which you really have a natural interest.

…have a lot of assiduity. I like that word because it means sit down in your ass until you do it.

…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. He thought that every mischance in life was an opportunity to behave well, every mischance in life was an opportunity to learn something and 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.

All my life I’ve gone through life anticipating trouble and here I am well along on my 84th year and like Epictetus I’ve had a favored life. It didn’t make me unhappy to anticipate trouble all the time and be ready to perform adequately if trouble came. It didn’t hurt me at all. In fact it helped me

In your own life what you want is a seamless web of deserved trust.


 

Charlie Munger Speech – Video

Poor Charlie’s Almanack

 

Advertisements