Charlie Munger’s quotations and pithy comments have come to be known as ‘Mungerisms.

’ Many
Mungerisms are witty one-liners and maxims that reflect Charlie Munger’s humbleness and
advocacy of elemental wisdom.

1. “I don’t spend much time regretting the past, once I’ve taken my lesson from it. I don’t dwell on it.”

2. “Opportunity cost is a huge filter in life. If you’ve got two suitors who are really eager to have you and
one is way the hell better than the other, you do not have to spend much time with the other. And
that’s the way we filter out buying opportunities.”

3. “In my whole life, nobody has ever accused me of being humble. Although humility is a trait I much
admire, I don’t think I quite got my full share.”

4. ” The investment game always involves considering both quality and price, and the trick is to get more
quality than you pay for in price. It’s just that simple.”
5. “Determine value apart from price; progress apart from activity; wealth apart from size.”

6. “Someone will always be getting richer faster than you. This is not a tragedy.”

7. “We’re the tortoise that has outrun the hare because it chose the easy predictions.”

8. “Remember that reputation and integrity are your most valuable assets – and can be lost in a
heartbeat.”

9. “Our ideas are so simple that people keep asking us for mysteries when all we have are the most
elementary ideas.”

10. “For society, the Internet is wonderful, but for capitalists, it will be a net negative. It will increase
efficiency, but lots of things increase efficiency without increasing profits. It is way more likely to
make American businesses less profitable than more profitable. This is perfectly obvious, but very
little understood.”

11. “People always underestimate the ability of earth to increase its carrying capacity.”

12. “I’m not entitled to have an opinion unless I can state the arguments against my position better than
the people who are in opposition. I think that I am qualified to speak only when I’ve reached that
state.”

13. “Over the very long term, history shows that the chances of any business surviving in a manner
agreeable to a company’s owners are slim at best.”

14. “We try more to profit from always remembering the obvious than from grasping the esoteric.”

15. “We have a history when things are really horrible of wading in when no one else will.”
16. “In the corporate world, if you have analysts, due diligence, and no horse sense, you’ve just described
hell.”

17. “Forgetting your mistakes is a terrible error if you are trying to improve your cognition.”

18. “Whenever you think something or some person is ruining your life, it’s you. A victimization
mentality is so debilitating.”

19. “Virtually every investment expert’s public assessment is that he is above average, no matter what is
the evidence to the contrary.”

20. “People have always had this craving to have someone tell them the future. Long ago, kings would
hire people to read sheep guts. There’s always been a market for people who pretend to know the
future. Listening to today’s forecasters is just as crazy as when the king hired the guy to look at the
sheep guts.”

21. “Intelligent people make decisions based on opportunity costs.”

22. ” Today, it seems to be regarded as the duty of CEOs to make the stock go up. This leads to all sorts of
foolish behavior. We want to tell it like it is.”
23. “Fixable but unfixed bad performance is bad character and tends to create more of itself, causing more
damage to the excuse giver with each tolerated instance.”

24. “We all are learning, modifying, or destroying ideas all the time. Rapid destruction of your ideas when
the time is right is one of the most valuable qualities you can acquire. You must force yourself to
consider arguments on the other side. If you can’t state arguments against what you believe better than
your detractors, you don’t know enough.”

25. “Above all, never fool yourself, and remember that you are the easiest person to fool.”

26. “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.”

27. “The best armor of old age is a well-spent life preceding it.”

28. “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.”

29. “The number one idea is to view a stock as an ownership of the business and to judge the staying
quality of the business in terms of its competitive advantage. Look for more value in terms of
discounted future cash-flow than you are paying for. Move only when you have an advantage.”

30. “If you buy something because it’s undervalued, then you have to think about selling it when it
approaches your calculation of its intrinsic value. That’s hard. But if you buy a few great companies,
then you can sit on your ass. That’s a good thing.”
31. “We get these questions a lot from the enterprising young. It’s a very intelligent question: You look at
some old guy who’s rich and you ask, ‘How can I become like you, except faster?”

32. “The more hard lessons you can learn vicariously rather than through your own hard experience, the
better.”

33. “Over the long term, it’s hard for a stock to earn a much better return that the business which underlies
it earns. If the business earns six percent on capital over forty years and you hold it for that forty years,
you’re not going to make much different than a six percent return – even if you originally buy it at a
huge discount. Conversely, if a business earns eighteen percent on capital over twenty or thirty years,
even if you pay an expensive looking price, you’ll end up with one hell of a result.”

34. “A lot of people with high IQs are terrible investors because they’ve got terrible temperaments. And
that is why we say that having a certain kind of temperament is more important than brains. You need
to keep raw irrational emotion under control. You need patience and discipline and an ability to take
losses and adversity without going crazy. You need an ability to not be driven crazy by extreme
success.”

35. “Almost all good businesses engage in ‘pain today, gain tomorrow’ activities.”

36. “Three rules for a career: 1) Don’t sell anything you wouldn’t buy yourself; 2) Don’t work for anyone
you don’t respect and admire; and 3) Work only with people you enjoy.”

37. “There is nothing more counterproductive than envy. Someone in the world will always be better than
you. Of all the sins, envy is easily the worst, because you can’t even have any fun with it. It’s a total
net loss.”

38. “A lot of success in life and business comes from knowing what you want to avoid: early death, a bad
marriage, etc.”

39. “Acquire worldly wisdom and adjust your behavior accordingly. If your new behavior gives you a
little temporary unpopularity with your peer group then to hell with them.”

40. “The ethos of not fooling yourself is one of the best you could possibly have. It’s powerful because it’s
so rare.”

41. “If you always tell people why, they’ll understand it better, they’ll consider it more important, and
they’ll be more likely to comply.”

42. “Acknowledging what you don’t know is the dawning of wisdom.”

43. “Checklist routines avoid a lot of errors. You should have all of this elementary wisdom, and you
should go through a mental checklist in order to use it. There is no other procedure that will work as
well.”

44. “Understanding how to be a good investor makes you a better business manager and vice versa.”
45. “Spend each day trying to be a little wiser than you were when you woke up. Discharge your duties
faithfully and well. Step by step you get ahead, but not necessarily in fast spurts. But you build
discipline by preparing for fast spurts. Slug it out one inch at a time, day by day. At the end of the day
– if you live long enough – most people get what they deserve.”

46. “I agree with Peter Drucker that the culture and legal systems of the United States are especially
favorable to shareholder interests, compared to other interests and compared to most other countries.
Indeed, there are many other countries where any good going to public shareholders has a very low
priority and almost every other constituency stands higher in line.”

47. “Everywhere there is a large commission, there is a high probability of a rip-off.”

48. “Develop into a lifelong self-learner through voracious reading; cultivate curiosity and strive to
become a little wiser every day.”

49. “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.”

50. “There are worse situations than drowning in cash and sitting, sitting, sitting. I remember when I
wasn’t awash in cash — and I don’t want to go back.”

51. “No CEO examining books today understands what the hell is going on.”

52. “Never, ever, think about something else when you should be thinking about the power of incentives.”

53. “There are some things you should pay up for, like quality businesses and people.”

54. “Avoid working directly under somebody you don’t admire and don’t want to be like.”

55. “The best thing a human being can do is to help another human being know more.”

56. “People calculate too much and think too little.”

57. “You’re looking for a mispriced gamble. That’s what investing is. And you have to know enough to
know whether the gamble is mispriced. That’s value investing.”

58. “It’s not given to human beings to have such talent that they can just know everything about
everything all the time. But it is given to human beings who work hard at it – who look and sift the
world for a mispriced bet – that they can occasionally find one. And the wise ones bet heavily when
the world offers them that opportunity. They bet big when they have the odds. And the rest of the time
they don’t. It’s just that simple.”

59. “Everybody engaged in complex work needs colleagues. Just the discipline of having to put your
thoughts in order with somebody else is a very useful thing.””
60. “We don’t care about quarterly earnings (though obviously we care about how the business is doing
over time) and are unwilling to manipulate in any way to make some quarter look better.”

61. “One of the great defenses if you’re worried about inflation is not to have a lot of silly needs in your
life — if you don’t need a lot of material goods.”

62. “There are a lot of things we pass on. We have three baskets: in, out, and too tough…We have to have
a special insight, or we’ll put it in the ‘too tough’ basket. All of you have to look for a special area of
competency and focus on that.”

63. “You can progress only when you learn the method of learning.”

64. “We’ve really made the money out of high quality businesses. In some cases, we bought the whole
business. And in some cases, we just bought a big block of stock. But when you analyze what
happened, the big money’s been made in the high quality businesses. And most of the other people
who’ve made a lot of money have done so in high quality businesses.”

65. “Experience tends to confirm a long-held notion that being prepared, on a few occasions in a lifetime,
to act promptly in scale, in doing some simple and logical thing, will often dramatically improve the
financial results of that lifetime. A few major opportunities, clearly recognizable as such, will usually
come to one who continuously searches and waits, with a curious mind that loves diagnosis involving
multiple variables. And then all that is required is a willingness to bet heavily when the odds are
extremely favorable, using resources available as a result of prudence and patience in the past.”

66. ” I know someone who lives next door to what you would actually call a fairly modest house that just
sold for $17 million. There are some very extreme housing price bubbles going on.”
67. “You must have the confidence to override people with more credentials than you whose cognition is
impaired by incentive-caused bias or some similar psychological force that is obviously present. But
there are also cases where you have to recognize that you have no wisdom to add — and that your best
course is to trust some expert.”

68. “If you get a lot of heavy ideology young — and then you start expressing it — you are really locking
your brain into a very unfortunate pattern.”

69. “We just throw some decisions into the ‘too hard’ file and go onto the others.”

70. “Intense interest in any subject is indispensable if you’re really going to excel in it.”

71. “Understanding both the power of compound return and the difficulty of getting it is the heart and soul
of understanding a lot of things.””

72. “Recognize reality even when you don’t like it – especially when you don’t like it.”

73. “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…”
74. “All intelligent investing is value investing – acquiring more than you are paying for. You must value
the business in order to value the stock.”

75. “In my life there are not that many questions I can’t properly deal with using my $40 adding machine
and dog-eared compound interest table.”

76. “Don’t confuse correlation and causation. Almost all great records eventually dwindle.”

77. “Most people are too fretful, they worry too much. Success means being very patient, but aggressive
when it’s time.”

78. “The safest way to try to get what you want is to try to deserve what you want. It’s such a simple idea.
It’s the golden rule. You want to deliver to the world what you would buy if you were on the other
end.”

79. “Assume life will be really tough, and then ask if you can handle it. If the answer is yes, you’ve won.”

80. “I find it quite useful to think of a free-market economy – or partly free market economy – as sort of
the equivalent of an ecosystem. Just as animals flourish in niches, people who specialize in some
narrow niche can do very well.”

81. “I would rather throw a viper down my shirt than hire a compensation consultant.”

82. “Thinking that what’s good for you is good for the wider civilization, and rationalizing foolish or evil
conduct, based on your subconscious tendency to serve yourself, is a terrible way to think.”

83. “There has never been a master plan. Anyone who wanted to do it, we fired because it takes on a life
of its own and doesn’t cover new reality. We want people taking into account new information.”

84. “You need a different checklist and mental models for different companies. I can never make it easy
by saying, ‘Here are three things.’ You have to derive it yourself to ingrain it in your head for the rest
of your life.”

85. “Just as a man working with his tools should know its limitations, a man working with his cognitive
apparatus must know its limitations.”

86. “If you don’t allow for self-serving bias in the conduct of others, you are, again, a fool.”

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

88. “Those who will not face improvements because they are changes, will face changes that are not
improvements.”

89. “Smart people aren’t exempt from professional disasters from overconfidence. Often, they just run
aground in the more difficult voyages they choose, relying on their self-appraisals that they have
superior talents and methods.”
90. “I’m right, and you’re smart, and sooner or later you’ll see I’m right.”

91. “Mimicking the herd invites regression to the mean.”

92. “I think track records are very important. If you start early trying to have a perfect one in some simple
thing like honesty, you’re well on your way to success in this world.”

93. ” A lot of opportunities in life tend to last a short while, due to some temporary inefficiency… For
each of us, really good investment opportunities aren’t going to come along too often and won’t last
too long, so you’ve got to be ready to act and have a prepared mind.”
94. “Warren spends 70 hours a week thinking about investing.”

95. “If all you succeed in doing in life is getting rich by buying little pieces of paper, it’s a failed life. Life
is more than being shrewd in wealth accumulation.”

96. “Well, some of our success we predicted and some of it was fortuitous.”

97. “What’s the best way to get a good spouse? The best single way is to deserve a good spouse because a
good spouse is by definition not nuts.”

98. “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.”

99. “You want to be very careful with intense ideology. It presents a big danger for the only mind you’re
ever going to get.”

100. “I try to get rid of people who always confidently answer questions about which they don’t
have any real knowledge.”