Friday, September 11, 2009

Charlie Munger on...

Intrinsic Value
"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 $%@. That's a good thing." - Charlie Munger at the 2000 Berkshire Annual Shareholder Meeting

Investment Banks
"The general culture of investment banking has deteriorated over the years. We did a $6 million deal years ago for Diversified Retailing and we were rigorously and intelligently screened. The bankers cared and wanted to protect their clients. The culture now is that anything that can be sold for a profit will be. 'Can you sell it?' is the moral test, and that's not an adequate test." - Charlie Munger at the 2002 Berkshire Annual Shareholder Meeting

"A money manager with an IQ of 160 and thinks it's 180 will kill you," he said. "Going with a money manager with an IQ of 130 who thinks it's 125 could serve you well." - Charlie Munger in San Francisco Business Times

"The hedge fund known as 'Long Term Capital Management' collapsed...through overconfidence in its highly leveraged methods, despite I.Q.'s of its principals that must have averaged 160. 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." - Charlie Munger in Philanthropy Magazine

"You need to have a passionate interest in why things are happening. That cast of mind, kept over long periods, gradually improves your ability to focus on reality. If you don't have the cast of mind, you’re destined for failure even if you have a high IQ." - Charlie Munger at the 2002 Berkshire Annual Shareholder Meeting 

South Korea
"I would regard Korean culture and what they've created as one of the most remarkable in the history of capitalism. We don't think it's an accident that Iscar discovered Korea. If you try to find 10 countries better than Korea … you won't get through one hand. We are huge admirers of Korea." - Charlie Munger at the 2006 Berkshire Hathaway Shareholder Meeting

The good news is that Charlie rarely holds back.


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