Today’s issue is dedicated to Charlie Munger, who unfortunately passed away this week at the age of 99. Munger was a huge inspiration and role model for investors and entrepreneurs all over the world, including yours truly. He stayed intellectually sharp right to the very end.
Munger produced a lifetime of wisdom and gems and generously shared his knowledge with everyone. I thought I’d share some of my favourite gems from Munger.
In no particular order…
Someone will always be getting richer faster than you. This is not a tragedy.
I legitimately remind myself of this quote anytime I feel FOMO. Envy is a powerful emotion, it’s completely natural, and all humans are subjected to it (unfortunately). The ability to resist FOMO, stay focused, and think long-term is a superpower. I’ve previously written more about my framework for dealing with FOMO.
There are actually people out there who don’t price everything as high as the market will easily stand. And once you figure that out, it’s like finding money in the street.
I’ve also previously written about why I’m obsessed with pricing power. In fact, the core thesis of my investment firm, Atlasview Equity, is investing strictly in businesses that have a degree of pricing power.
All good investing is value investing.
It’s just that some people look for value in strong companies and some people look for value in weak companies.
As a lifelong value investor, I couldn’t agree more with this quote. It’s easy to forget this though, especially when inundated with all sorts of speculative investment strategies (that all seem to work for temporary periods of time). Value investing is timeless.
Show me the incentive and I will show you the outcome
Classic Munger quote. This is applicable in not just business, but life in general. Incentives are powerful, and a great predictor of how people will respond/act. Want a specific outcome in your business/life/etc.? Incentivize for it. Sounds simple, but it works.
This 40-second clip of Munger where he proudly takes full credit for taking a business from $120m sales down to $20k:
I love this clip because of Munger’s (and Buffett’s) ability to laugh at themselves. It’s refreshing to see especially when you’re used to everyone (particularly on social media) only showcasing their wins, claiming everything they touch turns into gold, and boasting about how they are crushing it 24/7. Everyone makes mistakes and takes losses but only a few can genuinely laugh about them.
Finally, this 37-second clip of Munger talking about the Patels and why he’d never compete with them in the motel business:
Munger is seen displaying humility to know where he can and can’t compete. It’s just overall a funny clip. I’ve previously featured the Patel Motel Cartel about a year ago.
Rest in peace Charlie Munger. Thank you for everything. You, and your neverending wisdom, will be missed.