Invest Like the Best #355 - A Conversation with Charlie Munger & John Collison
Invest Like the Best #355 - A Conversation with Charlie Munger & John Collison
Nothing further to add.
On avoiding asininity
Well, the conventional financial world is pretty reliable if you want to use electrical engineering or automobile transportation or a lot of things. But in the messy world of running businesses and institutions and so forth, the conventional religion is asinine. And my theory from the very beginning was I wanted to eliminate all the most conventional asininity. And I saw that if I could just do that, I'd have an advantage over most people. And so I collected asinine as things I should avoid.
On Probability
I saw instantly, for instance, when I was introduced to the math of Pascal and elementary probability, I saw immediately how important this math was. My math teacher had no idea that he'd come to a part of math that was very important in the fragile world to everybody. But I saw it immediately and I just utterly mastered it. And I used it. I'm still using it. I used it routinely all my life quite intensely.
On win-win businesses
My idea is so simple is that if you make your living selling things to other people that are good for them, that is safer and more profitable, averaged out and selling them stuff that's bad for them, like gambling, drugs, crazy religions, all kinds of things that are terrible for people. And so of course you want to sell things that are good for them.
On competency
Why the hell would I play against other people in a game where they're much better at than I am when I'm playing for something desperately important to me like my way of feeding my family. So of course we didn't go near it. I would argue that in practical life you want to succeed. You got to do two things. You got to have a certain amount of competence and you have to know what you know and what you don't know. You have to know the edge of your competency. And if you know the edge of your competency you're a much safer thinker and a much safer investor than you are if you don't know it. And I constantly meet people better to have an IQ of 160 and think it's 150.
On having children early in life
It's very constructive to help other people and everybody feels pretty good about these own children. To have a lot of responsibility and bear it well, I think helps people.
On Happiness
So early marriage and big families and believing in religion that is somewhat hard to believe in terms of its technical theology is very good for the occupants in terms of their personal happiness. I'm not interested in believing something I don't believe in, just to be happier, I'm a peculiar person that way. I have no doubt in my mind at all that the Mormons all average out happier than the rest of us. I just live with it.
On societal expectations
I'm used to things, not working perfectly. And so why should I expect my society is always going to be marching upwards because it has for a long time. I believe you just adjust to whatever society turns out to be and you do the best you can and that's all you can do and that's all I'm going to do.
On architecture
And you get things like dorms at MIT where people actually would go into the dorm and get seasick because all the walls are slanted and massively stupid. MIT has a school of architecture. And a place that's so stupid they build a dormitory where all the walls are slanted so much over to get seasick. And that really happened at MIT. So I think schools of architecture, they have a lot of folly to regret. It's not necessary for architecture to be as stupid as some of its dead denizens are.
peculiarity by itself is not art in my opinion
On multidisciplinary thinking applied to architecture
Yeah, they pay $20,000 a week to be on the ship and so forth. And they don't want a little light. They walk out of the ship and go into one of the common rooms. And of course that's what I arranged. They do in the dorm. So I was following correct precedence from marine architecture. But show me an architect that's learned anything from marine architect. I think you could go into any school or architecture in the country and you won't find anybody studying marine architecture. They think it has nothing to do with it. It has a lot to do with what they're doing. If you don't look, you won't find.
On inventing your own destruction
Go through Africa when I was young. There are two things you always saw, Coca-Cola and Kodak. That was the brands all over Africa from the poorest villages. And of course, Kodak went totally broke because somebody invented a new way of taking photographs and developing photographs. And it just absolutely did their whole damn business. And Kodak wiped out its common shareholders. That happens all the time, that kind of thing. And you can't blame the management for it and say why didn't Kodak invent its own destruction. That's hard to do for human nature.
On Berkshire’s business most emblematic of win-win
Take Dairy Queen. We have all these little shacks. Pretty far North where they're just open in the summertime.
Because you're not doing so much ice cream in the winter. All the parents come and get their cheap hot dogs and ice cream cones and so forth. And the people who own the little shack make pretty good money in the summertime. It's win-win.
Customers are getting something they want. The people who are managing the store get something they want. Of course, the Berkshire shareholders get some capital returns that they like. It's all win-win.
Of course, I'd rather do business that way.
On having fans in China and India
I think it's peculiar that these high IQ nerds in China and India love me. In my own country, people think I’m a pompus old bastard.
On excluding things because they are beneath you
You don't want to do all the business that's legal for you to do. You want to exclude all kinds of things because it's beneath you. It shows that you work at these things intelligently. It gets hard but it doesn't get impossible.
On Lee Kuan Yew
He was probably the greatest nation builder that ever exists in terms of quality of leadership.
Figure out what works and do it. Figure out what doesn't work and avoid it. He just was relentless. That's all he did.
So as far as I'm concerned, the politician who looks the most like Poor Charlie’s Almanac is Lee Kuan Yu and I'm not surprised that he got ahead better than any other nation builder that ever lived.