Review: Poor Charlie’s Almanack: The Wit and Wisdom of Charles T Munger

Author: Foreword by Warren E Buffett Edited by Peter D Kaufman

I am still trying to figure out how to be in the world.  Charles Munger (Warren Buffet’s silent business partner) gives an account of what he believes made him and Buffet so successful in business (and life).  Contained in the book are the importance of good ethics and the importance of arming yourself with tools of thinking.  The method gave his speaking notes from 11 speeches he gave throughout his career.

Munger is at pains to say he has never taken a course in contemporary psychology because he believes that a lot of the good stuff is ignored or the wrong empathises is given to certain results (no argument there).  He tells his own practical theories about human psychology, the most valuable of which is the final speech where he gives his 25 reasons that lead to human misjudgement.  I intend to go over these reasons again.  Maybe one a week, constantly until I know them by heart and that they can be the basis by which I question my own thinking.

He encourages the reader to read widely for (investing) wisdom and has a great list of selected readings for further study.  He discourages becoming too narrow in one’s interests (got a hammer, see a nail).  When it comes to making wealth always play the long game (better a great company at a fair price, than a fair company at a great price).  Avoid consultants and experts (their advice is likely to be self-serving).  I have learned to stay close to what I know (Property, Indexed Shares, and Mental Health).  If you do not understand it, steer clear (with your money at least, but it might be an opportunity for learning).