Top Charlie Munger quotes: ... much of what is taught in modern corporate finance courses is twaddle

Charles Thomas Munger (January 1, 1924 – November 28, 2023) was vice-chairman of Berkshire Hathaway Corporation, the diversified investment corporation chaired by investor Warren Buffett.

Quotes on Wikiquote:

– Obviously, you have to know accounting. It's the language of practical business life. It was a very useful thing to deliver to civilization. I've heard it came to civilization through Venice which of course was once the great commercial power in the Mediterranean. However, double-entry bookkeeping was a hell of an invention.

And it's not that hard to understand.

But you have to know enough about it to understand its limitations — because although accounting is the starting place, it's only a crude approximation. And it's not very hard to understand its limitations. For example, everyone can see that you have to more or less just guess at the useful life of a jet airplane or anything like that. Just because you express the depreciation rate in neat numbers doesn't make it anything you really know.

– ... much of what is taught in modern corporate finance courses is twaddle.

– You have to learn all the big ideas in the key disciplines in a way that they're in a mental latticework in your head and you automatically use them for the rest of your life. If you do that, I solemnly promise you that one day you'll be walking down the street and you'll look to your right and left and you’ll think "my heavenly days, I'm now one of the few competent people in my whole age cohort." If you don't do it, many of the brightest of you will live in the middle ranks or in the shallows.

– Our investment style has been given a name - focus investing - which implies ten holdings, not one hundred or four hundred. The idea that it is hard to find good investments, so concentrate in a few, seems to me to be an obvious idea. But 98% of the investment world does not think this way. It's been good for us.

– You can't give the average Wall Street CEO really lenient standards of accounting and expect the figures to be good. The accountant is like the referee in soccer. The accountant has to be the adult that prevents the mayhem. Accountants don't want to be the adults because it causes liability, it causes responsibility, it causes difficulty ... they failed us terribly.

– How do these super-smart people with all these degrees and higher mathematics end up doing these dumb things? I think it's explainable by the old proverb that to the man with a hammer every problem looks pretty much like a nail. They've learned these techniques and they just twist the problem so it fits the solution — which is not the way to do it.

– Neither Warren nor I have ever used any fancy maths in business — and neither did Ben Graham who taught Warren. Everything I have ever done in business could be done with the simplest algebra and geometry and addition and multiplication and so forth. I never used calculus for any practical work in my whole damn life — and I was a perfect whiz at it when they taught it to me.

– I see [Bitcoin as] an artificial speculative medium that people are buying just because they think they can sell it to somebody else at a higher price, even though it inherently has no intrinsic value. So, I regard the whole business as anti-social, stupid, immoral. [...] I regard the thing as a combination of dementia and immorality, and I think the people that are pushing it are a disgrace.

– ... I regard it as a cinch that a great nation will in due time be Rome. ... Where is Rome? Where is Britain in its heyday? They all pass and so our turn is bound to come some day.

– I don't think that she knows who Adam Smith was.

– What I would say is the single most important thing, if you want to avoid all the stupid errors, is knowing where you're competent and where you aren't. And that's very hard to do because the human mind naturally tries to make you think you're way smarter than you are.

- You fix what can be fixed, and what can't be fixed you endure.

- We don't want to make our money selling things that are bad for people.

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