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Charlie Munger on Bitcoins, Banking, AI, and Life

I recently attended the annual shareholder meeting of Daily Journal Corp, a publishing company based in Los Angeles, US. I am not a shareholder in DJCO, but this was a chance to hear the 94-year old Charlie Munger, who is its chairman and director.

Mr. Munger answered questions from the audience for around two hours – on wide-ranging topics like bitcoins, banking, artificial intelligence, and life – including one from me (see below). Here are excerpts from the notes prepared by Adam Blum (see the link to entire notes at the bottom of the post).

On searching for ideas – The two rules of fishing are to fish where the fish are, and don’t forget the first rule. Investing is the same thing. In some places, no matter how good a fisherman you are, you won’t do well. Life is a long game. Take it as comes and do the best you can, and if you live to an old age, you will get your full share of opportunities, which will be two in total, maybe, but seize one of the two, and you will be alright.

On personal success – Approach life like [Thomas] Carlyle, and get up every day doing the best you can. Marry the right person. Everyone here who’s your age will do well. You’re not that mad at the world; instead you’re trying to cope with how to make it a little better. If you were here with placards shouting, you wouldn’t have bright future. Avoid extremely intense ideology, because it ruins your mind. The kids with the placards are pounding the idiocy in instead of shouting it out.

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Latticework of Mental Models: Hot Hand Fallacy

One of the most embarrassing moments of my childhood was the day when my class teacher asked me something about Sachin Tendulkar. I replied, “Who is Sachin Tendulkar?”

I was in 6th standard. The entire class, including the teacher, burst into laughter. That was the day when I started taking an active interest in cricket. Of course, the motivation was to avoid looking like a fool in a cricket crazy nation.

“Dravid is not in form these days.” Claimed one of my friends.

“I hope he comes back in form soon else they will drop him from the national team.” Argued other friend.

I nodded in agreement. I was faking because one thing that still baffled me was the idea of a player being “in-form” or “out-of-form.”

“What’s this in-form and out-of-form business?” I asked my best friend. Typically, looking-like-a-fool fear goes away when you’re with your best buddies, right? He was the only one who I didn’t feel the need to impress with my cricket knowledge.

Well, if a player plays consistently well for many innings, we say he is in good form. Otherwise, he is considered out of form, he explained, “An in-form player is always in demand because he’s expected to continue playing well.”

Why does an in-form player play well? If it’s the past performance that determines the present form then how does it ensure the future performance? Isn’t this form business based on circular logic?

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Dealing with Stock Market’s Moments of Terror

I received this Whatsapp message from a friend recently, where he wanted my opinion on the post-Budget crash in Indian stocks and how to deal with the same… My friend’s message reminded me of Howard Marks’ Feb. 2016 memo to clients, where he described the situation in the stock market then – My buddy Sandy […]

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Latticework of Mental Models: Naive Realism

Let me start by inviting you to have an intellectual and emotional experience. Take a few seconds and stare at the picture below. Observe closely. What do you see? You’d probably see a woman who is looking away from you. You may notice that she is wearing a necklace. She seems to have high cheekbones, long […]

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Safal Niveshak’s Value Investing Workshop – International

Time flies. It’s already been over six years since I started Safal Niveshak in mid-2011. Even the journey of my Value Investing Workshops is about to complete six years. So far, I’ve completed 70+ workshops across 15+ cities in India, covering 3,000+ investors. And it’s been a wonderful experience. Over these years, I have also […]

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My Interview with Kenneth Jeffrey Marshall

Note: This interview with Kenneth Jeffrey Marshall was originally published in the November 2017 issue of our premium newsletter – Value Investing Almanack (VIA). To read more such interviews and other deep thoughts on value investing, business analysis and behavioral finance, click here to subscribe to VIA. Kenneth Jeffrey Marshall is an American value investor, […]

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The Art of Asking Good Questions

Two hunters are out in the jungle when suddenly one of them collapses. His pulse is gone and his eyes are glazed. The other guy yanks out his cell phone and calls the emergency services. He gasps, “My friend is dead! What should I do?” The operator says “Calm down, sir. I can help. First, […]

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The Wisdom of Intelligent Investors (Special E-Book)

If the history of stock market is anything to go by, investors often make decisions that can undermine their ability to build long-term wealth. As such, it is often very valuable to look back in history and study closely the principles that have guided the investment decisions of some of the best minds and practitioners […]

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