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Why were Warren Buffett and his creation, Berkshire Hathaway, so unusually successful?
In 2007 Wesco Annual Meeting, someone asked the above question from Charlie Munger. He replied –
If that success in investment isn’t the best in the history of the investment world, it’s certainly in the top five. It’s a lollapalooza.
Lollapalooza in the conventional sense means something outstanding of its kind. A person, a thing or an event that is particularly impressive, or extraordinarily attractive. But being multidisciplinary learners, we shouldn’t be satisfied with the conventional definitions, should we? Moreover, Charlie Munger doesn’t use lollapalooza just for its dictionary meaning.
Here’s the definition of Lollapalooza taken from the book Poor Charlie’s Almanack –
Lollapalooza is, as personified by Charles Munger, the critical mass obtained via a combination of concentration, curiosity, perseverance, and self-criticism, applied through a prism of multidisciplinary mental models.
When Charlie Munger uses the word lollapalooza, he often attaches the word “effects” (as in “lollapalooza effects”) which means that multiple factors are acting together in ways that are feeding back on each other. [Read more…] about Latticework of Mental Models: Lollapalooza Effect