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First things first. I wish you and your family a very happy, peaceful, and blessed 2023.
I am grateful to have you share this journey with me in the past, and look forward to continuing our connection in the years ahead.
Now for a story from the life of Charlie Munger, who is 99 years old today.
I have shared this story countless times over the years, because each time I talk or write about it, I experience a sense of inner peace and strength. And so, even if you have read this story earlier, read it again today as you begin taking your first steps into this brand new year.
This story dates long before Charlie was rich and famous, and before he had such a large and happy family –
Image Source: Poor Charlie’s Almanack; Photograph is of Charlie celebrating his forty-fifth wedding anniversary with his family in 2001
The story dates to 1953 when Charlie, then 29 years old, got divorced from his wife of eight years. Divorce had a huge social stigma attached at that time and it was the first blow for Munger.
His wife also got almost everything in the separation, including the house. Charlie’s friends revealed that he moved into “dreadful” conditions after this divorce.
He, however, summoned all his courage, worked crazy all week to recover the money lost in the divorce. This was, however, just the beginning and life had to still test him out further.
A year later, Charlie’s 8-year-old son Teddy, was diagnosed with leukemia (blood cancer). He scoured the medical community but quickly discovered the disease was incurable. He and his ex-wife sat in the leukemia ward with the other parents and grandparents in different stages of watching their children waste away. Also, given that there was no medical insurance in those days, Charlie paid for everything out-of-pocket.
As per his friends, each day he would take Teddy to the hospital for checkups while taking care of his other two children and practicing law. Those months were the toughest as he saw his son growing weaker nearing his death.
According to his friend Rick Guerin, Charlie would visit the hospital when his son “was in bed and slowly dying, hold him for a while, then go out walking the streets of Pasadena crying.”
One year after the diagnosis, Teddy Munger passed away at the tender age of 9, leaving Charlie heartbroken.
Charlie was 31 years old, divorced, broke, and burying his young son. It would have been tempting to just give it all up and turn to vices (alcohol, drugs) as so many people around him had done at that time. But Charlie was not that man and he kept going.
Years later, he reflected on the inner turmoil that he could’ve given in to and said –
Generally speaking, envy, resentment, revenge, and self-pity are disastrous modes of thought. Self-pity gets pretty close to paranoia…Every time you find your drifting into self-pity, I don’t care what the cause, your child could be dying from cancer, self-pity is not going to improve the situation. It’s a ridiculous way to behave.
Life will have terrible blows, horrible blows, unfair blows, it doesn’t matter. Some people recover and others don’t. There I think the attitude of Epictetus is the best. He thought that every mischance in life was an opportunity to behave well. Every mischance in life was an opportunity to learn something and that your duty was not to be immersed in self-pity, but to utilize the terrible blow in a constructive fashion. That is a very good idea.
The power of that speech is more memorable to me because Charlie never mentioned the fact that his own son died of cancer.
Anyways, life’s tests continued for Charlie, and at the age of 52, he developed cataracts. A failed surgery left him blind in one eye and caused complications like cancer. His blind eye pained so intensely that he couldn’t stand up. Desperate to end it, he got the doctor to remove his entire eye.
Now, when you are an obsessive reader like Charlie, losing your ability to see would seem to be a prison sentence. However, he was undeterred. He told someone close to him, “It’s time for me to learn braille.”
One of the most life-changing books I have ever read is Viktor Frankl’s Man’s Search for Meaning. The book is a chronicle by Frankl of his experiences as a German Nazi concentration camp inmate during World War II.
In this book, Frankl describes his psychotherapeutic method, which involved identifying a purpose in life to feel positively about, and then immersively imagining that outcome.
The central theme of Frankl’s book is ‘survival.’ Although he witnessed and experienced horror, the book focuses less on the details of his own experience and more on how his time under Nazi rule showed him the human ability to survive and endure against all odds.
As Frankl wrote, he saw the lowest parts of humanity while in the camps. He saw fellow prisoners promoted to be in-camp guards turning on their fellow prisoners. He watched as they beat their lifeless, malnourished campmates. He watched sadistic guards treating them as if they were lower than animals. But he also saw individuals rising up like saints above it all.
The part that impacted me the most from the book was this –
When we are no longer able to change a situation, we are challenged to change ourselves…Everything can be taken from a man but one thing: the last of the human freedoms — to choose one’s attitude in any given set of circumstances, to choose one’s own way.
Life (investing included) isn’t easy. And unlike, what we imagine in both scenarios of triumphs and disasters, life isn’t supposed to move in a straight line of happiness and smiles, or sadness and pain. It’s not supposed to stay the same, just like you’re not supposed to stay the same.
Life is evolving and changing. It is a constant surge of ups and downs, twists and turns, and as Rudyard Kipling said, “…triumphs and disasters.” Like you have your happy and blissful moments, you are supposed to feel pain, get hurt, and experience losses occasionally. And some of them can be really bad!
Now, that does not mean that you deserve every bit of the sadness, defeats, and tragedies that life hands over to you. It’s just part of the journey that we are walking through. It’s just part of what makes us human.
You see, when we read the fairytale stories of the likes of Munger and Buffett’s lives, and those of the countless other people we think are happy and prosperous today, it is easy to assume they have risen to success on one upward, smooth trajectory. But what we don’t see is the years of hard work, sweat and blood, sometimes tragedies, it has taken to get to where they are today.
Charlie has been able to get ahead as a result of his persistence, carrying on after he was divorced, broke, burying his son, and losing an eye.
It is important to remember this when you think life has been unfair to you and you indulge in self-pity.
Before I close, here is Charlie’s reply when a shareholder asked him in the 2013 AGM of Daily Journal Corp how does one recover from the reverses in investing and not dwell much on them –
You know what Rudyard Kipling said? Treat those two imposters just the same success and failure. Of course, there’s going to be some failure in making the correct decisions. Nobody bats a thousand. I think it’s important to review your past stupidities so you are less likely to repeat them, but I’m not gnashing my teeth over it or suffering or enduring it. I regard it as perfectly normal to fail and make bad decisions. I think the tragedy in life is to be so timid that you don’t play hard enough so you have some reverses.
If there is one big lesson we can take from Charlie’s life, apart from the one on being a learning machine, it is that we must pick ourselves up after every meltdown we suffer (in investing included). We must also know that all our struggles and all our failures will lead us to experience something greater and lead us to be someone better.
Then let’s begin all over again. And find the courage to stand up, and face today with just as much hope as we had yesterday.