The quotes were originally posted on 25iq. This article covers Munger's quotes on topics that begin with the letter P.
PANIC:
“When you have a huge convulsion, like a fire in this auditorium right now, you do get a lot of weird behavior. If you can be wise [during such h times, you'll profit].
PASSION:
What matters most: passion or competence that was born in? Berkshire is full of people who have a peculiar passion for their own business. I would argue passion is more important than brain power.
PATIENCE:
“Most people are too fretful, they worry to much. Success means being very patient, but aggressive when it's time.”
“If you took the top 15 decisions out, we'd have a pretty average record. It wasn't hyperactivity, but a hell of a lot of patience. You stuck to your principles and when opportunities came along, you pounced on them with vigor. With all that vigor, you only made a decision every two years. We do more deals now, but it happened with a relatively few decisions and staying the course for decades and holding our fire until something came along worth doing.”
“We just keep our heads down and handle the headwinds and tailwinds as best we can, and take the result after a period of years.”
We just throw some decisions into the “too hard” file and go onto others.
We don't feel some compulsion to swing. We're perfectly willing to wait for something decent to come along.” “We're rich in relation to the business that we're doing. “In certain periods, we have a hell of a time finding places to invest our money. We are in such a period.”
The art of waiting without tiring of waiting.”
“It is occasionally possible for a tortoise, content to assimilate proven insights of his best predecessors, to out run hares which seek originality or don't wish to be left out of some crowd folly which ignores the best work of the past. This hap pens as the tortoise stumbles on some particularly effective way to apply the best previous work, or simply avoids standard calamities. We try more to profit by always remembering the obvious than from grasping the esoteric. It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.”
PEOPLE:
“When you have doubts about a person, you can pass,” he said. “There's enough nice people to interface with.”
“You know the cliché' that opposites attract? Well, opposites don't attract. Psychological experiments prove that's it's people who are alike that are attracted to each other. Our minds [his and Buffett's] work in very much the same way.”
“It's amazing how few times over the decades we've have to remove a person — far less than other companies. It's not that we're soft or foolish, it's that we're wiser and luckier. Most people would look back and say their worst mistake was not firing someone soon enough.
PERFORMANCE:
“Don't confuse correlation and causation. Almost all great records eventually dwindle…”
PESSIMISM:
“Is there such thing as a cheerful pessimist? That's what I am.”
PHIL FISHER:
“I always like it when someone attractive to me agrees with me, so I have fond memories of Phil Fisher. The idea that it was hard to find good investments, so concentrate in a few, seems to me to be an obviously good idea. But 98% of the investment world doesn't think this way.
PHILANTHROPY:
“Those of us who have been very fortunate have a duty to give back. Whether one gives a lot as one goes along as I do or a little and then a lot [when one dies] as Warren does is a matter of personal preference. I would hate to have people ask me for money all day long.
“Is anyone really surprised that Warren, who is the ultimate embodiment of concentrated decision-making power, picked somebody [Bill and Melinda Gates] who he thinks is like him in many important ways? It was a noble and sensible decision.”
PHYSICS:
“The tradition of always looking for the answer in the most fundamental way available — that is a great tradition, and it saves a lot of time in this world.”
PLANNING:
“There has never been a master plan. Anyone who wanted to do it, we fired because it takes on a life of its own and doesn't cover new reality. We want people taking into account new information.”
“Strategic plans cause more dumb decisions than anything else in America.”
POKER:
“Life in part is like a poker game, wherein you have to learn to quit sometimes when holding a much loved hand.”
“Playing poker in the Army and as a young lawyer honed my business skills … What you have to learn is to fold early when the odds are against you, or if you have a big edge, back it heavily because you don't get a big edge often.”
POOR CHARLIE'S ALMANACK:
“This book was a crazy thing to have done, and not everyone will like it, but what the hell.”
PRICE:
“We bought a doomed textile mill [Berkshire Hathaway] and a California S&L [Wesco] just before a calamity. Both were bought at a discount to liquidation value.”
“Wrigley is a great business, but that doesn't solve the problem. Buying great businesses at advantageous prices is very tough.”
“If you can buy the best companies, over time the pricing takes care of itself.”
“The investment game always involves considering both quality and price, and the trick is to get more quality than you pay for in price. It's just that simple.
PRICING POWER:
“There are actually businesses, that you will find a few times in a lifetime, where any manager could raise the return enormously just by raising prices—and yet they haven't done it. So they have huge untapped pricing power that they're not using. That is the ultimate no-brainer. … Disney found that it could raise those prices a lot and the attendance stayed right up. So a lot of the great record of Eisner and Wells … came from just raising prices at Disneyland and Disneyworld and through video cassette sales of classic animated movies… At Berkshire Hathaway, Warren and I raised the prices of See's Candy a little faster than others might have. And, of course, we invested in Coca-Cola—which had some untapped pricing power. And it also had brilliant management. So a Goizueta and Keough could do much more than raise prices. It was perfect.”
PRIORITIES:
“Trying to prioritize among things we're unlikely to do is pretty fruitless.”
PREDICTIONS:
Berkshire is in the business of making easy predictions. If a deal looks too hard, the partners simply shelve it.”
“We're the tortoise that has outrun the hare because it chose the easy predictions.
PREPARATION:
“Opportunity comes to the prepared mind.”
“A lot of opportunities in life tend to last a short while, due to some temporary inefficiency… For each of us, really good investment opportunities aren't going to come along too often and won't last too long, so you've got to be ready to act and have a prepared mind.”
PRIVATE EQUITY:
“In the 1930s, there as a stretch here you could borrow more against the real estate than you could sell it for. I think that's what's going on in today's private-equity world.”
PROBLEMS:
“Some people seem to think there's no trouble just because it hasn't happened yet. If you jump out the window at the 42nd floor and you're still doing fine as you pass the 27th floor, that doesn't mean you don't have a serious problem.”
“Let me know what your problem is, and I will try to make it more difficult for you.”
PROSPECT THEORY:
“I mean people are really crazy about minor decrements down. And then, if you act on them, then you get into reciprocation tendency, because you don't just reciprocate affection, you reciprocate animosity, and the whole thing can escalate. And so huge insanities can come from just subconsciously over-weighing the importance of what you're losing or almost getting and not getting.”
PROSPECTUS:
“Any time anybody offers you anything with a big commission and a 200-page prospectus, don't buy it. Occasionally, you'll be wrong if you adopt “Munger's Rule”. However, over a lifetime, you'll be a long way ahead—and you will miss a lot of unhappy experiences.”
PSYCHOLOGY:
“The elementary part of psychology the psychology of misjudgment, as I call it is a terribly important thing to learn. There are about 20 little principles. And they interact, so it gets slightly complicated. But the guts of it is unbelievably important. Terribly smart people make totally bonkers mistakes by failing to pay heed to it. In fact, I've done it several times during the last two or three years in a very important way. You never get totally over making silly mistakes. There's another saying that comes from Pascal which I've always considered o¬ne of the really accurate observations in the history of thought. Pascal said in essence, “The mind of man at o¬ne and the same time is both the glory and the shame of the universe.”
PUBLIC COMPANY:
“…the cost of being a publicly traded stock has gone way, way up. It doesn't make sense for a little company to be public anymore. A lot of little companies are going private to be rid of these burdensome requirements….”
PURPOSE:
“That I've profited from being shrewd with money is not by itself satisfying to me. To atone, I teach and try to set an example. I would hate it if the example of my life caused people to pursue the passive ownership of pieces of paper. I think lives so spent are disastrous lives. I think it's a better career if you help build something. I wish I'd built more, but I was cursed at being so good at stock picking. ‘The man is the prisoner of his talents.' You can laugh, but I'll bet this room is full of people who are prisoners of their talents. It tends to be the human condition.”
