Source: Kigaku Club
Introduction:
Buffett once said, “Munger designed today's Berkshire Hathaway, which is his most important achievement. The blueprint he gave me was simple: 'Investing in an excellent company at a reasonable price has far better results than buying an ordinary business at a bargain price... 'That's all, Berkshire Hathaway was built according to Munger's blueprint. My role is the general contractor, and the CEO of Berkshire Hathaway's subsidiary is the subcontractor.”
As a meteorologist and lawyer from a college background, Munger had never been exposed to economics, marketing, finance, or accounting in college. How did he become the greatest business genius?
I. Investor mentality training
1. It's more useful to know what you don't know than to be smart.
2. Admitting ignorance is the beginning of wisdom.
3. People try to be smart, and I just want to prove I'm not doing anything stupid, but this is far more difficult than many people think.
4. Use quantitative means to find profitable deals. Once we get past the shackles of our minds and rerealize what might have shocked Graham, then we can begin to think about better investment opportunities.
5. My success stems from my long-term focus.
6. Waiting will help you become an investor, yet most people can't wait.
7. “You have to be very patient, you have to wait until something happens, and you won't find that the price you paid was worth it.”
This sentence is against humanity. No one can sit around and do nothing all day; it's just a matter of waiting. But it's easy for us because we have so many other things to do.
However, for an average person, can you imagine him sitting for 5 years and doing nothing? You feel that you are not motivated enough, that you have no value to speak of, and even more that you have done a foolish thing.
8. I think investors need to face up to the actual situation of the company, even if you are unwilling; in fact, especially when you are unwilling to do so, you should do this even more.
9. There was a time when no one wanted to enter the market, but we started investing. That feeling was really bad.
10. Successful investing requires both aggressiveness and patience, as well as being prepared to seize opportunities as they arise, because in a world where opportunities don't last long.
11. Every century, there will always be situations where the market falls by more than 50% two or three times. If you cannot face all of this calmly, then you are unfit to be a common shareholder. Compared to those who are more assertive and more calm about market fluctuations, you deserve mediocre results.
12. When we were young, we didn't know what things would expand our investment horizons until we met Isca. Isca is the kind of company we would never consider buying when we were young; at the time, we just knew we were looking for the right partners. This is an amazing business, ready for everything. Isn't it okay that we keep studying? It's not too late to make up for the dead.
II. Investors' Misconceptions
1. Following the flow will only bring you closer to the average.
2. Forecasting has never been my strong suit, and I don't rely on accurate predictions to make money. Often we just buy good companies and keep holding them.
3. The desire to become rich overnight is quite dangerous.
4. As an investor, Graham learned many lessons from the market. The collapse and the Great Depression, which almost destroyed him, shaped his philosophy of evaluating companies, and left him with lingering feelings for the rest of his life. All his methods are aimed at getting rid of this feeling.
5. Try not to make stupid mistakes instead of being as smart as possible. Investors with a long-term advantage have reaped unimaginable benefits from this. As the ancient proverb says, “River water drowns people.”
6. I adore diversified investments. I think this idea is crazy.
7. From the point of view of the failed business decisions I have seen throughout my life, paying too much attention to tax savings is one of the main reasons for making stupid mistakes... From now on, my advice is not to participate in any investment projects that anyone has recommended to you about tax savings.
8. As you can see in Berkshire Hathaway's operations, we prefer a conservative approach. We borrow less money on more favorable terms. We're happy to lower our leverage. You can think we're wrong. Although this makes us less money, we are not bothered by it. We never feel bad about missing out on certain opportunities. What's wrong with other people being richer than you? It is unfounded to be distressed about this.
9. In the corporate world, if you have a group of analysts who have no common sense but are responsible for due diligence, then you are in hell.
10. Wherever there are high commissions, there is a high possibility of fraud.
3. The wisdom of learning
1. This is an experience in my life. If you can maintain the habit of thinking and reading, you don't need to go to work.
2. There is no single rule for getting rich through investment. You need to know a lot about business, humanity, and numbers; don't expect an amazing system to do this for you.
3. In any of the past years, if you haven't overturned your favorite idea once, then this year is a waste.
4. At the end of each day, try to be more intelligent than when you woke up in the morning. Perform your duties faithfully and excellently, and improve a little bit every day. Ultimately, if they live long enough, most people will reap the rewards they deserve.
5. Master valuable ideas in important subject areas and use them frequently. Remember to use them in combination, not just one part of them.
6. I like people who can honestly admit they're stupid. I know I'll perform better if I acknowledge my mistakes positively. This is a great learning tip.
7. One can live a comfortable life without making mistakes, but this is not realistic. In fact, one trick in life is to learn how to handle mistakes. Inability to handle “psychological conflict” is a common reason why many people end up bankrupt.
8. I agree most with the way Ibequted sees things. He believes that every missed opportunity in life is an opportunity to exercise and study. What you have to do is not sink in self-pity, but use these bad blows constructively. This is a very correct point of view.
9. In my life, there is not a single wise person I know who does not study all the time. When you know how much Buffett and I read, you'll definitely be shocked. My kids laugh at me; they think I'm actually just a book with two legs.
10. Buffett is one of the greatest learning machines on this planet. After age 65, Buffett's investment skills improved markedly. Looking at his entire investment career, I can tell you that if Buffett stayed at his early level of knowledge, then it would be impossible for him to achieve such brilliant results as he is now.
11. If you already have the level of intelligence required by a mature person of mind, then you are capable of surpassing those who are smarter than you. As long as you draw the most critical points of knowledge from all the different subject areas, not just a few, you'll be far smarter than them.
12. In my life, I have met many people who have achieved a great deal. Although they are neither the smartest people, nor even the most hardworking, they are all very good learners. They are smarter every night when they go to sleep than when they wake up, kid, that's important, especially when you're facing the long run of life.
13. Extreme specialization is the key to success. Most people are better at one area than they are at understanding the world at large.
14. Look at this generation. They have electronic devices and can multitask at the same time, yet I can confidently conclude that they are not as good as Buffett, who only focuses on reading. If you want to have wisdom, you have to calm down and read. This is the right way to gain wisdom.
15. We are always constantly learning, revising, and abandoning our ideas. Giving up one's original ideas in a timely manner is one of the most valuable qualities. You have to teach yourself to think empathically.
16. If you can't explain your opponent's point of view more clearly than your opponent, then you can't say you have an opinion you are proud of. This is an important mental training.
17. Those with more qualifications than you may be affected by motivational biases or other similar psychological factors that affect their cognitive abilities. In this case, you need to have the courage to reverse their decisions. Of course, there are situations where you have to admit that you don't know something, and the best way to do this is to trust a professional.
18. I always keep my distance from people who don't really understand the questions but are full of confidence when they answer them.
19. I think those who multitask at the same time have paid a lot of money.
20. In economics, for example, most people are trained in a single model, trying to use one approach to solve all problems. There is a saying, “For a person with a hammer, seeing everything is like a nail.” This way of solving problems is stupid.
21. I think extreme ideological systems can bind people's minds, and this must be avoided.
IV. Life Experience
1. The surest way to get something you want is to make yourself worthy of it.
2. Maintaining reason is a moral imperative. Don't be silly when you shouldn't be stupid.
3. Mozart's life ruined by madness is a perfect example. Because of his unrivaled talent, his achievements were enough to stand out from the crowd, yet from the beginning, his life was quite miserable. He spent his whole life struggling to make ends meet, which made him extremely miserable.
4. I've never had much success in areas I'm not interested in. If you can't be interested in certain things no matter what, then it's hard for you to be very successful, even if you're very smart.
5. The best way to fight aging is to live a good life before getting old.
6. In marriage, you should not look for a partner with a good appearance and personality. You need to lower your expectations to find a partner.
7. Someone once asked me who contributed the most to my personal happiness in my life, and I said, “This is very simple; this is my wife's first husband.”
8. Eat whatever you want. There are no taboos. I've never cared about my health, and I've never done any exercise I don't want to do. If there's anything I've achieved, it's mainly because I keep thinking deeply... and some people think jogging or other sports can improve them and give them strength.
9. Three rules for a career: 1. Don't sell things you don't want to buy; 2. Don't work for people you disrespect and appreciate; 3. Only work with people you like.
10. The highest form of civilization is to form a seamless network with a strong sense of trust — no process is required, just reliable people trust each other... In your own life, you would also like to have such a seamless network full of trust. If your marriage agreement is 47 pages full, then I suggest you don't get married anymore.
11. Oh, dealing with people you trust and keeping others out of your life is a useful approach. It should be seen as a guide to life... smart people steer clear of people who are like rat poison, after all, there are so many such people in life!
12. I like you because you remind me of myself. Who doesn't love being stared at by his own image?
13. Remember Louis Vincenti's rule: “Tell the truth, you don't have to keep thinking about the lies you've told.”
14. I had the best legal experience when I was still very young. I once asked my dad why, as a lawyer, he didn't work for his best friend Grant Macfadden, but instead did so much for a bragging fool. The father replied, “The man you call the bragger is a bonanza that often gets into legal disputes; and McFadden can handle problems quickly while being kind to people, so he rarely gets into trouble with the law.”
15. All people work better when they have what psychologists call strengthening. If it continues to be rewarded, even Buffett will respond. Keep this in mind and find your path to success by positively strengthening the people around you.
16. When you face an unbelievable disaster, never let one disaster turn into two, or even three, because of a breakdown of will.
17. In the long run, great civilizations can also be surpassed. You should understand how civilizations are declining.
18. Life always hurts someone in some way and helps others in some way. In the face of life's shocks, everyone should respond positively. A man should be like this and confront his dissatisfaction in life openly. Don't always complain, and don't expect complaints to solve problems.
19. As I get older, I become more experienced. I'm like this person: He jumps down from a skyscraper and as he descends to the fifth floor, he says, “It's been a great trip so far.”
20. If you have invested in Buffett for 40 years, then you have no right to complain even if he is no longer useful to you.
21. If you're worried about inflation and don't need too many items, then one of the most effective protective measures is that you don't have too many ridiculous needs in your life.
22. It's no use spending time worrying about things you can't handle. If you always feel that terrible things are going to happen when managing your money, then I suggest you can choose to be a stupid optimist for the rest of your life.
23. Director Kendall of the Michigan Conservatory of Music once told me a story. As a child, Kendall was in charge of running a candy stand. His father saw him eat a piece of sugar from the stall. Kendall said, “Don't worry; I'll add another one.”
Her father said, “This way of thinking will ruin you. It might be better for you if you take everything you want and directly admit you're a thief every time.”
24. Um, are envy and jealousy two of the Ten Commandments? For people who have raised children, run a school, run a law firm, or an investment bank, do you know what envy means? I've heard Buffett say many times: “What drives the world forward is not greed, but envy.”
Editor/jayden