After Charlie Munger died on 28th November 2023 at the age of 99, there was a battle of quotes on Twitter like Here are 99 things I learned from Charlie Munger. All copied from Wikipedia and other sources; but Charlie was much more than that, Warren Buffet told him the smartest guy he had ever met so there must be something interesting about Charlie.

To quickly recap, Charles Thomas Munger (January 1, 1924 — November 28, 2023) was an American businessman, investor, and philanthropist. He was vice chairman of Berkshire Hathaway, the conglomerate controlled by Warren Buffett; Buffett described Munger as his closest partner and right-hand man. Munger served as chairman of Wesco Financial Corporation from 1984 through 2011. He was also chairman of the Daily Journal Corporation, based in Los Angeles, California, and a director of Costco Wholesale Corporation.

Today we will be discussing 5 of the greatest wisdoms of Charlie that influenced me.

To get what you want you need to deserve what you want

If you need a business partner or even a mentor don’t find them instead you deserve them and they will find you. There are a few things that money can’t buy like trust, admiration and success. They can only be earned and you have to deserve these.

Here, Shaan Puri the founder of Milk Road shares his personal story on how he chose not the highest offer but the highest quality people that he could sell his company Milk Road to; as selling to the best quality people will result in him in the long run. Even if he’s losing a dollar today he will make 3 more dollars in the long run.

So, the reason he sold his company to these guys was because these guys had a lot of experience in SEO and they had sold SEO-based companies, so Shaan wanted to learn about the secret juice of SEO that you can’t learn by searching on Google.

Those guys had no. 1 search result on the keyword “How to buy Gold online” Upon asking they said a very interesting thing, they said that one day they searched the keyword How to buy gold online and they were in 5th position, they had an honest conversation with themselves on what exactly google wanted.

Google wants a webpage that has all the information a user wants and doesn’t go anywhere else after visiting that. They printed the 1st,2nd,3rd and 4th search pages along with their 5th page and that was when they realised why would someone click on their page when there were better pages available.

Then they took inspiration from the top-ranking pages, updated their pages and made it a habit even though their ranking wasn’t improving they kept updating their pages better and better and eventually they got ranked no. 1.

So, there is no secret hack for SEO.

I don’t allow myself to have an opinion on anything if I don’t know the other side’s argument better than they do

This is one of the thoughts that affected me personally, I never had in-depth knowledge of things like the Hamas — Israel war and Politics, So, it’s better to not have an opinion if you don’t understand the other side better than they do about things they support.

Argue the other side better than they would argue for themselves.

Churchillian Self Confidence

Physically Munger was unimpressive; he had an elf-like face, pacy skin and glasses an inch thick, but he had a deep sense of ethics. Once he was asked if he could play the piano and Munger replied that I don’t know, I never tried, I probably could become a great piano player if I try, whereas most people would say that I can’t play piano.

This little mind shift changed everything. That was Churchillian self-confidence.

Avoiding stupidity is easier than seeking brilliance

This might seem like a normal piece of wisdom to you, but it has indeed a great meaning.

Other people spend their lives trying to be smart; all he is trying to do is not be idiotic. For Investing he would think How do I stop the great errors of investing or if it’s health how can I stop the great errors in being healthy?

Avoiding stupidity is easier than seeking brilliance

Optimise for the truth

Munger said “ It’s dangerous to rely too much on models and formulas, Reality is more complex than that.

It’s pretty ridiculous that people are biassed by both over-scepticism and over-optimism in the business world. Over-optimism puts your team morale down and puts you in a losing state of mind.

Always look for good decisions and good systems. Munger said you make a lot of money when you buy a good company at a good price but you make all of the money by letting it ride for 20 years. So, patience is where the big money is.

Shaan here puts his thoughts on hitting 70% of the goals you make for yourself. 

Hitting 0% of your goals means you are setting the wrong goals and hitting 100% of the goals means that you are paying it too safe.

Invert. Always Invert

It’s a way to think about problems backwards. Let’s assume you want to solve a common thing that people wanna ask, which you know is like “How do I be successful?”, “How do I be happy in life”. So, for these questions, there might be 1000 different answers but what Munger thought about it was different; to answer a question like how to be Happy he would invert by saying what was the sure path of misery and since most people are miserable they can easily say this and then inverting the answer will give the sure path of becoming Happy.

So,  Invert always invert

The world is not driven by greed. It’s driven by envy

People see their neighbour having a nice car or a nice physique. At first, they didn’t even know about that but when they see the same, Envy kicks in and drives them.

Here Sam Parr shares his thoughts on envy. He says that he loves reading books and he reads mostly biographies; when he reads biographies he always compares himself with other people’s biography. He checks their age at the time they achieved something and then compares it to his age to find whether he is less or more successful than him/her. Though this is a wrong move Sam does an awesome job of being vulnerable and admitting the truth.

Learn all the big ideas in your space

If you know the top 20 ideas of a space you will be better than 98% of the people. Like in economics, we all know about the supply-demand curve, as the supply increases the demand decreases and the prices also go down, it happens vice-versa.

As per Charlie you not only need to learn all the big ideas in a space but you also need to learn all the exceptions to that. For example, in Economics there are a few places where when the price decreases demand also decreases. Take Louis Vuitton if they lower their prices in the short term the sales will increase but no one will buy it in the long run.

The same is also applicable for defense items, where price = quality.

This is Navneet signing off from today’s blog.

Peace 🕊️