STREET DOGS

Charlie Munger on what it takes to be a good investor:

“It is remarkable how much of a long-term advantage people have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.”

“Look for a special area of competency and focus on that.”

“The game is to keep learning. You gotta like the learning process. There’s an apocryphal story about Mozart. A 14-year-old came to him and said, ‘I want to learn to be a great composer.’ And Mozart said, ‘You’re too young.’ The young man replied, ‘But I’m 14 years old and you were only eight or nine when you started composing.’ To which Mozart replied, ‘Yes, but I wasn’t running around asking other people how to do it.’”

“A lot of people with high IQs are terrible investors because they’ve got terrible temperaments. And that is why we say that having a certain kind of temperament is more important than brains. You need to keep raw irrational emotion under control. You need patience and discipline and an ability to take losses and adversity without going crazy. You need an ability to not be driven crazy by extreme success.”

“You have to understand maths. If you’re innumerate you’re going to be a klutz. The good thing about business is that you don’t have to know any higher maths.”

“You need to have a passionate interest in why things are happening. That cast of mind, kept over long periods, gradually improves your ability to focus on reality. If you don’t have the cast of mind, you’re destined for failure even if you have a high IQ.”

“You have to realise the truth of biologist Julian Huxley’s idea that ‘Life is just one damn relatedness after another’ So you must have the models, and you must see the relatedness and the effects from the relatedness.”