"If you think your IQ is 160 but it’s 150, you’re a disaster. It’s much better to have a 130 IQ and think it’s 120."
Source: Berkshire Hathaway 2009 meeting via The Daily Beast
"We recognized early on that very smart people do very dumb things, and we wanted to know why and who, so we could avoid them."
Source: Berkshire Hathaway 2007 meeting via Buffett FAQ
"Invest in a business any fool can run, because someday a fool will. If it won't stand a little mismanagement, it's not much of a business. We're not looking for mismanagement, even if we can withstand it."
Source: Berkshire Hathaway 2009 meeting via Buffett FAQ
"Obviously if you want to get good at something which is competitive, you have to think about it and practice a lot. You have to keep learning because [the] world keeps changing and competitors keep learning. You have to go to bed wiser than you got up. As you try to master what you are trying to do — people who do that almost never fail utterly. Very few have ever failed with that approach. You may rise slowly, but you are sure to rise."
Source: Berkshire Hathaway 2010 meeting via Buffett FAQ
"You'll do better if you have passion for something in which you have aptitude. If Warren had gone into ballet, no one would have heard of him."
Source: Berkshire Hathaway 2008 meeting via Buffett FAQ
"What do you want to avoid? Such an easy answer: sloth and unreliability. If you're unreliable it doesn't matter what your virtues are. You're going to crater immediately. Doing what you have faithfully engaged to do should be an automatic part of your conduct. You want to avoid sloth and unreliability."
Source: Charlie Munger's USC Law Commencement Speech, May 2007
"Life will have terrible blows in it, horrible blows, unfair blows. It doesn't matter. And some people recover and others don't. And there I think the attitude of Epictetus is the best. He thought that every missed chance in life was an opportunity to behave well, every missed chance in life was an opportunity to learn something, and that your duty was not to be submerged in self-pity, but to utilize the terrible blow in constructive fashion. That is a very good idea."
Source: Charlie Munger's USC Law Commencement Speech, May 2007
"Well, opportunity cost is a huge filter in life. If you've got two suitors who are eager to have you, but one is way better than the other, you're going to choose that one rather than the other. That's the way we filter stock buying opportunities. Our ideas are so simple. People keep asking us for mysteries, but all we have are the most elementary ideas."
Source: Berkshire Hathaway 1997 meeting via Buffett FAQ
"Generally speaking, envy, resentment, revenge and self-pity are disastrous modes of thought. Self-pity gets fairly close to paranoia, and paranoia is one of the very hardest things to reverse. You do not want to drift into self-pity. ... Self-pity will not improve the situation."
Source: Charlie Munger's USC Law Commencement Speech, May 2007
"It reminds me of the young guy who went up to Mozart and said, 'I'd like to write symphonies.' When Mozart said, 'You're too young,' the young man replied, 'But you were young when you started.' Mozart pointed out, 'Yes, but I wasn't asking anyone else for advice on how to do it.'"
Source: Berkshire Hathaway 2006 meeting via Buffett FAQ
"I met the towering intellectuals in books, not in the classroom, which is natural. I can't remember when I first read Ben Franklin. I had Thomas Jefferson over my bed at seven or eight. My family was into all that stuff, getting ahead through discipline, knowledge, and self-control."
Source: "Damn Right!: Behind the Scenes with Berkshire Hathaway Billionaire Charlie Munger"
"Students learn corporate finance at business schools. They are taught that the whole secret is diversification. But the exact rule is the opposite. The 'know-nothing' investor should practice diversification, but it is crazy if you are an expert. The goal of investment is to find situations where it is safe not to diversify. If you only put 20% into the opportunity of a life-time, you are not being rational. Very seldom do we get to buy as much of any good idea as we would like to."
Source: Berkshire Hathaway 2008 meeting via Buffett FAQ
Ninety-nine percent "of the troubles that threaten our civilization come from too optimistic accounting. And yet these damn accountants with their desire for mathematical purity want to devote exactly as much attention to accounting that is too pessimistic as they do to accounting that is too optimistic — which is crazy. [Ninety-nine percent] of the problems come from being too optimistic. Therefore, we should have a system where the accounting is way more conservative."
"The liabilities are always 100% good. It's the assets you have to worry about."
Source: 2008 Wesco Financial annual meeting, quoted in Stanford Business School paper
"Another thing that does one in, of course, is the self-serving bias to which we're all subject. You think the 'True Little Me' is entitled to do what it wants to do. And, for instance, why shouldn't the True Little Me overspend my income. There once was a man who became the most famous composer in the world but was utterly miserable most of the time, and one of the reasons was because he always overspent his income. That was Mozart. If Mozart can't get by with this kind of asinine conduct, I don't think you should try."
Source: Charlie Munger's USC Law Commencement Speech, May 2007
"Ben Graham was a truly formidable mind, and he also had a clarity in writing, and we talk over and over again about the power of a few simple ideas thoroughly assimilated, and that happened with Graham's ideas which came to me indirectly through Warren, but some also directly from Graham. The interesting thing for me is that Buffett the former protégé — by the way Buffett was the best student Graham had in 30 years of teaching at Columbia — became better than Graham. That's the natural outcome — as Milton said, 'If I've seen a little farther than other men, it's by standing on the shoulders of giants.' So, Warren stood on Ben's shoulders, but he ended up seeing more than Ben. No doubt somebody will come along and do a lot better than we have."
Source: Berkshire Hathaway 1997 meeting via Buffett FAQ
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