- He's an American business magnate, lawyer,
investor and philanthropist.
He's vice chairman of Berkshire Hathaway
the investment company chaired by Warren Buffett.
He has a net worth of 1.3 billion dollars.
He's Charlie Munger and here are his
top ten rules for success.
(airplane flying)
(basketball bounce)
- The other great secret
is that we're good at lifelong learning.
Warren is so much better in some ways
in his 70s and 80s than he was younger
that it's almost awesome.
If you keep learning all the time you have
a huge advantage.
And we both just like it.
- And we have a wonderful group of friends.
Really wonderful (mumbling).
- Well luckily I got at a very early age
the idea that the safest way to try
and get what you want is to try and deserve what you want.
It's such a simple idea
it's the golden rule so to speak you
you want to deliver to the world what you would buy
if you were on the other end.
There is no ethos
in my opinion that is better for any lawyer
or any other person to have by.
And by and large the people who have this ethos
when in life and they don't win just money,
just honors and emollient once
they win the respect, the deserved trust
of the people they deal with.
And there is huge pleasure in life to be obtained
from getting deserved trust.
And so and the way to get it is to deliver
what you'd want to buy if the circumstances
were reversed.
One of these guys at the Berkshire meeting
from one of the foreign publications said
quite a couple of guys in a little place in Omaha do so
much better than all these powerful minds
and great institutions.
And I said, "Well I think Warren and I know
"the edge of our competency better than other people do."
And that's humility and an umbrella sense
and that is a very important thing to know.
I say over and over again
it's not a competency if you don't know the edge of it.
You were a disaster if you don't know
the edge of your own competency.
Why I'm frequently says I'd rather deal with a guy
with an IQ of 130
who thinks it's 125.
Than the guy with the IQ of 180 who thinks it's 200.
(laughing)
That second guy will kill you.
(laughing)
And and so it is very important to
know the edge of your own competency.
It's not my nature
when you get little surprises as a result of human nature
to spend much time feeling betrayed.
I'm always want to just put my head down
on it just so I don't allow myself to
spend much time ever with any feelings
of betrayal.
So you're asking the wrong person because
of a if some flickering idea like that came to me
I'd get rid of it quickly.
I don't like any feeling of being victimized I think that's
a counterproductive way to think as a human being.
I am not a victim
I'm a survivor.
I listened in law school when some wag said
a legal mind is a mind
that when two things are
all twisted up together
and interacting it's feasible
to think responsibly about one thing and not the other.
Well I could see from that one sentence that that was
perfectly ridiculous and it pushed me further into
my natural drift.
Which was into learning all the big ideas
and all the big disciplines so I wouldn't be a perfect
damn fool who was trying to think about
one aspect of something that couldn't be removed
from the totality of the situation
in a constructive fashion.
And what I noted since the really big ideas
carry 95% of freight there wasn't
at all hard for me to pick up all the big ideas
in all the disciplines and make them a standard part
of my mental routines.
Once you have the ideas of course
they're no good if you don't practice,
if you don't practice you lose it.
So I went through life constantly practicing this
Malo disciplinary approach.
Well I can't tell you what that's done for me.
It's it's it's made life more fun,
it's made me more constructive,
it's made me more helpful to others,
it's made me enormously rich
you name it.
That attitude really helps.
We have to deal in things that
we're capable of understanding.
And then once we're over that filter we have to have
a business with some intrinsic characteristics
that give it a durable competitive advantage.
And then of course we would vastly prefer a management
in place with a lot of integrity and talent.
And finally no matter how wonderful it is
it's not worth an infinite price.
So we have to have a price that makes sense
and gives a margin of safety considering
the natural vicissitudes of life.
That's a very simple set of ideas
and the reason that our ideas have not spread faster
is they're too simple.
The professional classes can't
justify their existence if that's all I have to say.
We have this system where we translate very
trustworthy people and give them enormous trust.
And as they practice that trust they get more confirmed
in being trustworthy.
And eventually we've got this seamless web of trust
which is incredibly efficient and very useful.
And by the way this is not just my doctrine
there's a doctrine economics that tries to explain
why firms come into existence.
And firms come into existence because a lot of people
who trust one another operating within a firm
are more efficient than they would be if they were
a bunch of independent proprietors.
I'm really following a very key idea
of the greatest lawyer of antiquity.
Marcus Tullius Cicero and Cicero is famous for
saying a man who doesn't know
what happened before he's born
goes through life like a child.
That is a very correct idea of Cicero's
and he's right to ridicule somebody
so foolish as not to know what happened before he was born.
But if you generalize Cicero as I think one should
there are all these other things that you should know
in addition to history.
And those other things are the big ideas
and all the other (mumbling) ones.
And it doesn't help you just to know them enough
so you could prattle them back on an exam and get an A.
You have to learn these things in such a way
that they're in a mental lattice work in your head
and you automatically use them for the rest of your life.
If you do that I solemnly promise you that one day
you'll be walking down the street and
you look to your right and left you'll think,
my heavenly days I'm now one of the
few most competent people of my whole age covert.
Where have I have not made our way in life
by making successful macroeconomic predictions
and betting on our conclusions.
Our system is to
swim as competently as we can
and sometimes the tide will be with us
and sometimes it will be against us.
But by and large we don't much bother with trying to predict
the tides because we plan to play the game
for a long time.
I recommend to you all of exactly the same attitude.
It's kind of a snare and a delusion to
outguess macroeconomic cycles.
Very few people do it successfully
and some of them do it by accident.
And the game is that tough why not adopt the other system
of swimming as competently as you can
and figuring that over a long life
you'll have your share of good tides and bad tides.
Life will have terrible blows, horrible blows,
unfair blows.
It doesn't matter
and some people recover and others don't.
And and there I think the attitude of (mumbling)
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
and construct a finish.
- Thank you guys so much for watching.
I made this video because Dom Aviation channel
asked me to.
So if there's a famous entrepreneur that you
want me to profile next leave it in the comments below
and I'll see what I can do.
I'd also love to know which of Charlie Munger's
top ten rules had an impact on you the most.
Leave it in the comments below and I'm going to
join in the discussion.
Thank you guys so much for watching
keep to believe, and I'll see you soon.