Charlie Munger

How could economics not be behavioral? If it isn't behavioral, what the hell is it?

The world of derivatives is full of holes that very few people are really aware of. It's like hydrogen and oxygen sitting on the corner waiting for a little flame.

I believe in the discipline of mastering the best that other people have ever figured out. I don't believe in just sitting down and trying to dream it all up yourself. Nobody's that smart.

Economics is in many respects the queen of the soft sciences. It's expected to be better than the rest. It's my view that economics is better at the multi-disciplinary stuff than the rest of the soft science. And it's also my view that it's still lousy.

Look at this generation, with all of its electronic devices and multitasking. I will confidently predict less success than Warren, who just focused on reading.

Economics profession, they've been - they've been confident in various formulas, but economics is not physics. The same formula that works in one decade doesn't work in the next. Economics is a difficult subject.

As I talk about strengths and weaknesses in academic economics, one interesting fact you are entitled to know is that I never took a course in economics. And with this striking lack of credentials, you may wonder why I have the chutzpah to be up here giving this talk. The answer is I have a black belt in chutzpah. I was born with it.

If you're unhappy with what you've had over the last 50 years, you have an unfortunate misappraisal of life. It's as good as it gets, and it's very likely to get worse.

To me, it's obvious that the winner has to bet very selectively. It's been obvious to me since very early in life. I don't know why it's not obvious to very many other people.

The liabilities are always 100 percent good. It's the assets you have to worry about.

I'm used to people with very high IQs knowing how to recognize reality, but there's a huge human tendency where it may be instructive to think that whatever you're doing to succeed is all right.

If you can get good at destroying your own wrong ideas, that is a great gift.

The perfect example of Darwinism is what technology has done to businesses.

The safest way to get what you want is to deserve what you want.

No wise pilot, no matter how great his talent and experience, fails to use his checklist.

If it is wisdom you're after, you're going to spend a lot of time on your ass reading.

There are two kinds of businesses: The first earns 12%, and you can take it out at the end of the year. The second earns 12%, but all the excess cash must be reinvested - there's never any cash. It reminds me of the guy who looks at all of his equipment and says, 'There's all of my profit.' We hate that kind of business.

You need a different checklist and different mental models for different companies.

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._x000D_ It’s such a simple idea, it’s the golden rule so to speak. You want to deliver to the world what you would buy if you were on the other end.

We both (Charlie Munger and Warren Buffett) insist on a lot of time being available almost every day to just sit and think. That is very uncommon in American business. We read and think.

Gold is a great thing to sew into your garments if you're a Jewish family in Vienna in 1939, but I think civilized people don't buy gold, they invest in productive businesses.