How could economics not be behavioral? If it isn't behavioral, what the hell is it?
Charlie MungerRead
The liabilities are always 100 percent good. It's the assets you have to worry about.
Interpretation
Understanding liabilities is crucial as they represent sure obligations, whereas assets can be uncertain in value.
Charlie Munger's quote highlights the importance of recognizing and understanding liabilities, which are fixed and certain, against the backdrop of assets, which can vary in reliability and worth. While liabilities are a sure thing and should be managed carefully, assets require continual assessment and management, as their value may not be as stable or predictable.
In practice
A business leader might share this quote during a financial strategy meeting to emphasize the importance of risk management.
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.
The danger that keeps me just a little frightened with every book I write, however, is that I'll overreach myself once too often and try to write a story that I'm just plain not talented or skilful enough to write. That's the dilemma every storyteller faces. It is painful to fail. But it is far sadder when a storyteller stops wanting to try.
You come to me for advice, but you can't cope with anything you don't recognize. Hmmm. So we'll have to tell you something you already know but make it sound like news, eh Well, business as usual , I suppose.
You have so much pain inside yourself that you try & hurt yourself on the outside because you want help.
It's too bad failures don't give seminars. Wouldn't that be valuable? If you meet a guy who has messed up his life for forty years, you've just got to say, 'John, if I bring my journal and promise to take good notes, would you spend a day with me?'
Realization is to get rid of the delusion that you have not realized.
That's one form of magic, of course." "What, just knowing things?" "Knowing things that other people don't know.
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