Views on Life & on Equity Investing

Wonder, Wealth & Abundance

Damn Right ! Biography of Charlie Munger by Janet Lowe

with 4 comments

Biography of Munger, pretty much the only biography out there, is an opportunity to know sharp, idiosyncratic, wise, sincere and all rounder Munger. 
Janet reveals a lot about his family, his upbringing, struggle of bringing up 8 children, breaking away from legal profession into electronics and construction business and later investing.  It leaves a lot to desire behind the scenes decisions that I was looking for, Munger’s decision making process is not well covered. 
Anyone who has done great deal of reading on Munger may not learn about investing but more about him as a person. A couple of stories strike about him. Nobody at bridge table understands why Munger makes certain moves, he has his own internal thought process and a reason behind. 
Charlie grew out of working for a living damned loatheful job of lawyer by grit and hard work in a household of several children. I am sure we are in much luckier position with wisdom generously shared. For a decade Charlie dabbled with construction business alongside day job and made his first million dollars.
It is interesting to note that 200 billion $ empire started with less than 40 million $, when SEC investigation into Blue Chip Stamps led to consolidation of all companies into what is known as Berkshire Hathway Inc to us today. Most interesting is to note that they took fewer than one decision every three years to create this much material wealth.
I personally do not feel great or have a sense of accomplishment about investing money and moving money into companies passively. I personally feel like a pimp by buying and selling shares rather than building companies or working with entrepreneurs actively. I consider teachers, software builders, masons as being more beneficial to society. However,  in my opinion pimp style investing has two short term immediate gains, a) our financial freedom from undesirable work or working with undesirable people b) money being energy can be directed at any other cause. Charlie voices similar opinions in this book when he writes “I am not in favour of social system that throws huge rewards to people who don’t improve the factories, improve systems and process and so forth. Of course, you can argue that I’m condemning myself. All I can say is it’s almost intentional”.
I also believe we need to pick our role models carefully. Ben Graham has a brilliant mind, great personality and a sense of humour, but for all practical purposes had a despicable social life. He lacked self discipline in social matters.
Charlie and Buffett are as good and as sincere as they get in investing world. Charlie is also referred as an “abominable no man”, who says no to any idea. But he refuses by retorting, “No, no, I’m not negative, I jump like a trout out of water if it’s a good idea”.
Munger is a biography nut himself and claims that if you make Adam Smith your friend, you are likely to do better in economics and learn more. Its better to make friends with eminent dead who had right ideas, it will work better in education and better in life.
I vaguely remember a thought from Vivekanda something on the lines, “I would first sharpen and train my mind with all sorts of discipline for 25 years and then I can feed all the content of all libraries in it over next few days”.
Munger wasn’t born great but he kept one foot ahead of the other, that simple. They wouldn’t have paid 100,000 $ extra for 25 million $ See’s Candy acquisition which they now tout as the best. In his own words Munger calls himself dumb for not waking up to quality far sooner. That was the first time they paid 3 times book value, veering away from Graham’s Book Value based one puffs. That led them to buy high quality companies later like Coca Cola. There is hope for all of us. 
Charlie is gregarious but also at times absorbed and introverted. He reminds me of Leon Levy, whose biography I read last year, and would  recommended  Mind of Wall Street. 

Takeaway:
Re-read the line one decision in three years, less than 10 decisions in life can make you billionaire ! 

Written by amitdipsite

January 4, 2011 at 8:04 am

Posted in Uncategorized

4 Responses

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  1. “The record shows the advantage of a peculiar mindset, not seeking action for its own sake, but instead combining extreme patience with extreme decisiveness”

    Multibagger

    January 4, 2011 at 7:40 pm

  2. Almost like a machine.Brilliant!

    kudva

    January 8, 2011 at 4:19 am

  3. When someone asked him Coca-Cola type of opportunities are not abound, buy and hold for generations i.e. Berkshire's universe may be small. He remarked, 'Why should it be easy to do 2 or 3 things / decisions in your life and your family is wealthy forever'. Their big ideas to bet hard seldom are simple but not easy.

    Multibagger

    January 8, 2011 at 5:52 am

  4. what is your view on FINANCIAL TECHNOLOGIES?
    THE SCRIP HAS FALLEN 60% IN A YEAR.
    DU YOU RECOMMEND A BUY A T CMP OR IT IS A TOTAL AVOID.

    TIME HORIZN 2 YEARS.

    THANSK IN ADVANCE
    -PRUTHVI

    agnipruthvi

    January 22, 2011 at 3:16 pm


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