찰리 멍거
Vice Chairman of Berkshire Hathaway who championed a latticework of multidisciplinary mental models and inversion thinking to avoid costly judgment errors.
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After studying mathematics at the University of Michigan, Munger faced the disruption of World War II shortly after turning nineteen. He left college to enlist in the U.S. Army Air Corps, becoming a second lieutenant and studying meteorology at Caltech.
LessonEarly training in mathematics, statistics, and meteorology builds a rigorous foundation for probabilistic thinking in business.
Harvard Law School initially rejected Munger's application because he lacked an undergraduate bachelor's degree. Admitted after family friend Roscoe Pound intervened, Munger applied himself rigorously and graduated magna cum laude in 1948.
LessonWhen granted an unconventional opportunity through a network, one must validate it through exceptional diligence and performance.
Alongside co-founding the law firm Munger, Tolles & Olson, Munger sought greater financial independence through direct capital allocation. He partnered with Jack Wheeler to manage a concentrated investment partnership that compounded at 19.8% annually from 1962 to 1975 versus 5.0% for the Dow.
LessonA disciplined, concentrated investment strategy can vastly outperform broad market averages over a multi-year cycle.
Munger donated $43.5 million worth of stock to Stanford to build a graduate housing complex. He personally designed the residence, which opened in 2009 and houses 600 students.
LessonA founder can apply their unique ideas to fields outside their primary expertise to solve specific problems.
Munger gave $110 million to the University of Michigan for a residence he designed with mostly windowless bedrooms. He believed this layout would foster a better community of scholars by encouraging students to interact in common areas.
LessonUnconventional designs can be used to force desired social behaviors, though they may face significant pushback.
Munger insisted that UC Santa Barbara follow his windowless design for a massive new dormitory, leading a long-time consulting architect to resign in protest. After widespread public backlash, the university eventually abandoned the project.
LessonStrict adherence to a personal vision can lead to the collapse of a partnership if it ignores the concerns of key stakeholders.
At age ten, Buffett visited the New York Stock Exchange and saw the immense wealth and custom services provided to traders. This experience solidified his ambition to find a way to participate in the financial markets.
LessonExposure to the centers of industry can leave a lasting impression and clarify long-term career goals.
After being rejected by Harvard Business School, Warren Buffett discovered his heroes Benjamin Graham and David Dodd were teaching at Columbia. He wrote a persuasive letter to them after the deadline and was admitted unilaterally by Dodd.
LessonA rejection from a prestigious institution can lead to a better opportunity if you pursue mentors who align with your specific interests.
Warren Buffett had a handshake deal to sell his shares back to Seabury Stanton for $11.50, but Stanton sent a formal offer for 12 cents less. Infuriated by this bad faith, Buffett decided to buy the entire company instead of selling, just to fire Stanton.
LessonEmotional decisions in business can lead to owning poor assets that drain time and capital for decades.
Munger and Buffett bought a small department store chain in Baltimore but realized it was too competitive as soon as the deal closed. They decided to exit the retail operation quickly and used the remaining cash to buy stocks during a recession, which tripled their money.
LessonIt is better to reverse a bad decision and look foolish than to stay in a losing business until you go broke.
Warren Buffett acquired General Re primarily to use Berkshire's overvalued stock and gain a large bond portfolio. However, he did not consult Charlie Munger until late in the process and initially left the existing management in place.
LessonEven a legendary investor can make a mistake by over-engineering a deal and failing to involve a trusted partner early.
During the height of the tech bubble, shareholders pressured Munger and Buffett for not owning technology stocks. Munger dismissed the speculative frenzy by comparing bad tech companies to turds mixed with raisins.
LessonStick to your investment principles even when you are being publicly criticized for missing out on a bubble.
Charlie's son Teddy died of leukemia at age nine. Despite being devastated, Charlie decided to set new goals and move forward rather than being consumed by grief.
LessonFounders must practice extreme mental discipline to keep personal tragedies from destroying their professional will.
While in Omaha to settle his father's estate, Charlie was introduced to Warren Buffett at a dinner. They hit it off immediately, and Charlie was fascinated by Warren's unique focus on investing as a full-time career.
LessonFinding a peer who thinks differently about business can change the entire trajectory of your career.
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