Poor charlies almanack pdf download

A lot about Berkshire is like this. Being controlling owners is key- it wou ld be hard for a committee to make these kinds of decisions. B erkshire H athaway Repurchasing Shares In the past, when Berkshire has gotten cheap, we've found ocher even cheaper stocks to buy. It's no fun ro have the company so lacking in repute that we can make money for some shareholders by buying out ochers. Splitting Be rkshire Stock to Create More Liquidity I think the notion that liquidity of tradab le comrnon scock is a great contributor to capitalism is mostly twaddle.

The liquidity gives us these crazy booms, so it has as many problems as virwes. But we're trying to c reate more people w ho have the problem of owning stock worth so much that li quidity is an issue. It's a good q uestion. Our approach has worked for us. L ook at the fun we, our managers, and our shareh olders arc having.

It's not difficult, but it looks difficult beca use it's unconventional-i t isn't the way things are normall y done. Tt's simple and common sense. Robert H agstrom's book, recommended by both Munger and Buffett, clearly lays out Berkshire Hathaway's successful approach for all to follow. The Maytag Repairman. Starting in , actor Jesse White portrayed the appliance repairman who, because of the great reliability of Maytag products, becomes the "loneliest man in town.

In , Jump retired, and a former Mr. Goodwren ch, Hardy Rawls, took over the role. Charlie's Influence on Warren I think those authors give me more cred it than I deserve. He here, at age 80, is ro make Warren look young.

But we -Charlie at Berkshire Hathaway know more now than five years ago. What Happens When Buffett's Gone? The key is having good businesses. There's a lot of momentum here. If the stock went down, Berkshire cou ld buy it back. Therc's no reason to think it will go to hell in a bucket, and I think there's reason to believe it could go on quite wel l.

And the acquisition side wi ll do just fine. You shou ld be so lucky. What If C harlie Dies? As you can tell, we ' re planning on immortality here. What do you need-sining on a pile of money and Warren Buffett sitt ing at the parent corporation? If you ask Charlie something and he says "no," then we pur all of our "Warren is remarkably easy to work wid1-rhe best I've ever encountered.

It money in it. He has a remarkable ability ro look ar the same ser of heard," then figures rhar everyone else is looking we make a at and come up with original insights and perspectives. He docs this al l rhe more moderate time-comes up with great ideas d1ar investment. If seem so simple after you hear them, bur don't occur tO anyone else. Chuck Rickershauser, former Munger Tolles partner and friend since " W arren cold men storv one ; that, b;tck in the.

The Abominable No-Man Th. All righrs resened. George GiiJespie, longtime friend:. You need a lot of curiosity for extremely considerate of his friends. To me, he is a man for aU seasons. Th at cast of "Charlie has a great store of practical wisdom.

For me, his most apt aphorism comes along, when one doesn't come along very is that 'a thing not worth doing is not wo rth doing well. Opportunity comes to the prepared 1nind.

You ca n 't do it. Waiting for a Fat Pitch. Harmon Killebrew b. I' ve been waiting for this craziness to end for decades. It's been dented, but and Kansas Cicy Royals over his t:wency-rwo- year career. Famous for his abilicy tO put liu it's sti ll om there. Ar Warren once said rome, ''I'm probably misjudging academ ia genera lly [in the time of l1is election to the Hall of Fame in , he ranked fifth on the all-time think ing so poorly of it] because the people that interact with me have bonkers home run list and was second only to Babe theories.

We don 't believe that widespread d iversification wi ll yield a good result. It wasn't hyperactivity, but a hell of a lor of patience. You stuck ro your princ iples, and when opporwn ities came along, you pounced on them with vigor. Be rkshire in irs history has made money betting on sure things. Sit-on-Your-Ass Investing If you buy something because it's undervalued, then you have ro think about selli ng it when it approaches your ca lculation of its intrinsic value.

Th at's hard. That's a good thing. Take all your savings and buy some good stock and hold it till it goes up, then sell it. The second earns twelve percent, but all the excess cash must be reinvested- there's never any cash. It reminds me of rhe guy who sel ls construction equipment-he looks at his used machines, taken in as customers bought new ones, and says, "There's all of my profit, rusting in my yard.

You arc underest imating quality. An image of his w the crit icism and changed our mind. This is a good lesson for anYone: the ability mother, Mary See, also became the ro rake criticism constructivel y and learn from it. In , in a transaction initiated by Robert T. Today, See's Candies are sold in more than rwo hundred shops and in certain foreign locations, such as Hong Kong and Tokyo.

We saw it, but didn't act on it. And we keep doing it. We never get over ir. There are two types of mistakes: 1 doing nothing, what lrarren calls sucking my thumb" and 2 buying with an eyedropper things we should be buying a lot of After nearly m.

We arc apparently slow learners. These opportunity costs don't show up on financial statements but have cost us many bi llions. Since m istakes of omission [aren't visible], most people don't pay attention to them. Buying into Stock Declines Over many decades, our usual practice is that if [the stock of] something we like goes down, we buy mo re and more. Sometimes something happens, you realize you're wrong, and you get our. H ave a prepared mind. Back then, we had just come out of a depression.

Capitalism was a bad word. There had been abuses in Seated Old Mmz was painted by Pablo. A joke going Picasso at the age of ninety, just two years prior to his death. The painting is currently displayed at Musee around then was the guy Picasso, Paris. In , Picasso said, "Everything can be who said, '1 bought stock explained scientifically today, except Art. You can go to the moon or walk under for my old age and it the sea, or anything else you like, but painting remains painting because it eludes such investigation.

It remains there like a worked-in six months, question. And it alone gives the answer. Short Selling Being short and seeing a promoter rake the stock up is very irritating. It's not worth it to have that much irritation in your life.

The Moats and Sustainable Competitive A dv antage main rower of rhe castle was struck by lightning in and burned ro the ground. In , rhe present iron and Old moats are getting filled in and new moats concrete reconstruction of the castle was undertaken; major repairs in I restored much of the castle's original are harder to predict, so it's getting harder.

Learning Process I don't know anyone who [learned to be a great investor] with great rapidity. So the game is to keep learning. You gotta like the learn ing process. T he ke. Warren and I will be disappointed if there isn't [attrac! If you have competence, you know rhe edge. If ou take the bc-. Chapter Three:. Ir's crazy. Listcning to todny's forcc,lsters N.

Gregory Mankiw, on the economics is just as crazy as when t he king hircd the guy to look at the sheep g uts. It happen-. His popular tex tbooks Iris enti rel y pos. So if you think you're talented, ,e;ood luck. IPOs arc roo small for U'i, or roo high tech-we wo n't understand them. The California-based com pany has. C hapter Three: Munj:! Future Market Returns Portrait of Hmdrickjt! L ook at w hat happened in j apan, where srocks traded at fifty to sixty times earnings.

I think due was a special situation, though. If I'm wrong, it could be fora bad reason. If stocks trade more like Rcmbrandrs in the future, then stocks will rise, but they will have no anc hors. In t his case, it's hard to predict how far. The im csrmcnr game is getting more and more compcriti' c. You can nc,cr predict which gives it a population densiry roughly three times what markcts will do. It has an estimated. There wa-; absolute chaos at the bonom tick.

We continue with the question of how Charlie monicors broad economic trends and changes:. Question: "vVhat macro statistics do you regularly monitor or find useful in your attempt to understand the broader economic landscape?

Answer: "None. I find by staying abreast of our Berkshire subsidiaries and by regularly reading business newspapers and magazines, I am exposed to an enormous amount of material at the micro level. But it's much harder to spot problc. Berkshire H athaway and the Coca-Cola Company. Holding million shares, Berkshire Hathaway is the largest shareholder of the Coca- Cola Company and has been so since the late s.

The Coca- Cola Company began in as a soda fountain beverage seller and has evolved into one of the largest companies in the world. The poor guy in the general public is getting a terrible product from the profess ionals. I think it's uisgusting. But if it makes money, we tend to do it in this COLI ntry. The Wesco Annual Meeting Stockbrokers vs. Index Funds Carolyn Denham lefi:, wife of Wesco Direcwr Robert Denham and Carolyn It's hard to sit here at this annual Carl burg right, Wesco Direcror since enjoy the proceedings at the standing-worn-only annual meeting meeting, surrounded by smart, honorable in Pasadena, California.

Although much smaller in scale than the Berkshire meeting stockbrokers who do wellfor their clients, in Omaha attendees vs. But stockbrokers, in toto, solo, on just about any subject. Transcripts of these meetings have been available over. Indexing can't work wel l forever if almost everybody turns to it. Bur it will work al l right for a long rime. The Mutual F und Scandal The business of selecting investment managers was recently shown w be even harder by the reve lation that a significant fraction of mutual fund managers took bribes to betray their own shareholders.

Ifmutualfund directors are independent, then I'm the lead character in the Bolshoi Ballet. T he bankers cared and wanted to protect thei r c lienrs. Is Charlie ps it. One day later, 'ormarH. L ou Simpson. To ha'c a lot of mone' on it. ICO Corporati on. But in the space of twenry-five years, they sold out to terrible behavior, one litt le step at a time.

Once you start doing something bad, then it's easy to take the next step- and in the end, you're a moral sewer. For example, tax shelters, with their contingency fees and secrecy, are a roral abomination.

You'll better understand the evil of top audi t firms starting to sell fraudulent tax shelters when I tell you t hat one told mc that they're better [than the others ] because they only sold [the schemes] ro their cop twenty clients, so no one would notice. It helps our - business decisions and protects Berksh ire. How did we get in situations where we're all so close ro the line?

The Curse of Creative Accou nting. Using accounting for the benefit of the report maker. The sole reason for a report is to serve the user. En ron was the most obvious example of a business culture gone wrong in a measuring stick of performance.

They will nor serve rhe use r well u nless they have the long, long time. They must be easy to read and tO understand. A partnership must be c'tra careful in its hd1a' ior. But if you ralk Unrealistic Assumptions. Calling a tail a leg doesn't Pension fund accounting is drifting into make it a leg. It's human nature to extrapolate the recent - Buffen. Chupter Three:. I don't think it's willful dishonesty, but it might as well be.

Similarly, an in The stock option systt:m may gi' e e'rraordinary rt:mucls things, the stock price willt. Except be rewarded. This is insane. I'm -. To argue anything dsc is insane. I'd rather make my money playing piano in a whore- house than account for options as recommended by john Doerr. Financial institutions make us nervous when they're trying ro do we ll. We're exceptionally goosey of leveraged financial institutions.

If they start talking about how good risk The Long Tail of Derivatives. We fret way earlier than other people. It's the way we arc- you' ll just have to liYc with it. It is the nature of many forms of derivatives, and insurance as well, to Derivatives have " long tails" of exposure. Years can elapse before an actual day of The system is almost insanely irresponsible.

And what people think arc fixes reckoning occurs with respect to loss aren't real ly fixes. It's so comp licated I can't do it justice hcrc-but you can't believe or gain on an individual rransaction. Insurers or financial institutions that the tri llions of dollars involved. You can't be lieve the complexity. You can't believe incorrectly assess their true exposure how difficult it is to do the accounting. People starr by said ro Alice, very earnestly. Alice's Adventures in Wonderland.

Sir Joh n Tenniel is It's easy ro see [the dangers] when you ralk about! Deri nuivcs arc fu ll of clauses that say if one party's c redit gets downgraded, then it has to put up col lateral. It's like margin-you can go broke [just putting up more margin]. In attem pting to protect themse lves, they've introduced instab ility. It's a demented system. Th ey let it balloon a nd balloon and balloon. It's aided by false accou nting.

It 's honker-. It is a sewer, and if I' m right, there will be hell to pay in due course. To say accounting for derivatives in America is a sewer is an insult to sewage. Likelihood of a Derivatives B lowup " Hey Dad, that sewer joke is you r line! I would co nfidently predict that age eighteen, with father Peter Kaufman at Berkshire I lath away most of the d erivative book-; of [this country's!

But I fear the consequences could he feaN1n1c. I chink rht. J'll be amat. It's a crazy id ea for people who are already rich-like Berkshire-co be in this business. It 's a crazy business for big banks to be in. You would rhink it was the Mad Haner's Tea Parry. And the false precision of these people is just unbelievable.

They make the worst economics professors look like gods. Moreover, there is depraviry augmenting the folly. Read the book F. The book will turn your stomach. Simpson oftl. J do not invent these stories. In , in connection "ith an e. She began serving li ke losing cases. It's o simple. State c;upremc court judge! A sbestos a nd Tort R eform Asbcsto. I expect there" ill just he more of the currem mess.

Then, there's another group of claimants" ho smoked two packc; of cigarcm. It's a bonkers system, bur with fcdera li! T he Suprcmc Comt refused to step in. If you want to be cyn ical, look at the perjury.

The only people who can ftx it are the Supreme Court or Congress. The Supreme Court-some people would say rightly- refused to get involved, [but I say] they chickened out. And Congress, given the politics, has yet to step in.

T he Supreme Court consists of the There's an important lesson here: Once wrongdoers get rich, t hey get Chief Justice of the United States and enormous politi cal power a nd you can 't stop it, so the key is tO nip things like such number of associate judges as may be fixed by Co ngress, currentl y eight.

As provided by the Judi cial Act of , the U. Supreme Court holds ultimate lt would be easy tO fix t he proble m: The righ t way is ro say we're nor going judicial power. It receives approximately 8, peririons each year. If it's a -. I figure we former nerds have to stick together. You can't learn those one hundred big ideas YOu really need the way many students do-when. By the way. In fact. The happier mental realm I recommend is one from" hich no one willing!

It is ridiculous the way a lot ofpeople cling to failed ideas. Keynes said, '1t's not bringing in the new ideas that's so hard. It's getting rid of the old ones. Common and Uncommon Sense Organized common or uncommon sense-ve ry basic know ledge- is an enormously powerful rool. There arc huge dangers with computers. People calculate roo much and think roo little. If you bar away As early a. The Mediaeval church rejected the Greek idea, calJing it heresy: the earth was Aat-above the many things, you Jon 't clu ncr yourself.

Earth was Heaven, below was Hell, and in between lived Man and Woman. For many hundreds of years sailors feared losing sight of land, and sea voyages hugged coastlines. I don 'r know anyone;; beginning in the 14th-century, exploration of the oceans began in eamesr-islands, countries and conrinems were discovered.

Many explorers completed voyages of discovery-Marco who's wise who uoesn't read a lor. Finally the Victoria, the only surviving ship of Ferdinand Magellan's Aeet, circumnavigated temperament to grab ideas and do sensible the world and put the issue to rest. The gu '' ho pby.

Singleton wa' co-founder of Teledyne, Inc. From Sharing BufTcu's admiration for Henry E. Singleton, C harlie wonders, "Given the man's talent and record, have we learned " Hen ry Singleton has the best operating enough from him?

Chnptcr Three:. There is fatal di-. Credit for the Institution of Academia is gcneraJiy ascribed to Plato. Born in Omaha, Nebraska in Charlie Munger studied mathematics at the University of Michigan, trained as a meteorologist at Cal Tech Pasadena while in the Army, and graduated magna cum laude from Harvard Law School without ever earning an undergraduate degree.

My role has been that of general contractor. This new edition presents hundreds of Franklin's maxims, along with selections from the Letters, Autobiography, and Franklin's Way to Wealth. An ideal resource for writers, public speakers, and students, this practical, charming little book will delight all readers with its folk wisdom" Find out what he has to say! Charlie Munger is one of the most successful businessmen in the world. He is worth more than a billion dollars and has spent his career not only honing his own business decision-making abilities but also teaching others to do the same.

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Munger By Dmytro Dovhal. From the editors: In praise of multidisciplinary scholarship and the polymath By Siri Terjesen. Download PDF. This book is not simply about investing. It is about cultivating mental models for your whole life, but especially for your investments. Praise for Damn Right! There is a method to his mastery and, through this book, we get a chance to learn about this rare individual. With a biographer's detachment, an historian's thoroughness, and a financial writer's common sense, Lowe produces a riveting account of the family, personal, and business life of the idiosyncratically complex and endlessly fascinating figure.

Now we can rest and enjoy reading Janet Lowe's book about this rare intellectual jewel called Charlie Munger. But his life should be explained. In a city where heroism is too often confused with celebrity, Charlie is a true hero and mentor.

He lives the life lessons that he has studiously extracted from other true heroes and mentors, from Ben Franklin to Ben Graham. This book illuminates those life lessons.

Born in Omaha, Nebraska in Charlie Munger studied mathematics at the University of Michigan, trained as a meteorologist at Cal Tech Pasadena while in the Army, and graduated magna cum laude from Harvard Law School without ever earning an undergraduate degree.

My role has been that of general contractor. This new edition presents hundreds of Franklin's maxims, along with selections from the Letters, Autobiography, and Franklin's Way to Wealth.

An ideal resource for writers, public speakers, and students, this practical, charming little book will delight all readers with its folk wisdom" Every year, thousands upon thousands of people make the pilgrimage to the Berkshire Hathaway annual shareholders meeting to hear the wisdom of one of the smartest men in the business-Charlie Munger.

Find out what he has to say! Charlie Munger is one of the most successful businessmen in the world. He is worth more than a billion dollars and has spent his career not only honing his own business decision-making abilities but also teaching others to do the same.

Now, all of his wisdom and insight into wealth management is collected in one place. Author Oxana Dubrovina wants to give you a crash course in Munger's life-changing philosophy. This success self-help guide and motivational biography will put you on the road to a bright financial future by using Munger, as well as other inspirational leaders like Benjamin Franklin, Lee Kuan Yew, and even Jesus Christ, to illustrate important messages about how to live a good, honest, and successful life.

Money, Riches and Wealth, click here. Manual of Ideas, click here. Corporate Counsel, click here. Reviews: William J. Bob Morris, Blogging on Business, click here. Pamela Holmes, Saturday Evening Post, click here. Kevin M.