Poor Charlie's Almanack: The Essential Wit and Wisdom of Charles T. Munger

This book is really amazing. Definitely one of the top 5 or 10 best business books that you could read in your lifetime. Charlie Munger, multi billionaire Vice Chairman of Berkshire Hathaway, shares his inner most thoughts, ideas, decision making processes...this is how you really make money. It makes those other "financial experts" (the people you see on tv with books, boardgames, spouting wisdom such as "pay yourself first", "save and invest 10% of your income") look like a bunch of kindergartners. They've made the bulk of their money selling books, tapes and seminars. Munger's on the Forbes 400, he doesn't have to sell books to make money. I think the public is very lucky, just to get a glimpse into his mind. It's a very dense book, 500+ pages, it's not something that you can read on a weekend and apply monday morning. Cialdini's book "Influence" is pretty much a pre requisite, you've got to be familiar with some of the key pyschological principles to get any usage out of this book. His mental models approach to business and investing will give you a huge edge in life. You'll come up with answers that no one else has. It reminds me of what Jay Abraham teaches (a big marketing consultant from California). He talks about tunnel vision vs funnel vision, and that most people who spend their whole lives in a particular industry, tend to do about plus or minus 10-20% of what everyone else in that industry does. You have to go outside of your industry for breakthroughs. It's a similar thing here, what they teach you in college is terrible. Everyone is walled off from one another, deparments tend to overuse their own models and underuse important ones that could be right down the hall. I think Munger is being nice in his critique of higher learning. What they teach is just daffy, I have an undergrad degree in finance, and all I read about was "rational man". There's no people in any business texts. No one lies, cheats or steals. There's no personality clashes. Imagine being in a business class and asking the professor..."but, there's no people in any of these books. Can you bring in a pyschology professor to discuss how personalities clash in business or the misjudgements that people make?". It's all terribly mistaught, nothing is cohesive or interconnected in any way. For example, in finance, you see all these people killing themselves trying to explain the latest real estate bubble. Straining, straining..is it a bubble, or isn't it?? Is it really going to pop? I think the fatal flaw academics make is thinking that the deeper they go in their own field, the more answers they'll come up with. Maybe, maybe not. But they should be looking outside of their own field for some answers. In the case of the real estate bubble, you can run down the pyschological principles laid out, and you've got a nice model to explain it. -People are naturally overconfident and overly optimistic about everything. -Aided by social proof, you see everyone else bu

This book took me a looong time to read, but that's because its nearly 500 pages are so saturated with information and original ideas, you will have plenty to learn and will want to fully explore and take advantage of all Charlie has to offer. You MUST be an active reader to derive any benefit from the framework he has laid out. I don't think a quick skim will do it any justice, or even be worth your time. The whole purpose of this book is to provide you with a strong mental foundation for success in life... I call it the "inner game." Only then are you truly ready to take on the world in business or make astute investment decisions. For specific investment advice, look no further than Buffett. What you get from Munger is both harder to obtain, and more important to master. Application of investment technique should be the easy part. Key teachings I found important were: the importance of using the multi-disciplinary approach and interrelated mental models formed from the big (often elementary but rarely used), important ideas of various disciplines realizing your mental circle of competence, and specializing the lollapalooza effect avoiding the man-with-the-hammer problem, and many other psychological tendencies he discusses his emphasis on ethical behavior (where else do you find this?) comparison of the stock market to the pari-mutuel betting system the idea of betting big when the odds are in your favor (Buffett's idea as well) What I like most is that he has a no-nonsense attitude, and this quality of genuineness makes him more likeable, and easier to learn from. He has a dominant personality and seems more opinionated and less mellow than Buffett, so yes, sometimes he may come across as arrogant, but I'm sure it's hard to downplay such a great life. But anyway, he is supposed to be the teacher, so you must put your own ego aside. You also get a nice biography at the beginning, giving you some background information about him. Of course Charlie, a self-proclaimed "biography nut," would agree that learning about the lives of other successful people is very important step to success. Since he has led a very honorable life, it would be a great thing if people try to walk in his footsteps. My only complaint is that somebody decided to put huge boldface italicized duplicate excerpts in the middle of most pages, absolutely killing the flow of the text and slowing me down considerably. I would have tried to simply ignore them, but some of the quotes were not duplicates from the text so I read every single one. I didn't mind the extra information offered in the margins, and in fact found most of it both helpful and interesting. The caricatures were amusing. Remember Charlie is supposed to be a down-to-earth guy, so they wanted to give the book this kind of feel. Also, there was a lot of redundancy of ideas, due to the fact that ten separate speeches were compiled and the topics often overlapped, but I know the value of repetition, and if

This is an absolutely fabulous book. I love it. I am an avid follower of Charlie Munger, going to the annual meetings etc. So I thought that this might only be a rehash of existing speeches and talks, which admittedly form the bulk of the text. But it is much more--Munger has revised and added to some of his talks. The editor, Peter Kaufman, has added other materials. Munger's son's comments about dinner table conversations with his children (and grandchildren) are worth the price of the book. Simply, the book imparts the wisdom of Charlie Munger, from the dinner table to the boardroom. Now to the bad: as marvelously as the book portrays Munger's wisdom, graphically it is one of the silliest books I have ever seen. The illustrations and pictures range from trite to dreadful. They are poorly chosen, poorly reproduced, sophomoric at best: a picture from Star Trek to illustrate second order consequences, inane caricatures of Munger and Buffett, etc. Visually, it is ghastly. Nevertheless, this is still a 5 star book. So, here is a new Franklinesque proverb: Don't judge a book by its illustrations.

Poor Charlie's Almanack; The Wit and Wisdom of Charles T. Munger This book gives us the opportunity to learn how one of the greatest financial minds of our day views the world. Amazingly Charlie shares not only his opinions but his thought process and belief system. The book walks you through how Charlie arrives at the decisions that have made him a billionaire. I continually study both Charlie Munger and Warren Buffett , including reading the Berkshire Hathaway annual letter to shareholders which is packed with so much timely insight I'm surprised they don't charge for it. Some of my favorite thoughts and quotes, which are elaborated on in the book are: Pg 6 - "Read all the time" Pg 45 - The Lollapalooza Effect - Charlie coined this phrase as a way of describing an idea, concept or business strategy that literally grows exponentially due to favorable coinciding events. Pg. 40 -"Be prepared, act promptly, in scale, on a few major opportunities." Pg 48- Jessy Livermore, "Big money is made in the waiting" Charlie then goes on to explain that he would sit on 10-20 million at a time in T-Bills just waiting. Pg 49 - "It takes character to sit there with all that cash and do nothing. I didn't get to where I am by going after mediocre opportunities" - "It's like looking for a horse that pays 50/50 and has a 3-to-1 chance of winning." Pg 60 - "The man who doesn't read good books has no advantage over the man who can't" - Mark Twain On Coumpound Interest: "Compound interest is the eighth wonder of the world" - Einstein "Never interrupt it unnecessarily" - Munger "...'tis the stone that will turn all your lead into gold...Remember that money is of a prolific generating nature. Money can beget money, and its offspring can beget more" - Benjamine Franklin "If you took our top fifteen decisions out, we'd have a pretty average record. It wasn't hyperactivity, but a hell of a lot of patience. You stuck to your principles and when opportunities came along you pounced on them with vigor." - Munger On page 61 - 64 there is an investment checklist that is a must read! "There are worse situations than drowning in cash and sitting, sitting, sitting. I remember when I wasn't awash in cash and I don't want to go back. - Munger "The wisdom of the wise, and the experience of ages, may be preserved by quotations" - Isaac Disraeli "It is a good thing for an uneducated man to read a good book of quotations" - Sir Winston Churchill Pg. 88 - "You need to have a passionate interest in why thing are happening. That cast of mind, kept over long periods, gradually improves your ability to focus on reality. If you don't have that cast of mind your destined for failure even if you have a high I.Q." - Munger "Our game is to recognize a big idea when it comes along, when it doesn't come along very often. Opportunity comes to the prepared mind." - Munger A good portion of the book is focused on the importance of multiple mental models and the lack of them in