Charlie Munger: The Complete Investor

[spartansaver]

Figured I would shares this, stumbled on it at 25IQ. Iv'e enjoyed reading some of the articles on there so I hope it's good.

 

http://www.amazon.com/dp/023117098X

[innerscorecard]

I wonder how good the book is. Tren Griffin is obviously a very intelligent, successful and talented blogger, investor and person (and I am not), but I find the writing on his site almost completely unreadable. He makes Joel Greenblatt, Charlie Munger and Warren Buffett, as well as literally everyone else, all sound exactly the same!

 

Perhaps I am too dumb to "get" his great synthesis of every public and private investor.

[spartansaver]

It's not a blog I frequent very often, but if I'm in the mood for a quick biography I think they're decent reads. At least this is his first complete biography so it can't be like any of the others :).

 

[netnet]

inner,

 

I have to disagree with you here.  I find his blog brilliant and incisive, but as they say it takes two to make a market ;)

 

I have no insight into his book as I have not read it.

[netnet]

I like the book.  For those into Munger, there is not anything that is new, but it is a great introduction to Munger for those not in the cult. ;)

 

I do like this quote though:

It is clear that Munger loves to learn. He actually has fun when he is learning, and that makes the worldly wisdom investing process enjoyable for him. This is important because many people do not find investing enjoyable, especially when compared to gambling, which science has shown can generate pleasure via chemicals (e.g., dopamine) even though it is an activity with a negative net present value. What Munger has done is created a system—worldly wisdom—that allows him to generate the same chemical rewards in an activity that has a positive net present value. When you learn something new, your brain gives itself a chemical reward, which motivates you to do the work necessary to be a successful investor.

 

As Munger said, he is a collector of mental models and inanities to avoid.  Collectors have well grooved dopamine circuits.

 

Incentivize your learning!!!

h/t to Shane @farnamstreetblog

[hellowod]

I didn't think much of this book. It's ok for beginners. Initially, when I heard about the book, I was super keen to get hold of it. It was a bit of a let down - the book covers the basics of Graham 4 rules of investing, the psychology of misjudgement, the good investor behaviors and a few other things. Overall, extremely basic stuff (and a short book).

[Munger_Disciple]

I too did not think much of this book. There is really nothing new in this book and it was a big disappointment for me. I think Poor Charlie's Almanac and Damn Right are by far the better books about Charlie's life and his philosophy.

[Guest notorious546]

I too did not think much of this book. There is really nothing new in this book and it was a big disappointment for me. I think Poor Charlie's Almanac and Damn Right are by far the better books about Charlie's life and his philosophy.

 

I was fairly excited to get the book as arrival for the book was delayed a few times. I'm not sure how to describe this type of book but this "type" tends to have so many quotes and bits of information rather than a lot of text and views from the author.

I thought the book was good, not great. I could see how if you have been an munger fan for an long time that this wouldn't be everything you were looking for.

[Munger_Disciple]

I could see how if you have been an munger fan for an long time that this wouldn't be everything you were looking for.

 

Even for a novice this is not a good book to understand Munger in my opinion. Almanac and Dam Right are far better. Then top it off with Berkshire and Wesco AM transcripts.

[Peregrino]

Couldn't agree more. 

 

It's rare that I don't end up finishing a book on either Buffett or Munger, but I couldn't justify reading more when the material I encountered about 1/3 of the way through was already so well trodden elsewhere. 

 

Perhaps newcomers to Berkshire would get some value out of it if it were the first book they encountered on Charlie, but Damn Right! was more entertaining and Charlie's longer lectures on Worldly Wisdom that can be found on youtube were better returns on time.

 

I do, however, like the 25iq blog posts.

 

 

[LC]

I haven;t read Damn Right yet.

 

Can anyone provide a brief synopsis? Is it worth it to someone having read Charlie's Almanack? I couldn't find a thread here.

[undervalued]

Damn Right is more about Charlie's life, background and family (biography).. where as Charlie's Almanac is more of his speeches and how he thinks about things.

[JBird]

What Munger has done is created a system—worldly wisdom—that allows him to generate the same chemical rewards in an activity that has a positive net present value. When you learn something new, your brain gives itself a chemical reward, which motivates you to do the work necessary to be a successful investor.

 

Operating within a sufficient reward system seems to be the critical factor if you're going to keep the learning machine turned on for long periods of time.

 

I think for the most part, successfully engaging in an activity that requires sustained effort over long periods is going to require a serious amount of reward and reinforcement from your peers. Serious bikers ride with other bikers. Serious scientists collaborate with other scientists.

 

I don't think wisdom-seekers are any different. Sitting on your ass and reading takes some effort. Remembering the big ideas and applying them to your daily routines takes some effort.

 

When I first began learning the "Buffett / Munger" mental models, the ideas resonated so strongly with me that the chemical reward for learning them was in itself a sufficient feedback loop to continue learning. Over time that's waned.

 

I look at the base rates for individuals who have an active interest in this sort of thing, and hope tends to fade. But I guess that's life. Like William the Silent said, it's not necessary to hope in order to undertake.

 

[undervalued]

Did anyone has ever compile a complete list of the mental models that Charlie uses?

[Peregrino]

The man himself gives a pretty good list in the attached speech:

 

 

 

[Morgan]

Did anyone has ever compile a complete list of the mental models that Charlie uses?

 

I've never seen a list with everything written out and explained, but I have seen a list with some explanations from Farnam Street. This is the most complete list I've found. https://www.farnamstreetblog.com/mental-models/

 

Poor Charlie's Almanack has an updated version of The Psychology of Human Misjudgement speech in it as well as 10 other speeches and lots more information. It's probably one of the best books I've purchased in the last 10 years. If you're interested in mental models, you should get the book.

[KCLarkin]

Did anyone has ever compile a complete list of the mental models that Charlie uses?

 

I never seen a list with everything written out and explained, but I have seen a list with some explanations from Farnam Street. This is the most complete list I've found. https://www.farnamstreetblog.com/mental-models/

 

Poor Charlie's Almanack has an updated version of The Psychology of Human Misjudgement speech in it as well as 10 other speeches and lots more information. It's probably one of the best books I've purchased in the last 10 years. If you're interested in mental models, you should get the book.

 

Other than the Psychology of Human Misjudgement speech (I recommend the audio version), this book might be as close as you will get:

http://www.amazon.ca/dp/0231160100/

 

Disclosure: I haven't read it.

[farnamstreet]

I've been creating and updating a starting list for years, although I'm in the process of revamping it a bit going forward.

 

https://www.farnamstreetblog.com/mental-models/

 

 

[Morgan]

I've been creating and updating a starting list for years, although I'm in the process of revamping it a bit going forward.

 

https://www.farnamstreetblog.com/mental-models/

 

I really like that list. Have you thought about having others write on the unwritten topics and you acting as the editor?

 

 

PS - I'm a long time fan of the site.

[netnet]

Shane's list is great (FarnamStreetBlog.com). If you do not follow it you should.

 

For a list of mental models you also can check out

• thinkmentalmodels.com, which has sort of a cheat sheet, around US$4.00
  
• Or for the grandaddy, Bevelin's book, some find it way too dense.
  

 

Note: Munger say you should collect them yourself to "bang it into your head".

 

 

 

[Guest notorious546]

Shane's list is great (FarnamStreetBlog.com). If you do not follow it you should.

 

For a list of mental models you also can check out

• thinkmentalmodels.com, which has sort of a cheat sheet, around US$4.00
  
• Or for the grandaddy, Bevelin's book, some find it way too dense.
  

 

Note: Munger say you should collect them yourself to "bang it into your head".

 

Something i've thought about more lately is creating my own "names/labels" for each model and writing out examples that i see and understand. The more i attach the concepts to things i already know the more i'm likely to retain down the road. that is with some practice of course.

 

[Read the Footnotes]

Just finished reading this book. For me it was a bit of a struggle to finish the last third of the book.

 

Highlights: This book inspired me to go back and reread Poor Charlie's Almanack and other excellent books. The quotes of Charlie and others are all excellent and I came across a few that I was not familiar with.

 

Lowlights: Toward the end of the book, I started coming across portions that didn't make sense to me. I found myself questioning whether it was a case unclear writing or poor editing which left me confused about the author's intent. Eventually I found myself questioning if he might have actually reached some misleading, or at least rather unorthodox conclusions regarding statements from Charlie and Warren. The synthesis of ideas at the beginning of the book was far stronger than toward the end.

 

Recommendation: A great use of this book would be to simply browse a library copy to see if there are any quotes you aren't familiar with.

 

Warning: If you frequently find yourself needing to read every word and completely read every book in its entirety, you might want to read this entire thread first and then decide whether you might better spend your time elsewhere.