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DJCO AGM 2016 Notes?


wescobrk
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I'll post my full-length audio clip as soon as I can figure how to transfer the damn thing to my computer.

 

Here's the highlight of the meeting for myself:

 

Me: Hi Charlie, I'm JD from Phoenix. At Berkshire last year you said that rationality was one of the things that was most important to you. What advice can you give to someone who's looking to improve his own rationality?

 

Charlie Munger: Well I say if you start working at it young and keep doing it until you're as old as I am, that's a very good idea. It's a very good idea, and it's a lot of fun-- particularly if you're good at it. I can hardly think of anything that's more fun. I think I have a lot of cousins in this room, and--and I can say you're on the right track.

 

You don't have to be the Emperor of Japan to get fun out of rationality. You can avoid a lot of hopeless messes, you can help other people scramble out of their messes, you can be a very constructive citizen if you're always rational. And being rational means you avoid certain things. It's like, I don't want to go where the standard result is awful.

 

Where is the standard result awful? Try anger. Try resentment. Try jealousy. Envy. All these things are just one-way tickets to hell. And yet some people just wallow in them. And of course it's a total disaster for them and everyone around them.

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I'll post my full-length audio clip as soon as I can figure how to transfer the damn thing to my computer.

 

Here's the highlight of the meeting for myself:

 

Me: Hi Charlie, I'm JD from Phoenix. At Berkshire last year you said that rationality was one of the things that was most important to you. What advice can you give to someone who's looking to improve his own rationality?

 

Charlie Munger: Well I say if you start working at it young and keep doing it until you're as old as I am, that's a very good idea. It's a very good idea, and it's a lot of fun-- particularly if you're good at it. I can hardly think of anything that's more fun. I think I have a lot of cousins in this room, and--and I can say you're on the right track.

 

You don't have to be the Emperor of Japan to get fun out of rationality. You can avoid a lot of hopeless messes, you can help other people scramble out of their messes, you can be a very constructive citizen if you're always rational. And being rational means you avoid certain things. It's like, I don't want to go where the standard result is awful.

 

Where is the standard result awful? Try anger. Try resentment. Try jealousy. Envy. All these things are just one-way tickets to hell. And yet some people just wallow in them. And of course it's a total disaster for them and everyone around them.

loved your question, was the first answer I jotted down during q&a

 

Wish I knew that was you!

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to be fair, that's one of the few things i disagree with CM/WB on.

 

i've always fallen into the "better to have loved and lost" camp.

This was sort of a continuation/expounding of the “Tell me where I’m going to die, so I won’t go there” Mungerism.

 

So like "tell me what instances will cause rationality to lapse...anger. resentment. jealousy. Envy."

 

Those aren't as fun as Love (or gluttony) anywhoo.

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Anger is a powerful force. And it can be constructive as well as destructive. Anger has led to positive changes through human history.

 

Jealousy and envy - hmm, I wonder how many fortunes were built based on these. Not sure if those are positive examples though.

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Anger is a powerful force. And it can be constructive as well as destructive. Anger has led to positive changes through human history.

 

Jealousy and envy - hmm, I wonder how many fortunes were built based on these. Not sure if those are positive examples though.

 

I mean, Charlie can talk about how rational he is, but the reality is that the hatred for poverty and obscurity drove him to greatness:

 

"but I hated poverty and obscurity and have satisfaction in coming a long way from where I started... Cicero says happy men in old age look back on a lot of achievements. Some say that’s damn selfish, but I like it. I’ve always hated poverty and obscurity and finally found my way out of them"

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Listened to the audio. Thanks for posting. Munger has answered all of these questions in the past. Damn tough not to, when you've been doing this for 50 years. The consistency of the answers is what's amazing. Straight as an arrow.

 

I personally like Omaha because two of them together>>>2

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to be fair, that's one of the few things i disagree with CM/WB on.

 

i've always fallen into the "better to have loved and lost" camp.

 

Agreed, I'd hate a cold calculated rational world devoid of emotion.  The best things in my life looked at through a calculating rational financial lens would be considered mistakes, but without them I couldn't imagine life.  For example, getting married, having kids, spending money on hobbies, vacations, taking days off to relax etc.  Rationally I'm better off maximizing my time, working, getting more money etc.  I'd rather enjoy life.  The grocery bills have exploded with three boys, the time I get with them is invaluable.  Rationally I'm better with my nose in a book learning wisdom or something..no thanks.

 

I'll take a beer with friends any day over sitting alone in a library.  And I like to read!

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Listened to the audio. Thanks for posting. Munger has answered all of these questions in the past. Damn tough not to, when you've been doing this for 50 years. The consistency of the answers is what's amazing. Straight as an arrow.

 

I personally like Omaha because two of them together>>>2

 

Sorry for my confusion, where can i listen to the audio?

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Anger is a powerful force. And it can be constructive as well as destructive. Anger has led to positive changes through human history.

 

Jealousy and envy - hmm, I wonder how many fortunes were built based on these. Not sure if those are positive examples though.

 

Buffett's Berkshire was acquired because of anger.....

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Anger is a powerful force. And it can be constructive as well as destructive. Anger has led to positive changes through human history.

 

Jealousy and envy - hmm, I wonder how many fortunes were built based on these. Not sure if those are positive examples though.

 

Buffett's Berkshire was acquired because of anger.....

 

Right. Though Buffett says it was a huge (biggest?) mistake. ;)

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to be fair, that's one of the few things i disagree with CM/WB on.

 

i've always fallen into the "better to have loved and lost" camp.

 

Agreed, I'd hate a cold calculated rational world devoid of emotion.  The best things in my life looked at through a calculating rational financial lens would be considered mistakes, but without them I couldn't imagine life.  For example, getting married, having kids, spending money on hobbies, vacations, taking days off to relax etc.  Rationally I'm better off maximizing my time, working, getting more money etc.  I'd rather enjoy life.  The grocery bills have exploded with three boys, the time I get with them is invaluable.  Rationally I'm better with my nose in a book learning wisdom or something..no thanks.

 

I'll take a beer with friends any day over sitting alone in a library.  And I like to read!

 

From my understanding, Buffett and Munger are not suggesting to always do the most financially beneficial thing when they say to be rational. I don't think either of them regret getting married (at least with their 2nd marriage), or having kids, or taking time off to play bridge.

 

The advice is rather geared towards not letting your emotions clog your judgment - having the right temperament in investing, or willing to change your decision if the facts change, focusing on your inner scorecard rather than living someone else's life. All these things are obvious and logical but often times people don't do what's right.

 

In terms of spending money to live and enjoy your life - that is arguably the rational thing to do over collecting as much as cash as humanly possible, because if you're not having fun then what's the point of earning in the first place? Working away just to grow your bank account is rather irrational imo!

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to be fair, that's one of the few things i disagree with CM/WB on.

 

i've always fallen into the "better to have loved and lost" camp.

 

Agreed, I'd hate a cold calculated rational world devoid of emotion.  The best things in my life looked at through a calculating rational financial lens would be considered mistakes, but without them I couldn't imagine life.  For example, getting married, having kids, spending money on hobbies, vacations, taking days off to relax etc.  Rationally I'm better off maximizing my time, working, getting more money etc.  I'd rather enjoy life.  The grocery bills have exploded with three boys, the time I get with them is invaluable.  Rationally I'm better with my nose in a book learning wisdom or something..no thanks.

 

I'll take a beer with friends any day over sitting alone in a library.  And I like to read!

 

Buffett's first piece of advice is find a spouse that you like a lot and do what you love. Not be more rational. And he's the better investor. So I'm not sure he agrees with Charlie and I am not sure where Charlie gets you in the end? You become cynical and cold?

 

I am afraid I lean much more towards Charlie without making it a focus. I just can't help it.

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to be fair, that's one of the few things i disagree with CM/WB on.

 

i've always fallen into the "better to have loved and lost" camp.

 

Agreed, I'd hate a cold calculated rational world devoid of emotion.  The best things in my life looked at through a calculating rational financial lens would be considered mistakes, but without them I couldn't imagine life.  For example, getting married, having kids, spending money on hobbies, vacations, taking days off to relax etc.  Rationally I'm better off maximizing my time, working, getting more money etc.  I'd rather enjoy life.  The grocery bills have exploded with three boys, the time I get with them is invaluable.  Rationally I'm better with my nose in a book learning wisdom or something..no thanks.

 

I'll take a beer with friends any day over sitting alone in a library.  And I like to read!

 

From my understanding, Buffett and Munger are not suggesting to always do the most financially beneficial thing when they say to be rational. I don't think either of them regret getting married (at least with their 2nd marriage), or having kids, or taking time off to play bridge.

 

The advice is rather geared towards not letting your emotions clog your judgment - having the right temperament in investing, or willing to change your decision if the facts change, focusing on your inner scorecard rather than living someone else's life. All these things are obvious and logical but often times people don't do what's right.

 

In terms of spending money to live and enjoy your life - that is arguably the rational thing to do over collecting as much as cash as humanly possible, because if you're not having fun then what's the point of earning in the first place? Working away just to grow your bank account is rather irrational imo!

 

+1

Well said. 

Some people go to the extremes on these emotions and can ruin their lives.

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From my understanding, Buffett and Munger are not suggesting to always do the most financially beneficial thing when they say to be rational. I don't think either of them regret getting married (at least with their 2nd marriage), or having kids, or taking time off to play bridge.

 

The advice is rather geared towards not letting your emotions clog your judgment - having the right temperament in investing, or willing to change your decision if the facts change, focusing on your inner scorecard rather than living someone else's life. All these things are obvious and logical but often times people don't do what's right.

 

In terms of spending money to live and enjoy your life - that is arguably the rational thing to do over collecting as much as cash as humanly possible, because if you're not having fun then what's the point of earning in the first place? Working away just to grow your bank account is rather irrational imo!

 

Whether Buffett or Munger agree with this or not, what you've said is totally correct.

 

To be rational is to behave in accordance with logic or reason.

 

There's nothing mutually exclusive about behaving rationally and having a lot of fun outside of work-- and in having a good work-life balance.

 

If your definition of rational is to be money-obsessed and devoid of emotion, then it's time to revisit your definition.

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