One of my intellectual heroes Charlie Munger has just passed away at the tender age of 99. I feel quite sad because on the one hand so much of my thinking and values has been based on his writings and speeches, and on the other hand, paraphrasing Charlie himself, who I am I to complain about a world in which we got to enjoy Charlie for 99 years? This post is a reflection on the impact Charlie has had on me since I first “met” him.
My first purchase of Berkshire Hathaway shares was about 15 years ago almost to the day (Nov 18, 2008). I had recently started investing my own money in 2006 as my mother reluctantly handed the reigns of an investment account she opened in my name over to me. I obviously didn’t know much about investing at the time so I used my usual method of getting up to speed: reading. Fortunately Buffett was already famous by then and I was able to pick up a forgettable book about his investing style (I later found better ones to read). None of what I read really stuck at the time, but the one thing that it did lead me to was Charlie.
I forget when I first started learning more about Charlie but my earliest post was in February 2010 referencing his USC commencement speech. This must have been around the time when I really started to appreciate his fierce intellect and dedication to rational thinking. It wasn’t an accident that a young budding mind trying to find his intellectual place in the world embraced the teaching of this wise old billionaire. Coincidentally, I had just started my PhD and had lots of time to “procrastinate” on these things as grad students wont to do. In 2010, Charlie was 86. How many grad students are spending their time admiring wise 86 year old billionaires? Probably not enough in my opinion.
It’s hard to describe how big an impact Charlie’s works have had on my life. He has not only provided me with an intellectual framework to learn worldly wisdom, but he has also shaped my values and approach to life. The combination of simple to understand (but hard to internalize) ideas, an upstanding moral code, and a track record to show that it works, made it so that I couldn’t help but become one of his “groupies” as Charlie likes to call them (his wit and catchy one liners didn’t hurt drawing me in either). I started to read and listen to him, coming back time and again to peel back yet another deeper layer of meaning that I had missed the first time. Over the past (at least) 13 years, he’s taught me countless things that have guided the way I think, behave, and live my life. Charlie was the best mentor that I ever had, even if he didn’t know it. As Charlie would put it, I “made friends among the eminent dead” except that I was lucky enough to experience him while he was still alive.
The rest of this post is a bunch of large and small ways Charlie has affected my life. It’s hard to weave (and recall) a narrative of how Charlie’s mentorship has led me to this point, so instead I’ll celebrate him by listening the myriad ways he’s helped me.
Worldly Wisdom: A Framework for Learning About the World
One of the things that immediately attracted me to Charlie was his idea of worldly wisdom, in Charlie’s own words:
“What is elementary, worldly wisdom? Well, the first rule is that you can’t really know anything if you just remember isolated facts and try and bang ’em back. If the facts don’t hang together on a latticework of theory, you don’t have them in a usable form. You’ve got to have models in your head. And you’ve got to array your experience—both vicarious and direct—on this latticework of models.”
— A Lesson on Elementary, Worldly Wisdom As It Relates To Investment Management & Business, Charles Munger, 1994.
The concept of having a latticework of mental models has guided me on how to learn things and what to learn. Fortunately coming from an engineering discipline, I naturally learned a lot of useful mental models from the hard sciences like probability, big ideas from physics, margin of safety, etc., so many of those came naturally to me. But as Charlie espouses, you can’t just rely on one discipline to explain how the world works, you need to take the most important ideas from each of the major disciplines. These ideas will carry 90% of what you need to know to explain the world.
This idea was quite profound for me because, all of a sudden, I had a framework to learn about how the world works and that knowledge was now accessible. I was no longer confined to my narrow domain of computing, but instead I simply had to pick up the big ideas from other disciplines that were not part of my formal training. I didn’t need to do a PhD in them either, I just needed to find some elementary (for the subject) ideas and learn them. It was a liberating for me.
The follow on to learning about these mental models was both internalizing and using them as second nature, which was another thing entirely. The ones that I had formal training on were much more easily to internalize (usually the ones related to math); the ones that were not part of that training took a lot longer (e.g. psychology). For most things, it’s still a process. Ironically, I feel some of my least developed mental models are on the financial / business side even though I’ve been investing my own money for over 15 years. The math is simple but there is a lot of layers underneath.
For the uninitiated, a great place to start is with Charlie’s speeches in Poor Charlie’s Almanack. Of course, many of his speeches are also on YouTube and those are also good if you want something a bit more interactive.
Introducing Me to My Other Mentors
Through Charlie, I also met with the eminent dead in Lee Kwan Yew and Herbert Simon. Lee Kwan Yew was the founding father of Singapore and one of the best political minds of the 20th century. Charlie held LKY in such high regard that he had a bust made of him (along with Benjamin Franklin). After listening to his speeches, learning from his wisdom, and reading his memoirs of the founding of Singapore, I can see why Charlie had so much admiration for him. LKY is a no-nonsense leader with a brilliant intellect and a hardcore ethic of doing what works. A couple of his memorable quotes:
“I always tried to be correct, not politically correct.”
“We are pragmatists. We don’t stick to any ideology. Does it work? Let’s try it, and if it does work, fine, let’s continue it. If it doesn’t work, toss it out, try another one. We are not enamored with any ideology.“
— Lee Kuan Yew
From LKY’s writing, I’ve refined my thinking in many ways. I’ve internalized that you can both be effective and do what’s right — there isn’t a conflict but you have to work for it. His writing has reinforced my values on working hard and smart to accomplish something worthwhile. It made me more confident not to put up with mediocrity, and to demand more from myself and others around me.
On the other end of learnings, he has also given me new perspective on non-Western schools of thought. Singapore and other Asian countries have shown you can have success that isn’t a copy of the Western democracies. It’s hard to see living within the Western world, but the prototypical American or European style of development doesn’t have to be the only way forward, this is particularly true for Asian countries with their own unique cultural, economic, and religious backgrounds.
Herbert Simon is another one of the people I greatly admire. I have only known him through his autobiography Models of My Life, which I learned about from the reading list in Poor Charlie’s Almanack. The title immediately grabbed me as I have often tried to frame my life in terms of models (a la mental models). The more I learned about this renaissance man, the more I admired him. Not only did he win the Nobel prize in economics but also the Turning award (compute science Nobel prize equivalent). One of his big contributions to economics was Bounded Rationality, one of the earliest iterations of behavioral economics. One of Simon’s core values (as seen in Bounded Rationality) is that one cannot rely only on theory and that one needs to really incorporate the empirical. This idea has stuck with me ever since graduate school, so much so that I ended naming my technical blog Bounded Rationality.
I’ve read his biography several times now and one of the reasons is that I see so many parallels of my life in his (albeit with much less grandeur). I could related to everything he talked about from teaching at university, his musings and research on AI, to his relentless focus on the empirical. And it wasn’t only his professional life, I could relate to many of his reflections on his personal life as well.
In reading about Herbert Simon, I learned more about how to do things well but more importantly, it allowed me to reflect on what I had been doing because it was so easy to see myself in him. I think this is a sign of a great mentor where they not only teach you to be better, but give you the gift of understanding yourself better too.
The Time I Met Charlie (Sort Of)
Being the hardcore Berkshire fan that I was, I went to the annual meeting three times in my life in 2013, 2014, and 2015. I almost didn’t go the first year because my friend was flip-flopping on going but luckily my girlfriend at the time, now wife, agreed to go with me (no wonder why I married her, right?). In 2013 it was a big deal because it was my last year of graduate school and I wasn’t flush with cash. Despite the low funds, we booked our flights well ahead of time, paid really high hotel fees at the Hilton Garden Inn in Omaha, and woke up extremely early to get good seats. I was glued to my seat during the Q&A while my wife listened to the intro video, a few questions, and then quickly proceeded to do some shopping at the big convention hall.
As we wrapped up the day, we were walking out of the main auditorium into the hallways when, lo and behold, we see Charlie walking out of one of the exits to board his golf cart! At that time, he must have been a young 89 but was still able to move short distances by himself but likely required transportation for longer distances. When I saw him, I was so afraid to go up and talk to him because I didn’t want to waste his time and bother him. A few nearby tourists started swarming him, luckily, there weren’t many other people around. My wife asked me why I wasn’t going up and I told her I didn’t want to bother him. She quickly jabbed me to get my phone out, grabbed it from my hand, and snapped the above photo before Charlie drove off. I’m so thankful that she did because it’s a really special memory of being up close and personal with one of your heroes, even if I didn’t really meet him. (Again, it’s no wonder why I married my wife, right?)
Rationality and Independent Thinking
“Being rational is a moral imperative. You should never be stupider than you need to be.”
— Charlie Munger
One of the deep values that I embodied from Charlie was the absolute focus on being rational. I always fancied myself as being more rational than most but here Charlie was raising the bar on the need to be rational. It’s not just a nice to have, it’s a moral imperative. For me at least, it’s so obvious, why would you want to be stupider than you need to be? And thus it wasn’t just something nice to have but a lifelong goal that I have strived for aiming to be less ignorant about the world.
The other quality about Charlie that I admired was being a true iconoclast. In his usual witty, no holds barred manner, he would attack any institution that showed the (unfortunately common) inanities of humans nature from economics departments to Bitcoin, no one was safe from his piercing critiques (of which, he was always right). This departure from “playing nice” and “following the crowd” but rather thinking independently through each situation was something that I respected immensely.
I can’t say I’m even close to reaching one percent of Charlie’s skill on both of these fronts but they have dramatically affected how I approach thinking. I strive to be both rational and to think independently — both very difficult things to do in this age of constant information flow and biased media. But what choice do I have? It’s my moral duty to be less stupid than I was yesterday.
Besides the focus on rationality, the other big area that Charlie has taught me is on how to live life well. This may seem weird to learn from an elderly billionaire but many of his ideas were distilled down from various great minds such as the Stoics, Benjamin Franklin, and the other thousands that Charlie has learned from through his insatiable reading habit. Instead of using an AI model to distill these ideas, Charlie provides a much better, curated (and dare I say more intelligent) curriculum on how to approach life.
The two big ideas in this area that I have really internalized I wrote about in my Life Lessons post:
- Understand how the world actually works and not how you wish it to be.
- The best way to get what you want is to deserve what you want.
The first one follow directly from being rational. Don’t be more stupid or ignorant than you have to be. The second one is a philosophy on how to approach life directly taken from Charlie’s mouth. There are many ways to achieve the same outcome. For example, to get rich you can lie, steal, and cheat, but this is not the best way. The best way (note: not necessarily the fastest or easiest way) is to deserve what you want. The way I interpret this is that, on average (i.e., probabilistically), this is the most likely way to reach your goal. As Charlie likes to point out, the world is not yet so irrational that this advice doesn’t hold.
This is an idea that I’ve internalized for a long time. In fact, this was one of my core philosophies on finding a partner. To find a great partner, the first thing to do was deserve a great partner i.e., being caring, confident, successful etc. Being an awkward, shy kid throughout my youth, it took a lot of work to be the person that my wife deserves. This idea was such a meaningful part of my life philosophy that I quoted it in my wedding speech:
So I’ll end with this quote from one of my favorite people, Charlie Munger: “What’s the best
way to find a good wife? It’s to deserve a good wife.” And that’s what I promise to you,
that I’ll work everyday of my life to deserve someone so amazing as you as my wife.
The other big idea that I really appreciated from Charlie was that he consistently acknowledged that life is hard (surely influenced from the Stoics). While other motivational speakers only tell you the rosy side, it doesn’t always match up with my experiences that sometimes bad things happen and you have to deal with it. Another classic Charlie quote:
“It’s not supposed to be easy. Anyone who finds it easy is stupid.“
— Charlie Munger
And the important part is that he’s not just parroting things he’s read, Charlie has suffered great tragedy in his lifetime from his son dying from cancer at the age of nine to losing sight in his left eye in his 50s due to a failed cataract surgery. Despite these setbacks, Charlie has learned to remain resilient and not suffer from self pity. For more on this subject see Charlie’s speech “How to Guarantee a Life of Misery“.
Other Ideas and Quotes
There is so much more that I learned from Charlie and if I continued I would fill a book. Instead, I’ll end this with just a small subset of the topics that he’s greatly affected my thinking on and related quotes:
On Working Hard
“Another thing you have to do, of course, is to have a lot of assiduity. I like that word because it means: sit down on your ass until you do it.“
“I constantly see people rise in life who are not the smartest, sometimes not even the most diligent, but they are learning machines. They go to bed every night a little wiser than when they got up and boy does that help — particularly when you have a long run ahead of you.“
On Approach to Life
“Spend each day trying to be a little wiser than you were when you woke up. Discharge your duties faithfully and well. Slug it out one inch at a time, day by day. At the end of the day — if you live long enough — most people get what they deserve.“
“There’s no way that you can live an adequate life without many mistakes. In fact, one trick in life is to get so you can handle mistakes. Failure to handle psychological denial is a common way for people to go broke.“
“Someone will always be getting richer faster than you, this is not a tragedy.“
On Holding on to Your Ideas
“Any year that passes in which you don’t destroy one of your best loved ideas is a wasted year.“
“Most people are trained in one model — economics, for example — and try to solve all problems in one way. You know the saying: ‘To the man with a hammer, the world looks like a nail.’ This is a dumb way of handling problems.“
On Old Age
“The best armor of old age is a well-spent life preceding it.“
“In my whole life, I have known no wise people who didn’t read all the time — none, zero.“
“Well, I think I’ve been in the top 5% of my age cohort all my life in understanding the power of incentives, and all my life I’ve underestimated it. And never a year passes but I get some surprise that pushes my limit a little farther.”
“Without numerical fluency, in the part of life most of us inhibit, you are like a one-legged man in an ass-kicking contest.“
“People calculate too much and think too little.”
On Who to Associate With
“Oh, it’s just so useful dealing with people you can trust and getting all the others the hell out of your life. It ought to be taught as a catechism. … [W]ise people want to avoid other people who are just total rat poison, and there are a lot of them.”
Thank You Charlie Munger
It’s not easy to find a great mentor but I’ve been lucky to have access to the best one I could have ever hoped for. From the bottom of my heart, I want to thank you Charlie for everything that you’ve done for me and the generosity that you’ve shown sharing your wisdom all these years. The best way that I can think of to show my appreciation is to live my life according to your teachings and be generous with sharing my wisdom with others just as you did.