Poor Charlie's Almanac

"There, an aggressive subordinate made an extreme proposal for advancing Republican interests through the use of some combination of whores and a gigantic yacht. When this ridiculous request was rejected, the subordinate backed off, in gracious concession to merely asking for consent to a burglary, and the attorney general went along. [Robert] Cialdini believes that subconscious reciprocation tendency thus became one important cause of the resignation of a United States president in the Watergate debacle, and so do I." - Charlie Munger Poor Charlie's Almanac

Never heard this explanation of the cause of Watergate before. 

Poor Charlie's Almanac

"You must have the confidence to override people with more credentials than you whose cognition is impaired by incentive-caused bias or some similar psychology force that is obviously present."

"In fact, anytime anybody offers you anything with a big commission and a 200-page prospectus, don't buy it. Occasionally you will be wrong if you adopt Munger's rule. However, over a lifetime, you'll be a long way ahead - and will miss a lot of unhappy experiences that might otherwise reduce your love for your fellow man."

"And it makes sense to load up on the very few good insights you have instead of pretending to know everything about everything at all times." 

"You have to figure out where you've got an edge. And you've got to play within your own circle of competence."

Poor Charlie's Almanac

"Now, this has been a very peculiar talk for some businessman to come in and give a law school - some guy who's never taken a course in psychology telling you that all these psychology textbooks are wrong. This is very eccentric. But all I can tell you is that I'm sincere. There's a lot of simple stuff that many of you are quite capable of learning. And your lives will work way better, too, if you do. Plus, learning it is a lot of fun. So I urge you to learn it."

"...I always knew that aiming low was the best path for me, so I merely sought 1) to learn from my betters a few practical mental tricks that would help me avoid some of the worst miscognitions common in my age cohort, and 2) to pass on my mental tricks only to a few people who could easily learn from me because they already almost knew what I was telling them."

Poor Charlie's Almanac.

Poor Charlie's Almanac

Currently reading Poor Charlie's Almanac.  About 20% through the book and am enjoying it very much. One of those books you wonder why you waited so long to read it.

Charlie's basic guidelines were Preparation, Objectivity, Discipline, Patience, and Decisiveness. Some of these may seem at odds but Munger does a great job detailing why each is important. But over all was the to live in the present moment. Some other items seem so well known with Charlie and Warren Buffett always speaking about them like staying within a well defined circle of competence. Here's some more items to consider:

• "Remember that reputation and integrity are your most valuable assets - and can be lost in a heartbeat"
• "Guard against the effects of hubris and boredom."
• "Don't overlook the obvious by drowning in minutia."
• "Face your big troubles, don't sweep them under the rug."

"While poor outcomes are excusable in the Munger-Buffett world - given some outcomes are outside of their control - sloppy preparation and decision-making are never excusable because they are controllable."

"Well, the first rule is that you've got to have multiple [mental] models - because if you have just one or two that you're using, the nature of human psychology is such that you'll torture reality so that it fits your models, or at least you'll think it does."

"And models have to come from multiple disciplines - because all the wisdom of the world is not to be found in one little academic department."

"If you don't get this elementary, but mildly unnatural, mathematics of elementary probability into your repertoire, then you go through a long life like a one legged man in an ass kicking contest. You're giving a huge advantage to everyone else."

"Which models are the most reliable? Well, obviously, the models that come from hard science and engineering are the most reliable models on this earth."