All I Want To Know Is Where I'm Going To Die So I'll Never Go There: Buffett & Munger – A Study in Simplicity and Uncommon, Common Sense - By Peter Bevelin
Date read: 2024-11-11How strongly I recommend it: 9/10
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Told in the style of a fictitious tale of a "Seeker" visiting a "Library of Wisdom" where he is bestowed life lessons from the Librarian, along with Charlie Munger and Warren Buffett. A collection of advice and sayings from both Munger and Buffett that covers everything from life, business, and investing advice.
My Notes
Of course, there's going to be some failure in making the correct decisions...I think it's important to review your past stupidities so you are less likely to repeat them, but I'm not gnashing my teeth over it or suffering or enduring it. I regard it as perfectly normal to fail and make bad decisions.
Wrong decisions are part of life. Being able to make them work out anyway is one of the abilities of those who are successful.
I particularly recommend attention to the idea that an ounce of prevention is worth a pound of cure - except it really isn't often a mere pound. An ounce of prevention is often worth a ton of cure.
Neither Warren nor I is smart enough to make...decisions with no time to think...We make actual decisions very rapidly, but that's because we've spent so much time preparing ourselves by quietly sitting and reading and thinking.
"Anyone who is too busy, never has time to think."
It is better to try to be consistently not stupid than to be very intelligent.
When Charlie thinks about things, he starts by inverting. To understand how to be happy in life, Charlie will study how to make life miserable; to examine how businesses become big and strong, Charlie first studies how businesses decline and die; most people care more about how to succeed in the stock market, Charlie is most concerned about why most have failed in the stock market.
If my job was to pick a group of 10 stocks in the Dow Jones average that would outperform the average itself, I would probably not start by trying to pick the 10 best. Instead, I would try to pick the 10 or 15 worst performers and take them out of the sample, and work with the residual. It's an inversion process...Start out with failure, and then engineer its removal.
The mental process that really has worked for me my whole life, and I use it all the time, is turning everything into reverse. I figure out what I don't like instead of figuring out what I like in order to get what I like.
I like to deal with people where I feel a one-pager contract would do the job. If I have to have 50 pages in there to protect me against the guy I'm dealing with, I'll always wonder if I needed 51.
Learn from history and when you later see something ask, "Have I seen this before or has this happened before and what happened then?" What normally happens in similar situations? Why should this be any different?
More important than the will to win is the will to prepare.
Human behavior stays the same - only the objects of the folly changes.
It's not the bad idea that do you in - it's the good idea that is carried to excess.
We derive no comfort because important people, vocal people, or great numbers of people agree with us. Nor do we derive comfort if they don't. A public opinion poll is no substitute for thought...We don't read other people's opinions. We want to think. We want to get the facts, and then think.
The difference between successful people and very successful people is that very successful people say 'no' to almost everything.
I think the attitude of Epictetus helps guide one to the right reaction. He thought that every mischance in life, however bad, created an opportunity to behave well. He believed every mischance provided an opportunity to learn something useful. And one's duty was not to become immersed in self-pity, but to utilize each terrible blow in a constructive fashion.
It takes twenty years to build a reputation and five minutes to ruin it.
Learning what you don't want to do is just as important as learning what you do want to do.
The important thing in your circle of competence is not how big the circle is. It isn't the area of it. It's how well you define the perimeter. So you know when you are in it, and you know when you are outside of it.
Avoid dealing with people of questionable character. Walk away if you can. Remember the saying, "Don't fight with a pig, you'll just get dirty and the pig likes it."
We are willing to look foolish as long as we don't feel we have acted foolishly.
Force yourself to actively look for counter-evidence.
When you think you have arrived to a correct decision, consider that the opposite of what you want to happen, could happen. And then try to think about what factors can cause what you don't want to happen to happen.
Praise by name, criticize by category.
Asking a favor of someone is likely to increase that person's liking for us since people want to be consistent with their behavior.
Change perspective - don't believe others see the world as you do - instead try to see the world through the other side's eyes - from their perspective. Many times, if we could see the world the way others see it, we more easily understand why they do what they do.
I have what I call an 'iron prescription' that helps me keep sane when I drift toward preferring one intense ideology over another. I feel that I'm not entitled to have an opinion unless I can state the arguments against my position better than the people who are in the opposition. I think that I am qualified to speak only when I've reached that state.
When you want to question someone's opinion on a complex policy, don't ask them to give you reasons for why they believe as they do - it only makes them defensive and often they stick to their beliefs even harder. Instead ask them to explain in detail how the policy would actually work in reality to accomplish the desired goals - how it step by step could be implemented - the steps and mechanisms involved in getting it done. and also if they have thought through other effects.
Richard Feynman had a great question to the speaker when he listened to a talk in the field he didn't know well. 'Can you give me a really simple example of what you're talking about?' If the speaker couldn't oblige, Feynman got suspicious...Did this person really have something to say, or was this just fancy technical talk parading as scientific wisdom?
On start-ups: The early bird might get the worm, but the second mouse gets the cheese.
We try to think about things that are both important and knowable. There are important things that are not knowable...And there are things that are knowable, but not important - and we don't want to clutter up our minds with those. We ask ourselves: 'What's important and knowable? And what among those things can we translate into some kind of action that's useful for Berkshire?'
The most important question to ask in economics is 'X happens, and then what?' Actually, it's not such a bad idea to ask it about everything. But you should always ask, 'And then what?'...What else does that mean?
Try to find out what is different when things go wrong. What was different - the underlying conditions, some variable, the behavior - when you had the problem compared to what normally happens in similar situations. Or if a problem persist over time, what factor, etc. is consistently different when we have problems? Also, ask 'what normally causes this kind of problem?' It could of course also have been a pure random event.
You need very few good ideas in your lifetime. You have to be willing to have the discipline to say, 'I'm not going to do something I don't understand.'