Charlie Munger's 3 Categories of Investment: In, Out & Too Tough Philanthropy Wisdom

47. Charlie Munger Lesson For The Day: Part 1: Never Give Up. Einstein, JK Rowling and Jack Ma Didn’t and Neither Should You.

Billionaire J.K. Rowling was very poor before her book Harry Potter and the Philosopher’s Stone got published in 1997. Three years earlier, she was divorced, on government assistance and was having difficulty even to feed her baby. She was rejected twelve times before Bloomsbury, a  London publisher, accepted it after the Chairman’s eight year old daughter requested for a second chapter after reading the first.

In fact, you can learn a lot from failures. Bill Gates once said: “Success is a lousy teacher. It seduces smart people into thinking they can’t lose.”

What’s Charlie Munger’s take on this?

1. When it didn’t come easily, which was often, I would rag the problem, and then when I failed, I would put it aside, and I’d come back to it and rag it again.
2. No less a figure than Einstein said that one of the four causes of his achievement was self-criticism, ranking right up there alongside curiosity, concentration, and perseverance. [Sic: Perseverance was a key factor in Einstein’s success.]
3. My (third) prescription for misery is to go down and stay down when you get your first, second, third severe reverse in the battle of life. Because there is so much adversity out there, even for the lucky and wise, this will guarantee that, in due course, you will be permanently mired in misery. Ignore at all cost the lesson contained in the accurate epitaph written for himself by Epicetus: “Here lies Epicetus, a slave, maimed in body, the ultimate in poverty, and favoured by Gods.”

Overall, Charlie Munger is all for persistence, ragging the problem and not giving up. However, there are exceptions to the rule.
1. On investing: We have a method of coping: we just put it in the ‘too hard’ basket. If something is too hard, we move on to something that’s not too hard. What could be more simple?
2. On Trying Too Hard: “When things are damn near impossible, maybe you should stop trying.”

This reminds me of the movie (1939) Gone with the Wind with Clark Gable and Vivien Leigh as the main actors. For more than a decade Rhett Butler (Gable) tried to win the heart of Scarlett O’Hara (Leigh) but it was unrequited love. At the end of the movie, Scarlett asked hoping to win his heart, “Where shall I go? What shall I do?” to which Rhett Butler said: “Frankly my dear, I don’t give a damn.” Actually, many movie goers were shell-shocked as that was the first time a four letter word was used on the silver screen.

Yes, you should pursue the woman you love to win her heart but for ten years?

Jack Ma got rejected twelve times by Harvard. So, he gave up …applying to Harvard but set up Alibaba instead. But this really shows the persistence, perseverance and tenacity in the man.

Charlie Munger related a story on Max Planck, the Nobel Prize winner for Physics in 1918. “Why did Max Planck, one of the smartest people who ever lived, give up economics? The answer is, he said, ‘It’s too hard. The best solution you can get is messy and uncertain.”

In reality, giving up for a good reason is not necessarily a bad thing. But don’t giving up for want of trying.