{"id":577,"date":"2017-04-23T03:05:12","date_gmt":"2017-04-23T03:05:12","guid":{"rendered":"http:\/\/charliemungersays.com\/?p=577"},"modified":"2017-10-24T23:00:50","modified_gmt":"2017-10-24T23:00:50","slug":"87-wesco-2007-lets-learn-some-more-part-4-points-25-30","status":"publish","type":"post","link":"https:\/\/charliemungersays.com\/index.php\/2017\/04\/23\/87-wesco-2007-lets-learn-some-more-part-4-points-25-30\/","title":{"rendered":"87. Wesco 2007: Let’s Learn Some More- Part 5 – Points 25-30"},"content":{"rendered":"

\"\"<\/a>Excellent Book: Charlie Munger For All Seasons<\/a><\/a><\/strong><\/p>\n

Lesson 25. I invert: I try to figure out what I don\u2019t like and try to avoid it. It\u2019s worked wonders for me.<\/strong><\/p>\n

Using superior thinking to get ahead<\/p>\n

[Referring to his opening remarks in which Munger said \u201cAt least three times in my life, I\u2019ve gone into the other field and succeeded.\u201d I asked what those three times were. He replied:]<\/p>\n

The first two are easy: real estate development and managing money. I can\u2019t claim to have clobbered the locals in the third, so I don\u2019t want to talk about it. [Laughter]<\/p>\n

Can you give an example of giving up a closely held idea?<\/p>\n

Even as fanatical as I am about throwing away a wrong idea and grasping a successful one, I have a hard time coming up with a recent example. Certainly I\u2019ve become way more disenchanted with certain people and that seems to happen all the time. In that sense, I seem to keep learning a lot. I\u2019ve discarded so many ideas long ago that I don\u2019t have many left.<\/p>\n

Anytime you catch something just barely, where if you hadn\u2019t caught it you\u2019d be in terrible trouble, you\u2019re using a checklist, even if not consciously.<\/p>\n

I\u2019m answering the question I\u2019m capable of answering, instead of the one you asked. I invert: I try to figure out what I don\u2019t like and try to avoid it. It\u2019s worked wonders for me.<\/p>\n

Lesson 26. My favorite human misjudgment is self-serving bias: how the brain subconsciously will decide that what\u2019s good for the holder of the brain is good for everyone else. If the little me wants it, why shouldn\u2019t the little me have it?<\/strong><\/p>\n

What is your favorite human misjudgment?<\/p>\n

My favorite human misjudgment is self-serving bias: how the brain subconsciously will decide that what\u2019s good for the holder of the brain is good for everyone else. If the little me wants it, why shouldn\u2019t the little me have it? People go through life like this. I\u2019ve underestimated this phenomenon all my life. People go bonkers taking care of their own self-interest. It\u2019s a sea of miscognition. People who write the laws, people who treat patients, who experiment with rats, all suffer horribly from this bias.<\/p>\n

Hardly anything could be more important to the study of law than the study of psychology, but there\u2019s a taboo against it. You see many people who\u2019ve gotten straight A\u2019s at law school, but they screw up in dealing with self-serving bias.<\/p>\n

I would say that the current head of the World Bank [Paul Wolfowitz] had an elementary question: as head of the Bank, a lot of people hate you, so how bright do you have to be to distance yourself from a question of a large raise from your live-in girlfriend? He sent it to the lawyers, they hemmed and hawed, and he lost his moorings. Even a child shouldn\u2019t make his obvious mistake. Similarly, I\u2019d guess President Clinton would have had a better record if he\u2019d had better insight on certain subjects. Note that I carefully picked one from each party. [Laughter]<\/p>\n

Lesson 27. Not Good To Teach \u201can obsolete cataract operation\u201d when a new, better one had been developed \u201cBecause it\u2019s so wonderful to teach!\u201d It\u2019s a really human thing to cling to things most practiced.<\/strong><\/p>\n

Nuttiness in the world<\/p>\n

I once asked a doctor why he was still doing an obsolete cataract operation when a new, better one had been developed. He said, \u201cBecause it\u2019s so wonderful to teach!\u201d He only changed when patients voted with their feet. And this was at one of the best medical schools!<\/p>\n

There\u2019s a lot of miscognition. If you can just tune out all of the big folly, you\u2019d be surprised how well you can do. There\u2019s a lot of nuttiness. Who gives up an operation he likes doing and is really good at? It\u2019s a really human thing to cling to things most practiced. This happens even in physics. A lot of people cling to bad ideas. If the brightest people in the world do this, imagine everyone else. If you can train yourself not to do this, you\u2019ll be way ahead. If you come all the way to<\/p>\n

Pasadena from New Delhi to hear a guy well into his 84th year say something so obvious, not everyone would agree this is wise. [Laughter]<\/p>\n

Lesson 28. Do What You Reasonably Could with the talent, time and resources you have available.<\/strong><\/p>\n

Opportunity costs<\/p>\n

I just wanted to do the best I could reasonably do with the talent, time and resources I had available. That\u2019s what I was doing then and now. Everything is based on opportunity costs. Academia has done a terrible disservice: they teach in one sentence in first-year economics about opportunity costs, but that\u2019s it. In life, if opportunity A is better than B, and you have only one opportunity, you do A. There\u2019s no one-size-fits-all. If you\u2019re really wise and fortunate, you get to be like Berkshire. We have high opportunity costs. We always have something we like and can buy more of, so that\u2019s what we compare everything to. All of you are in the game of taking the lot you have right now and improving it based on your opportunity costs. Think of how life is simplified if you approach it this way.<\/p>\n

Lesson 29. I didn\u2019t buy a new car until I was about 60 and I was very rich before then. I wanted independence.<\/strong><\/p>\n

ADVICE ON LIFE AND OTHER COMMENTS<\/p>\n

[After his microphone stopped working temporarily:] I\u2019ve worn out the patience of my listeners, but I\u2019ve never worn out a microphone before. [Laughter]<\/p>\n

Munger\u2019s need for \u201cglorious independence\u201d<\/p>\n

There\u2019s a poem by Burns, the great Scottish poet, where he urges Scots to work hard, even connive, to get a glorious independence. You don\u2019t have to listen to me very long to know my views wouldn\u2019t be welcome everywhere, so I decided I needed glorious independence, which required that I be a man of independent means. I didn\u2019t buy a new car until I was about 60 and I was very rich before then. I wanted independence for the same reason George Bernard Shaw sent his mom out to work: I wanted to make a mental man of myself. Warren kids me about this.<\/p>\n

Lesson 30. I said I would sell the best hour of the day to myself in order to improve myself. Only then would I sell the rest of my time to my clients.<\/strong><\/p>\n

I said I would sell the best hour of the day to myself in order to improve myself. Only then would I sell the rest of my time to my clients. Of course, when I was in a demanding situation, I\u2019d make an exception. To make a man of yourself intellectually, you need to work at it. I don\u2019t think even [famed mathematician] Johnny von Neumann did it naturally. For many people it\u2019s good that they\u2019re extra busy. They\u2019re not good thinkers, so you get more out of them if they just keep doing what they\u2019re doing. But if you\u2019re a person of good cognition, you can learn a lot more if you put your mind to it. I don\u2019t think there\u2019s any substitute for just sitting and thinking.<\/p>\n

http:\/\/www.valuewalk.com\/wp-content\/uploads\/2014\/05\/Charlie-Munger-2005-2013-minus-Harvard-Westlake.pdf<\/p>\n

Notes from 2007 Wesco Financial Annual Meeting – By Whitney Tilson <\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Excellent Book: Charlie Munger For All Seasons Lesson 25. I invert: I try to figure out what I don\u2019t like<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"footnotes":""},"categories":[3,4],"tags":[],"class_list":["post-577","post","type-post","status-publish","format-standard","hentry","category-investment","category-wisdom"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/posts\/577","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/comments?post=577"}],"version-history":[{"count":5,"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/posts\/577\/revisions"}],"predecessor-version":[{"id":848,"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/posts\/577\/revisions\/848"}],"wp:attachment":[{"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/media?parent=577"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/categories?post=577"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/tags?post=577"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}