Insight: Warren Buffet met Charlie Munger in Omaha in 1959 where they both grew up, and were introduced by Buffet's neighbours, the Davis'.
Insight: Warren Buffet convinced Charlie Munger to quit practicing law and concentrate on investing.
Insight: Munger and Buffet had the same view toward investing - purchasing assets discounted to their underlying value, and owning investments long term.
Insight: Buffet credits Charlie Munger for helping him to understand the value of studying our mistakes, not just concentrating on success.
"We like to keep things simple, so the chairman can sit around and read annual reports."- Charlie Munger
Insight: Munger believed in the value of simplicity, and focus on a few high value actions.
"I knew I could handle the bumps psychologically, because I was raised by people who believe in handling bumps."- Charlie Munger
Insight: Munger saw the value of time and compounding, and that owning as few as three stocks is plenty.
"For an ordinary individual, the best thing you already have should be your measuring stick... If the new thing you are considering purchasing is not better than what you already know is available, then it hasn’t met your threshold. This screens out 99 percent of what you see."- Charlie Munger
Insight: Munger's understanding of how human psychology impacts investors greatly influenced the operations of Berkshire Hathaway.
Insight: Munger believed that a key problem is that our brain takes shortcuts in analysis and conclusion making, making us prone to manipulation and being misled.
"Personally, I’ve gotten so that I now use a kind of two-track analysis... First, what are the factors that really govern the interests involved, rationally considered. And second, what are the subconscious influences where the brain at a subconscious level is automatically doing these things—which by and large are useful, but which often misfunction."- Charlie Munger
"I came to the psychology of misjudgment almost against my will; I rejected it until I realised my attitude was costing me a lot of money."- Charlie Munger
Insight: Munger influenced behavioural finance. He noticed predictable patterns of extreme irrationality in people.