Ideas4Life

16) Learn to handle mistakes in life

"But there's no way that you can live an adequate life without making many mistakes. In fact, one trick in life is to get so you can handle mistakes and new facts that change the odds. Life, in part, is like a poker game, wherein you have to learn to quit sometimes when holding a much loved-hand" MUNGER

2) Fairness, justice, right & wrong, good & evil -- are all illusions of the mind

"...before laying her egg in the catepillar (or grasshopper or bee) a female digger wasp carefully guides her sting into each ganglion of the prey's central nervous system so as to paralyze the animal but not kill it. This way, the meat stays fresh for the growing larva. It is not known whether the paralysis acts as a general anesthetic or if it is like curare in just freezing the victim's ability to move. If the latter, the prey might be aware of being eaten alive from inside but unable to move a muscle to do anything about it. This sounds savagely cruel, but, as we shall see, Nature is not cruel, only pitilessly indifferent. This lesson is one of the hardest for humans to learn. We cannot accept that things might be neither good nor evil, neither cruel nor kind, but simply callous: indifferent to all suffering, lacking all purpose." DAWKINS -------------- I heard Mr. Low, a sealing-master intimately acquainted with the natives (Fuegians) of this country, give a curious account of the state of a party of one hundred and fifty natives on the west coast, who were very thin and in great distress. ...From the concurrent, but quite independent evidence of the boy taken by Mr. Low, and of Jemmy Button, it is certainly true, that when pressed in winter by hunger they kill and devour their old women before they kill their dogs: the boy, being asked by Mr. Low why they did this, answered, "Doggies catch otters, old women no." This boy described the manner in which they are killed by being held over smoke and thus choked; he imitated their screams as a joke, and described the parts of their bodies which are considered best to eat. Horrid as such a death by the hands of their friends and relatives must be, the fears of the old women, when hunger begins to press, are more painful to think of; we were told that they then often run away into the mountains, but that they are pursued by the men and brought back to the slaughter-house at their own firesides! ...They cannot know the feeling of having a home, and still less that of domestic affection; for the husband is to the wife a brutal master to a laborious slave. Was a more horrid deed ever perpetrated, than that witnessed on the west coast by Byron, who saw a wretched mother pick up her bleeding dying infant-boy, whom her husband had mercilessly dashed on the stones for dropping a basket of sea-eggs! How little can the higher powers of the mind be brought into play: what is there for imagination to picture, for reason to compare, for judgment to decide upon? to knock a limpet from the rock does not require even cunning, that lowest power of the mind. Their skill in some respects may be compared to the instinct of animals; for it is not improved by experience: the canoe, their most ingenious work, poor as it is, has remained the same, as we know from Drake, for the last two hundred and fifty years. DARWIN - Voyage of the Beagle -------------- Have perspective. Remember Samuel Johnson's words: ''Distance has the same effect on the mind as on the eye" -------------- EVEN THIS WILL PASS AWAY Once in Persia reigned a king, Who upon a signet ring Carved a maxim strange and wise, When held before his eyes, Gave him counsel at a glance, Fit for every change and chance: Solemn words, and these were they: 'EVEN THIS WILL PASS AWAY." Trains, of camel through the sand Brought him gems from Samarcand; Fleets of galleys over the seas Brought him pearls to rival these, But he counted little gain, Treasures of the mine or main; 'What is wealth?' the king would say "EVEN THIS WILL PASS AWAY." 'Mid the pleasures of his court At the zenith of their sport, When the palms of all his guests Burned with clapping at his jests, Seated midst the figs and wine, Said the king: 'Ah, friends of mine,' Pleasure comes but not to stay, "EVEN THIS WILL PASS AWAY." Woman, fairest ever seen Was the bride he crowned as queen, Pillowed on the marriage-bed Whispering to his soul, he said "Though no monarch ever pressed Fairer bosom to his breast, Mortal flesh is only clay! 'EVEN THIS WILL PASS AWAY." Fighting on the furious field, Once a javelin pierced his shield, Soldiers with a loud lament Bore him bleeding to his tortured side, 'Pain is hard to bear," he cried, But with patience, day by day, "EVEN THIS WILL PASS AWAY.' Towering in a public square Forty cubits in the air, And the king disguised, unknown, Gazed upon his sculptured name, And he pondered, "What is fame?' Fame is but a slow decay! "EVEN THIS WILL PASS AWAY." Struck with palsy, sore and old, Waiting at the gates of gold, Said he with his dying breath 'Life is done, but what is Death?" Then as answer to the king Fell a sunbeam on his ring; Showing by a heavenly ray, "EVEN THIS WILL PASS AWAY." Theodore Tilten -------------- It is safe to say that enterprise which depends on hopes stretching into the future benefits the community as a whole. But individual initiative will only be adequate when reasonable calculation is supplemented and supported by animal spirits, so that the thought of ultimate loss which often overtakes pioneers, as experience undoubtedly tells us and them, is put aside as a healthy man puts aside the expectation of death. KEYNES

15) Avoid leverage; instead could use proxies like "float"

"Here were I6 extremely bright - and I do mean extremely bright - people at the top of LTCM, The average IQ among their top I6 people would probably be as high or higher than at any other organization you could find. And individually they had decades of experience - collectively, centuries of experience -- in the sort of securities in which LTCM was invested. Moreover, they had a huge amount of their own money up - and probably a very high percentage of their net worth in almost every case. So here were super-bright, extremely experienced people, operating with their own money. And yet, in effect, on that day in September, they were broke. To me, that's absolutely fascinating. In fact, there's a book with a great title - You Only Have to Get Rich Once. It's a great title, but not a very good book. (Walter Guttman wrote it many years ago.) But the title is right: You only have to get rich once. Why do very bright people risk losing something that's very important to them to gain something that's totally unimportant? The added money has no utility whatsoever -- and the money that was lost had enormous utility. And on top of that, their reputation gets tarnished and all of that sort of thing. So the gain/ loss ratio in any real sense is just incredible. Whenever a really bright person who has a lot of money goes broke, it's because of leverage. It's almost impossible to go broke without borrowed money being in the equation." BUFFETT

6) Expect only a few really worthy insights in a lifetime; bet big when they come along

"If you took the top 15 decisions out, we'd have a pretty average record. It wasn't hyperactivity, but a hell of a lot of patience. You stuck to your principles and when opportunities came along, you pounced on them with vigor. With all that vigor, you only made a decision every two years. We do more deals now, but it happened with a relatively few decisions and staying the course for decades and holding our fire until something came along worth doing." "And the wise ones bet heavily when the world offers them that opportunity. They bet big when they have the odds. And the rest of the time, they don't. It's just that simple." ------------------------------ "The Berkshire-style investors tend to be less diversified than other people. The academics have done a terrible disservice to intelligent investors by glorifying the idea of diversification. Because I just think the whole concept is literally almost insane. It emphasizes feeling good about not having your investment results depart very much from average investment results." MUNGER ------------------------------ I think you can count on more booms and busts over your remaining lifetime. How big and with what cyclicality, I can't tell you. I can tell you the best way of coping, which is just to put your head down and behave credibly every day. I will say something about life generally. I was very lucky and I had an ancestor who I never met. My mother's grandfather was a pioneer who came out to Iowa and lived in a small house with his young wife. It was a cave. He literally was a pioneer from nothing, and rose to control the leading bank in the town. He would give away nothing by himself but my great-grandmother made him a generous man and give away a lot back to society. Having wrested this success from troubles and struggles, he had this theory looking back at his long life. He owned farms at the end, and he leased them to Germans. You can't lose money leasing to Germans. He believed that real opportunities that come to you are few. Most people just get a few times to make a difference, when you find one and you can clearly recognize it. Seize it boldly and don't do it small. My mother transmitted this to me as part of family quirks, though she wasn't interested in finance. Of course, this guy was my soul mate - the great grandfather I never knew. I have totally adopted his point of view, I must say it has worked wonderfully. So I quit claim my great grandfathers' rule to you - assume your really major opportunities in life are going to be few and when you get a lollapalooza for god's sake don't hang by like a timid little rabbit. Don't hang back - there aren't that many of the really big good ones. If you take the whole history of Berkshire Hathaway, and if you take out the 20 best transactions, our record is a joke. 20 some transactions over 40 some years, that's 1 every 2 years. And we work at it all the time. Life is not just bathing you in wonderful opportunities. Even if you work at being able to find them and seize them. MUNGER

1) Purpose in human life - is necessarily self-set up; nature neither cares nor knows

"In a universe of electrons and selfish genes, blind physical forces and genetic replication, some people are going to get hurt, other people are going to get lucky, and you won't find any rhyme or reason in it, nor any justice. The universe that we observe has precisely the properties we should expect if there is, at bottom, no design, no purpose, no evil and no good, nothing but pitiless indifference. As that unhappy poet A. E. Housman put it: For nature, heartless, witless nature; Will neither care nor know -- DNA neither cares nor knows. DNA just is. And we dance to its music." DAWKINS -------------- "A universe with a God would look quite different from a universe without one. A physics, a biology where there is a God is bound to look different. So the most basic claims of religion are scientific." DAWKINS -------------- Economic Possibilities for our Grandchildren (1930) KEYNES Now it is true that the needs of human beings may seem to be insatiable. But they fall into two classes --those needs which are absolute in the sense that we feel them whatever the situation of our fellow human beings may be, and those which are relative in the sense that we feel them only if their satisfaction lifts us above, makes us feel superior to, our fellows. Needs of the second class, those which satisfy the desire for superiority, may indeed be insatiable; for the higher the general level, the higher still are they. But this is not so true of the absolute needs-a point may soon be reached, much sooner perhaps than we are all of us aware of, when these needs are satisfied in the sense that we prefer to devote our further energies to non-economic purposes. Now for my conclusion, which you will find, I think, to become more and more startling to the imagination the longer you think about it. I draw the conclusion that, assuming no important wars and no important increase in population, the economic problem may be solved, or be at least within sight of solution, within a hundred years. This means that the economic problem is not-if we look into the future-the permanent problem of the human race. Why, you may ask, is this so startling? It is startling because-if, instead of looking into the future, we look into the past-we find that the economic problem, the struggle for subsistence, always has been hitherto the primary, most pressing problem of the human race-not only of the human race, but of the whole of the biological kingdom from the beginnings of life in its most primitive forms. Thus we have been expressly evolved by nature-with all our impulses and deepest instincts-for the purpose of solving the economic problem. If the economic problem is solved, mankind will be deprived of its traditional purpose. Will this be a benefit? If one believes at all in the real values of life, the prospect at least opens up the possibility of benefit. Yet I think with dread of the readjustment of the habits and instincts of the ordinary man, bred into him for countless generations, which he may be asked to discard within a few decades. To use the language of to-day-must we not expect a general "nervous breakdown"? We already have a little experience of what I mean -a nervous breakdown of the sort which is already common enough in England and the United States amongst the wives of the well-to-do classes, unfortunate women, many of them, who have been deprived by their wealth of their traditional tasks and occupations--who cannot find it sufficiently amusing, when deprived of the spur of economic necessity, to cook and clean and mend, yet are quite unable to find anything more amusing. To those who sweat for their daily bread leisure is a longed--for sweet-until they get it. There is the traditional epitaph written for herself by the old charwoman:-- Don't mourn for me, friends, don't weep for me never, For I'm going to do nothing for ever and ever. This was her heaven. Like others who look forward to leisure, she conceived how nice it would be to spend her time listening-in-for there was another couplet which occurred in her poem:- With psalms and sweet music the heavens'll be ringing, But I shall have nothing to do with the singing. Yet it will only be for those who have to do with the singing that life will be tolerable and how few of us can sing! Of course there will still be many people with intense, unsatisfied purposiveness who will blindly pursue wealth-unless they can find some plausible substitute. But the rest of us will no longer be under any obligation to applaud and encourage them. For we shall inquire more curiously than is safe to-day into the true character of this "purposiveness" with which in varying degrees Nature has endowed almost all of us. For purposiveness means that we are more concerned with the remote future results of our actions than with their own quality or their immediate effects on our own environment. The "purposive" man is always trying to secure a spurious and delusive immortality for his acts by pushing his interest in them forward into time. He does not love his cat, but his cat's kittens; nor, in truth, the kittens, but only the kittens' kittens, and so on forward forever to the end of cat-dom. For him jam is not jam unless it is a case of jam to-morrow and never jam to-day. Thus by pushing his jam always forward into the future, he strives to secure for his act of boiling it an immortality. Thus for the first time since his creation man will be faced with his real, his permanent problem-how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well. The strenuous purposeful money-makers may carry all of us along with them into the lap of economic abundance. But it will be those peoples, who can keep alive, and cultivate into a fuller perfection, the art of life itself and do not sell themselves for the means of life, who will be able to enjoy the abundance when it comes.

8) Just avoiding standard calamities can afford a huge edge in life eg. leverage

"It is occasionally possible for a tortoise, content to assimilate proven insights of his best predecessors, to out run hares which seek originality or don't wish to be left out of some crowd folly which ignores the best work of the past. This happens as the tortoise stumbles on some particularly effective way to apply the best previous work, or simply avoids standard calamities. We try more to profit by always remembering the obvious than from grasping the esoteric. It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent." MUNGER ----------------- You only have to do a very few things right in your life so long as you don't do too many things wrong. BUFFETT ----------------- I was very lucky in my own life - because every place I looked at the pinnacle there was a guy who was better than I was - and my problem - for instance I got this best friend who was great surgeon with this vast mechanical ability and I knew what this man did with his mechanical abilities, handling all these spreaders & things he used to do his operation - I would never be as good as he was and everywhere I looked there was somebody like that. And there was all this folly out there - and I suddenly realized that if I just avoid all the folly, maybe I get a little advantage without having to be really good at anything. I kept doing that all my life and it worked so well that I enjoy sharing it with people like you. MUNGER

25) Regret about the past - a bad idea once the lesson is taken

"Long ago, William Cowper wrote: 'The darkest day, lived till tomorrow, will have passed away.' It has always been, and always will be, so. Each of our lives will have dark days. And each dark day will pass. Do not renew the darkness again and again on successive tomorrows but 'let the dead past bury its dead'. Nothing worldly lasts forever. Most troubles, unless renewed, last but for a little while. You can face worry, grief, fear and hardship knowing that: 'these, too, shall pass away'. So when confronted with the inevitable, be willing to have it so. So do not cling to it overlong. Avoid the futility of scrubbing the deck of a sinking ship; if it must sink, it will. You need, instead to seek another passage." KOPMEYER ------------------- If I drifted into my present line of work at an younger age, I would have more money now, but SO WHAT? They'll say when I die, "How much did Charlie leave?" And the answer will be, "I believe he left it all." Piling it up is not such a big deal when you have to part with it in the end. I do not regret and generally I do not think regret is any good, it's like envy, resentment and a lot of other things. I don't have a lot of regrets, I could have done it differently, had a failed marriage. I don't second-guess the past; I try to learn from the past in making decisions for the future but I don't gnash my teeth. I expect that any human being is going to make a lot of dumb decisions. I have certainly made a lot of dumb decisions in my life but as many as most people ! "I don't spend much time regretting the past, once I've taken my lesson from it. I don't dwell on it." MUNGER

17) Stand up after the worst falls in life...

"My third prescription for misery is to go down and stay down when you get your first, second or 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 Epictetus: "here lies Epictetus, a slave, maimed in body, the ultimate in poverty and favoured by the Gods". MUNGER --------------- Another thing to cope with is that life is very likely to provide terrible blows, unfair blows. Some people recover, and others don't. And there 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 become immersed in self-pity, but to utilize each terrible blow in a constructive fashion. His ideas were very sound, influencing the best of the Roman emperors, Marcus Aurelius, and many others over many centuries. --------------- I told a group this morning about an example of what I call a REAL bad employment market. My uncle Fred graduated from Harvard school of architecture with great distinction, and had a very successful practice during the 1920's when he made over $10,000 a year. When the 193o's came, the architectural building permits dried up in Omaha. That was exactly zero work to do for architects including my distinguished architect uncle. Fred, he moved to California and took drafting work at low rates for architects that still had some work... and when it got worse than that, he went to the county of Los Angeles. And in the county, they classified him as laundryman to save money and had him do drafting work. He was always exercising his skill, he never complained, but coped as best he could. His pay after deductions all through 1931 to 1934 was $101.08 per month. When they created the FHA, he gave the civil service exam and came first. For the rest of his life he was the chief architect of the FHA in LA. He had a long and happy career doing that. He never got discouraged, he never thought what he had to do was something should wail about, I never heard him complain about anything like 'woe is me'. Generally speaking, there are two things I have found in my long life one should never do: 1) never feel sorry for yourself. If your child is dying of cancer don't feel sorry for yourself. Never ever feel sorry for yourself 2) and the other thing you never want to have is envy. It's the only one of the deadly sins that you are never going to have any fun at all. If you go through life just everlastingly plugging away at these bad times... you know Kipling has gone totally out of vogue because it is not politically correct to write lines like "woman is only a woman, but a good cigar is a smoke", but Kipling's "IF" is still great poetry..."if you can keep you mind while all others are losing theirs" is good advice for wall street and everywhere else. And he said treat the two imposters - success & failure - just the same. And in the end he says whatever else happens "you will be a man by son". Good message, good message - why not take these opportunities/hardships to make a man of yourself? I know how you should cope with whatever the difficulties are -- just keep your head down and do your best. MUNGER

12) Perseverance is a good idea

"Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination are omnipotent. The slogan press on has solved and always will solve the problems of the human race. No person was ever honored for what he received. Honor has been the reward for what he gave." Calvin Coolidge --------------- Insist that your people arrive on time, even if you have to pay them a bonus to do so. Insist that telephones are answered promptly. Be eternally vigilant about the security of your clients' secrets; indiscretion in elevators and restaurants, the premature use of outside typesetters, and the display of forthcoming advertisements on notice boards can do grave damage to your clients. Sustain unremitting pressure on the professional standards of your staff. It is suicide to settle for second-rate performance. Above all, insist that due dates are kept, even if it means working all night and over the weekend. Hard work, says the Scottish proverb, never killed a man. People die of boredom and disease. There is nothing like an occasional all-night push to enliven morale - provided you are part of the push. Never leave the bridge in a storm. I have to admit that I have sometimes found the pressure unbearable; my own fault for frittering away so much time on things which lead nowhere. It is a good idea to start the year by writing down exactly what you want to accomplish, and end the year by measuring how much you have accomplished. McKinsey imposes this discipline on its partners and pays them according to how many of the things on their lists they accomplish. OGILVY --------------- "Another thing you have to do is have a lot of assiduity. I like that word because to me it means: "Sit down on your ass until you do it." I've had marvelous partners, full of assiduity, all my life. I think I got them partly because I tried to deserve them and partly because I was shrewd enough to select them, and partly there was some luck. Two partners that I chose for one phase in my life made the following simple agreement when they created a little design/build construction team in the middle of the great depression: "Two-man partnership," they said, "and divide everything equally. And, whenever we're behind in our commitments to other people, we will both work fourteen hours a day, seven days a week, until we're caught up." Well, needless to say, that firm didn't fail. And my partners were widely admired. Simple, old-fashioned ideas like theirs are almost sure to provide a good outcome." MUNGER --------------- "The way to win is to work, work, work, work and hope to have a few insights.... And you're probably not going to be smart enough to find thousands in a lifetime. And when you get a few, you really load up. It's just that simple." MUNGER

7) Do what has to be done, at the time it has to be, whether you like it or not

"Perhaps the most valuable result of all education is the ability to make yourself do the thing you have to do, when it ought to be done, whether you like it or not; it is the first lesson that ought to be learned; and however early a man's training begins, it is probably the last lesson that he learns thoroughly." Thomas HUXLEY ----------------------------- In the Ramayan, Ravan lies mortally wounded on the battlefield. Ram places his bow on the ground and walks to where Ravan lies. Lakshman watches in astonishment as his brother kneels at Ravan's feet. With palms joined, with extreme humility, Ram says, "Lord of Lanka, you abducted my wife, a terrible crime for which I have been forced to punish you. Now, you are no more my enemy. I see you now as you are known across the world, as the wise son of Rishi Vishrava. I bow to you and request you to share your wisdom with me. Please do that for if you die without doing so, all your wisdom will be lost forever to the world." To Lakshman's surprise, Ravan opens his eyes and raises his arms to salute Ram, "If only I had more time as your teacher than as your enemy. Standing at my feet as a student should, you are a worthy recipient of my knowledge. I have very little time so I cannot share much but let me tell you one important lesson I have learnt in my life. Things that are bad for you seduce you easily; you run towards them impatiently. But things that are good for you, fail to attract you. You shun them creatively, finding excuses to justify your procrastination. That is why I was impatient to abduct Sita but procrastinated in meeting you. This is the wisdom of my life, dear Ram. My last words I give to you." With these words, Ravan dies.

22) Aspire to be rational - prerequite to success in multiple aspects of life

"Rationality is not just something you do so that you can make more money, it is a binding principle. Rationality is a really good idea. You must avoid the nonsense that is conventional in one's own time. It requires developing systems of thought that improve your batting average over time." MUNGER --------------- I don't have the slightest interest in gold. I like understanding what works and what doesn't in human systems. To me that's not optional; that's a moral obligation. If you're capable of understanding the world, you have a moral obligation to become rational. And I don't see how you become rational hoarding gold. Even if it works, you're a jerk. I advise you to get involved in equities. --------------- Many people believe things from anecdotes in which there is only one case instead of a large number of cases. There are stories of different kinds of influences. Things that happened to people, and they all remember, and how do you explain that, they say. I can remember things in my life, too... So, in short, you can't prove anything by one occurrence, or two occurrences, and so on. Everything has to be checked out very carefully. Otherwise you become one of these people who believe all kinds of crazy stuff and doesn't understand the world they're in. Nobody understands the world they're in, but some people are better off at it than others. FEYNMAN --------------- Engaging in routines that allow you to maintain objectivity are, of course, very helpful to cognition. We all remember that Darwin paid special attention to disconfirming evidence, particularly when it disconfirmed something he believed and loved. Routines like that are required if a life is to maximize correct thinking. And one also needs checklist routines. They prevent a lot of errors, and not just for pilots. You should not only possess wide-ranging elementary wisdom but also go through mental checklist routines in using it. There is no other procedure that will work as well. MUNGER --------------- "Well, one time, some attractive woman sat next to Charlie and asked him what he owed his success to, and, unfortunately, she insisted on a one-word answer. He had a speech prepared that would have gone on for several hours. But, when forced to boil it down to one word, he said that he was "rational." You know, Charlie comes equipped for rationality, and he applies it in business. He doesn't always apply it elsewhere, but he applies it in business, and that's made him a huge business success" BUFFETT

24) Self pity is a terrible way to behave and so is being a "sympathy seeker"

"Self-pity can get pretty close to paranoia. And paranoia is one of very hardest things to reverse. You do not want to drift into self-pity. I had a friend who carried a thick stack of linen-based cards. And when somebody would make a comment that reflected self-pity, he would slowly and portentously pull out his huge stack of cards, take the top one and hand it to the person. The card said. "Your story has touched my heart. Never have I heard of anyone with as many misfortunes as you." Well, you can say that waggery, but I suggest it can be mental hygiene. Every time you find you're drifting into self-pity, whatever the cause, even if your child is dying of cancer, self-pity is not going to help. Just give yourself one of my friends' cards. Self-pity is always counterproductive. It's the wrong way to think. And when you avoid it, you get a great advantage over everybody else, or almost everybody else, because self-pity is a standard response. And you can train yourself out of it." MUNGER --------------- This world does not have a very good reputation for treating its temporary occupants with tender loving care. So if you want to invoke sympathy (and be a sympathy seeker), you will not lack opportunities. But if we are to cope with our problems, we need less sympathy and more determination. KOPMEYER --------------- "Whenever you think something or some person is ruining your life, it's you. A victimization mentality is so debilitating. It is actually you who are ruining your life... feeling like a victim is a perfectly disastrous way to go through life. If you just take the attitude that however bad it is in any way, it's always your fault and you just fix it as best you can — the so-called ''iron prescription" — I think that really works." --------------- "as for the recession...I think you should all just say "so what?" There are good times and there are bad times. And we know from the example of other people that if you constantly stand well by your generation, and cope with competency and grace with whatever life deals you and just keep doing it, your share of the honors and emoluments of the civilization in due time are very likely to come." --------------- "But at a certain point, you gotta say to people, "suck it in and cope buddy. Suck it in and cope." And in the '30s with my family, these families would move into the same house, and they wore the same clothes for a while. They coped. And that was part of how the civilization got through. We do not want a civilization where every hardship we go to the government and say "give me some money. The world is not what I expected." So I think there's danger in just shoveling out money too much to people who say, "my life is a little harder than it used to be." Of course it's a little harder than it used to be! This is normal worldly life. And I think it is very dangerous to assume that what people did to save the whole banking system was wrong, and that it is clearly right to shovel out a lot of money to people who are now short of money. I think we come to a place where everybody has to suck it in and cope." MUNGER

13) Go where competition is low - an ungodly important idea

"The important thing is to keep playing, to play against weak opponents and to play for big stakes" -------------------- I went where there was dumb competition (investment management). We do so well in spite of being so stupid. That's why there's hope for you! -------------------- "Don't go after large areas. Don't try to figure out if Merck's pipeline is better than Pfizer's. It's too hard. Go to where there are market inefficiencies. You need an edge. To succeed, you need to go where the competition is low. That's the best advice I can give to small investors." -------------------- "Just as in an ecosystem, people who narrowly specialize can get terribly good at occupying some little niche. Just as animals flourish in niches, similarly, people who specialize in the business world and get very good because they specialize frequently find good economics that they wouldn't get any other way." -------------------- "The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage." -------------------- "The only thing we favor is industries we can understand. And then, we like businesses with what I call "moats" around them. We like businesses that are protected in some way from competition. If you go in the drugstore and say "I want to buy a Hershey bar" and the guy says "I've got an unmarked chocolate bar that's a nickel cheaper," you'll buy the Hershey bar or you'll go across the street." -------------------- "Many markets get down to two or three big competitors—or five or six. And in some of those markets, nobody makes any money to speak of. But in others, everybody does very well. Over the years, we've tried to figure out why the competition in some markets gets sort of rational from the investor's point of view so that the shareholders do well, and in other markets, there's destructive competition that destroys shareholder wealth. If it's a pure commodity like airline seats, you can understand why no one makes any money. As we sit here, just think of what airlines have given to the world—safe travel, greater experience, time with your loved ones, you name it. Yet, the net amount of money that's been made by the shareholders of airlines since Kitty Hawk, is now a negative figure—a substantial negative figure. Competition was so intense that, once it was unleashed by deregulation, it ravaged shareholder wealth in the airline business. Yet, in other fields—like cereals, for example—almost all the big boys make out. If you're some kind of a medium grade cereal maker, you might make 15% on your capital. And if you're really good, you might make 40%. But why are cereals so profitable—despite the fact that it looks to me like they're competing like crazy with promotions, coupons and everything else? I don't fully understand it. Obviously, there's a brand identity factor in cereals that doesn't exist in airlines. That must be the main factor that accounts for it. And maybe the cereal makers by and large have learned to be less crazy about fighting for market share—because if you get even one person who's hell-bent on gaining market share.... For example, if I were Kellogg and I decided that I had to have 60% of the market, I think I could take most of the profit out of cereals. I'd ruin Kellogg in the process. But I think I could do it." -------------------- "Kellogg's and Campbell's moats have also shrunk due to the increased buying power of supermarkets and companies like Wal-Mart. The muscle power of Wal-Mart and Costco has increased dramatically." -------------------- "I am not writing off the US. I am just recognizing the reality that a new competitive force has come into the game that's hard to handle. You don't write off a country if you are a very good golfer and Tiger Woods comes along. You know this very talented collection of people and they keep going, the competition is going to be very tough. Berkshire goes out of its way to not to compete with these people here head-on. We do not like to compete against Chinese manufacturers." -------------------- "How do you compete against a true fanatic? You can only try to build the best possible moat and continuously attempt to widen it." BUFFETT/ MUNGER

3) Evolution by natural selection is the most compelling explanation of life's existence

"The theory of evolution by cumulative natural selection is the only theory we know of that is in principle capable of explaining the existence of organized complexity." -------------- "It is Darwinian natural selection. Darwin realized that the organisms alive today exist because their ancestors had traits allowing them and their progeny to flourish, whereas less fit individuals perished with few or no offspring." DAWKINS -------------- "There is a hard, irreducible, stubborn core of biological urgency, and biological necessity, and biological reason, that culture cannot reach, and that reserves the right, which sooner or later it will exercise, to judge the culture and resist and revise it." Lionel TRILLING in Beyond Culture.

14) Go for "no brainers" with margin of safety; keep things simple

"We have no system for having automatic good judgment on all investment decisions that can be made. Ours is a totally different system. We just look for no-brainer decisions. As Buffett and I say over and over again, we don't leap seven-foot fences. Instead, we look for one-foot fences with big rewards on the other side. So we've succeeded by making the world easy for ourselves, not by solving hard problems." ------------------------------ "Warren talks about these discounted cash flows. I've never seen him do one." "It's true," replied Buffett. "If (the value of a company) doesn't just scream out at you, it's too close. If you need a computer or calculator to understand a company then you shouldn't be investing!" ------------------------------ "There are things that we stay away from. We are like the man who said he had three baskets on his desk: in, out and too tough. We have such baskets - mental baskets - in our office. An awful lot of stuff goes in the "too tough" basket. If something is too hard, we on to something else. What could be more simple than that? ------------------------------ "There seems to be some perverse human characteristic that likes to make easy things difficult. I like to go for cinches. I like to shoot fish in a barrel. But I like to do it after the water has run out." ------------------------------ "Easy does it. After 25 years of buying and supervising a great variety of businesses, Charlie and l have not learned how to solve difficult business problems. What we have learned is to avoid them. To the extent we have been successful, it is because we concentrated on identifying one-foot hurdles that we could step over rather than because we acquired any ability to clear sever footers. The finding may seem unfair, but in both business and investments it is usually far more profitable to simply stick with the easy and obvious than it is to resolve the difficult." ------------------------------ "Long Term Capital Management, the well-known hedge fund recently collapsed as a result of its principals' overconfidence in their highly leveraged methods. And it collapsed despite those principals having lQ's that must have averaged 160 or more. Smart, hard-working people aren't exempt from professional disasters resulting from overconfidence. Often they just go aground in the more difficult voyages on which they choose to embark based on self appraisals in which they conclude that they have superior talents and methods." ------------------------------ The second basic approach is the one that Ben Graham used much admired by Warren and me. As one factor, Graham had this concept of value to a private owner what the whole enterprise would sell for if it were available. And that was calculable in many cases. Then, if you could take the stock price and multiply it by the number of shares and get something that was one third or less of sellout value, he would say that you've got a lot of edge going for you. Even with an elderly alcoholic running a stodgy business, this significant excess of real value per share working for you means that all kinds of good things can happen to you. You had a huge margin of safety ? as he put it ? by having this big excess value going for you. ------------------------------ "How do you get to be one of those who is a winner ? in a relative sense ? instead of a loser? Here again, look at the pari-mutuel system. I had dinner last night by absolute accident with the president of Santa Anita. He says that there are two or three betters who have a credit arrangement with them, now that they have off-track betting, who are actually beating the house. They're sending money out net after the full handle a lot of it to Las Vegas, by the way to people who are actually winning slightly, net, after paying the full handle. They're that shrewd about something with as much unpredictability as horse racing. And the one thing that all those winning betters in the whole history of people who've beaten the pari-mutuel system have is quite simple. They bet very seldom. It's not given to human beings to have such talent that they can just know everything about everything all the time. But it is given to human beings who work hard at it ? who look and sift the world for a mispriced be that they can occasionally find one. And the wise ones bet heavily when the world offers them that opportunity. "They bet big when they have the odds. And the rest of the time, they don't. It's just that simple. That is a very simple concept. And to me it's obviously right based on experience not only from the pari-mutuel system, but everywhere else. And yet, in investment management, practically nobody operates that way. We operate that way ? I'm talking about Buffett and Munger. And we're not alone in the world. But a huge majority of people have some other crazy construct in their heads And instead of waiting for a near cinch and loading up, they apparently ascribe to the theory that if they work a little harder or hire more business school students, they'll come to know everything about everything all the time." ------------------------------ Benjamin Graham's three basic ideas - and none of them are complicated or require any mathematical talent or anything of that sort - are: (1) that you should look at stocks as part ownership of a business, (2) that you should look at market fluctuations in terms of his "Mr. Market" example and make them your friend rather than your enemy by essentially profiting from folly rather participating in it, and finally, (3) the three most important words in investing are "margin of safety" - ...always building a 15,000 pound bridge if you're going to be driving 10,000 pound truck across it... So I think that it comes down to those ideas - although they sound so simple and commonplace that it kind of seems like a waste to go to school and get a Ph.D. in Economics and have it all come back to that. It's a little like spending eight years in divinity school and having somebody tell you that the ten commandments were all that counted. There is a certain natural tendency to overlook anything that simple and important" BUFFETT/ MUNGER

5) Ideas & insights make all the difference in life; copy, copy & copy wise men & great ideas

"We're always looking for something where we think we have an insight which gives us a big statistical advantage. And sometimes it comes from psychology, but often it comes from something else. And we only find a few - maybe one or two a year. We have no system for having automatic good judgment on all investment decisions that can be made. Ours is a totally different system. We just look for no-brainer decisions. As Buffett and I say over and over again, we don't leap seven-foot fences. Instead, we look for one-foot fences with big rewards on the other side. So we've succeeded by making the world easy for ourselves, not by solving hard problems." Munger -------------- "Nuture your mind with great thoughts; to beleive in the heroic makes heroes" DISRAELI -------------- What's the big idea? You can do homework from now until doomsday, but you will never win fame and fortune unless you also invent big ideas. It takes a big idea to attract the attention of consumers and get them to buy your product. Unless your advertising contains a big idea it will pass like a ship in the night. I doubt if more than one campaign in a hundred contains a big idea. I am supposed to be one of the more fertile inventors of big ideas, but in my long career as a copywriter, i have not had more than twenty, if that. Big ideas come from the unconscious. This is true in art, science and in advertising. But your unconscious has to be well informed, or your idea will be irrelevant. Stuff your conscious mind with information, then unhook your rational thought process. You can help this process by going for a long walk, or taking a hot bath, or drinking half a pint of claret. Suddenly, if the telephone line from your unconcious is open, a big idea wells up within you." OGILVY -------------- It is better to copy wise men & their ideas and WIN, rather than be original & LOOSE -------------- 'I have never made the slightest effort to compose anything original.' MOZART -------------- Take a simple idea & take it seriously; "If I am walking with two other men, each of them will serve as my teacher. I will pick out the good points of the one and imitate them, and the bad points of the other and correct them in myself." CONFUCIUS -------------- Anyway, if you want to study - you take Singapore, it had a terrible malaria problem - it was a swamp. He drained the swamps, he did not care if some little fish dies. He has a drug problem, he searches the world over for the right solution to the drug problem - he finds it in the United States. Isn't that an interesting thing? Like somebody in Singapore reading books and deciding that United States was the answer to Singapore's drug problem. He copied the military's drug policy... anybody in Singapore who pee on bottle on demand and who flunk the test go immediately into compulsory rehab. Away went the drug problem. Time after time after time he made these... he wanted the place to be prosperous. He figured out who he wanted to come in and he made the civilization very user friendly to who he wanted to attract. And it worked ! MUNGER

9) Best way to get something - deserve it; Discharge duties faithfully and well

"Well, luckily I had the idea at a very early age that the safest way to try to get what you want is to try to deserve what you want. It's such a simple idea. It's the golden rule. You want to deliver to the world what you would buy if you were on the other end. There is no ethos in my opinion that is better for any lawyer or any other person to have. By and large, the people who've had this ethos win in life, and they don't win just money and honors. They win the respect, the deserved trust of the people they deal with. And there is huge pleasure in life to be obtained from getting deserved trust." ---------------------- "Spend each day trying to be a little wiser than you were when you woke up. Discharge your duties faithfully and well. Step by step you get ahead, but not necessarily in fast spurts. But you build discipline by preparing for fast spurts... Slug it out one inch at a time, day by day, at the end of the day — if you live long enough — most people get what they deserve." "It's the work on your desk... it's the work on your desk. Do well with what you already have and more will come in" MUNGER ---------------------- "Whenever I have found out that I have blundered, or that my work has been imperfect, and when I have been contemptuously criticised, and even when I have been overpraised, so that I have felt mortified, it has been my greatest comfort to say hundreds of times to myself that "I have worked as hard and as well as I could, and no man can do more than this." I remember when in Good Success Bay, in Tierra del Fuego, thinking (and, I believe, that I wrote home to the effect) that I could not employ my life better than in adding a little to Natural Science. This I have done to the best of my abilities, and critics may say what they like, but they cannot destroy this conviction." DARWIN

10) Be reliable - compensates for many other shortcomings

"Well, so much for Carson's three prescriptions. Here are more prescriptions from Munger: First, be unreliable. Do not faithfully do what you have engaged to do. If you will only master this one habit you will more than counterbalance the combined effect of all your virtues howsoever great. If you like being distrusted and excluded from the best human contribution and company this prescription is for you. Master this one habit and you will always play the role of the hare in the fable, except that instead being outrun by one fine turtle, you will be outrun by hordes and hordes of mediocre turtles and even some mediocre turtles on crutches. I must warn you that if don't follow my first prescription it may be hard to end up miserable even if you start disadvantaged. I had a roommate in college who was and is severely dyslexic. But he is perhaps the most reliable man I have ever known. He has had a wonderful life so far, outstanding wife and children, chief executive of a multi billion dollar corporation. If you want to avoid a conventional, main culture, establishment result of this kind, you simply cant count on your other handicaps to hold you back if you persist in being reliable." MUNGER ---------------- "How you behave in one place, will help in surprising ways later." MUNGER

21) 'Hold for life' ideas/ thoughts/ people that work; find & use "what has worked"

"Worldly wisdom is mostly very, very simple. And what I am urging on you is not that hard to do if you have the will to plow through and do it. And the rewards are awesome - absolutely awesome." --------------- "What system do you use to rise into the tiny top percentage of the world in terms of having sort of an elementary practical wisdom? I've long believed that a certain system - which almost any intelligent person can learn - works way better than systems that most people use. As I said at the USC Business School, what you need is a lattice work of mental models in your head. And you hang your actual experience and your vicarious experience (that you get from reading and so forth) on this lattice work of powerful models. And with that system, things gradually get to fit together in a way that enhances cognition." MUNGER --------------- "One of my favourite business stories comes from Hershey. They get their flavour, because they make their cocoa butter in old stone grinders, that they started with in the 1800's in Pennsylvania. And the little bit of the husk of the cocoa bean winds up in the chocolate. Hershey knew enough when they wanted to expand into Canada, to know they shouldn't change their winning flavor. Therefore, they copied their stone grinders. Well, it took them five years to duplicate their own flavour. As you can see flavours can quite tricky." MUNGER --------------- When I read my psychology talks given about 15 years ago, I realized that I could now create a more logical but much longer "talk", including most of what I had earlier said. Despite four very considerable objections, I decided to publish the much expanded version. Why am I doing this? ...My third and final reason is the strongest, I have fallen in love with my way of laying out psychology because it has been so useful for me. --------------- "We are demonstrating the fundamental algorithm of life...repeat what works." MUNGER --------------- In life, in facing any problem or situation -- it is ungodly rewarding to review & list out experience (of self and importantly others) of approaches that have yielded the best results (in the most sustainable manner over long periods of time, relative to competing approaches and with plausible rational explanations) and also those that have failed and thereafter deciding on the course to be adopted. It is amazing to note the attractiveness & the almost universal applicability of this idea -- visualize just some of the cases where it is seen to be a super power -- in determining which type of advertisements work and which don't (this is all psychology of persuasion - as it is a ceteris paribus argument - from the choice of font to the background of a copy), in the choice of most attractive investments with least risk (buying businesses with a huge margin of safety), in the choice of approach to revive an economy in deep recession (Keynesian approach of large scale investing in useful public infrastructure), the desirability of avoiding leverage in life (given that this is the common factor in almost all cases where any rich and reasonably smart individual go bankrupt - a la LTCM) and so on. Ogilvy, Munger, Buffett all seem to have consciously manufactured 'winners' using this idea. Further, most people do not seem to adopt this idea especially in situations involving some degree of uncertainty -- like the model used by most people to predict reactions of others seems very crude and does not take into account (in any organized way - past experience of self and others) - say for instance seemingly crude approach in handling the media accusations relating to the 2G telecom scandal; on the contrary the amazing avoidance of any similar trouble or controversy by the Buffett & Munger. [PV] --------------- Repeat Your Winners...You aren't advertising to a standing army; you are advertising to a moving parade. The advertisement which sold a refrigerator to couples who got married last year will probably be just as successful with couples who get married this year. A good advertisement can be thought of as a radar sweep, constantly hunting new prospects as they come into the market. Get a good radar, and keep it sweeping. OGILVY --------------- There is no law which says that advertisements have to look like advertisements. If you make them look like editorial pages, you will attract more readers. Roughly six times as many people read the average article as the average advertisement. Very few advertisements are read by more than one reader in twenty. I conclude that editors communicate better than admen. Look at the news magazines which have been successful in attracting readers: Time and Newsweek in the United States, L'Express and Le Point in France, Der Spiegel in Germany, L'Espresso in Italy, Cambio 16in Spain. They all use the same graphics: The copy has priority over illustration The copy is set in serif type. Three columns of type, 35 to 45 characters wide. Every photograph has a caption. The copy starts with drop-initials. The type is set black on white. OGILVY --------------- And so the cash register was a great moral instrument when it was created. And, by the way, Patterson, the great evangelist of the cash register, knew that from his own experience. He had a little store, and his employees were stealing him blind, so that he never made any money. Then people sold him a couple of cash registers, and his store went to profit immediately. He promptly closed the store and went into the cash register business, creating what became the mighty National Cash Register Company, one of the glories of its time. "Repeat behavior that works" is a behavioral guide that really succeeded for Patterson, after he applied one added twist. And so did high moral cognition. An eccentric, inveterate do-gooder (except when destroying competitors, all of which he regarded as would-be patient thieves), Patterson, like Carnegie, pretty well gave all his money to charity before he died, always pointing out that "shrouds have no pockets". So great was the contribution of Patterson's cash register to civilization, and so effectively did he improve the cash register and spreads its use that in the end, he probably deserved the epitaph chosen for the Roman poet Horace: "I did not completely die". MUNGER

19) Develop monkey like curiosity about the world & keep asking why, why, why?

"You need to have a passionate interest in why things are happening. That cast of mind kept over long periods, gradually improves your ability to focus on reality. If you don't have the cast of mind, you are destined for failure even if you have a high IQ." ---------------- In general, learning is most easily assimilated and used when, life long, people consistently hang their experience, actual and vicarious, on a latticework of theory answering the question: Why? Indeed, the question "Why?" is a sort of Rosetta stone opening up the major potentiality of mental life. If you want to get smart, the question you have to keep asking is why, why, why? And you have to relate the answers to a structure of deep theory. You've got to know the main theories. And it's mildly laborious, but it's also a lot of fun. MUNGER ---------------- "Curiosity is one of the permanent and certain characteristics of a vigorous mind" Samuel Johnson ---------------- "Sit down before facts like a child, and be prepared to give up every preconceived Notion, follow humbly wherever and to whatever abysses Nature leads, or you shall learn nothing." Thomas Henry Huxley ---------------- "We get these questions a lot from the enterprising young. It's a very intelligent question: You look at some old guy who's rich and you ask, 'How can I become like you, except faster?'" MUNGER

11) Back oneself; after-all we hold 100% stake in our-self

IF you can keep your head when all about you Are losing theirs and blaming it on you, If you can trust yourself when all men doubt you, But make allowance for their doubting too; If you can wait and not be tired by waiting, Or being lied about, don't deal in lies, Or being hated, don't give way to hating, And yet don't look too good, nor talk too wise; If you can dream - and not make dreams your master; If you can think - and not make thoughts your aim; If you can meet with triumph and disaster And treat those two imposters just the same; If you can bear to hear the truth you've spoken Twisted by knaves to make a trap for fools, Or watch the things you gave your life to broken, And stoop and build 'em up with wornout tools; If you can make one heap of all your winnings And risk it on one turn of pitch-and-toss, And lose, and start again at your beginnings And never breathe a word about your loss; If you can force your heart and nerve and sinew To serve your turn long after they are gone, And so hold on when there is nothing in you Except the Will which says to them: "Hold on"; If you can talk with crowds and keep your virtue, Or walk with Kings - nor lose the common touch, if neither foes nor loving friends can hurt you, If all men count with you, but none too much; If you can fill the unforgiving minute With sixty seconds' worth of distance run, Yours is the Earth and everything that's in it, And - which is more - you'll be a Man, my son! RUDYARD KIPLING ----------------- There is a tendency for corporations to reject executives who do not fit their conventions. How many corporations would promote a maverick like Charlie Kettering of General Motors? How many advertising agencies would hire a 38-year-old man whose curriculum vitae read: 'Unemployed farmer, former cook and university drop-out?' (Me in the year I started Ogilvy & Mather.) OGILVY ----------------- "The best investment you can make is in YOU. You can make more money or acquire more of whatever you want - by investing in YOU than in any other investment." KOPMEYER

18) Start with an easy "entry point" in any desired journey & then chip away a bit at a time

It's quite interesting to think about Wal-Mart starting from a single store in Bentonville, Arkansas against Sears, Roebuck with its name, reputation and all of its billions. How does a guy in Bentonville, Arkansas with no money blow right by Sears, Roebuck? And he does it in his own lifetime in fact, during his own late lifetime because he was already pretty old by the time he started out with one little store....He played the chain store game harder and better than anyone else. Walton invented practically nothing. But he copied everything anybody else ever did that was smart and he did it with more fanaticism and better employee manipulation. So he just blew right by them all. He also had a very interesting competitive strategy in the early days. He was like a prizefighter who wanted a great record so he could be in the finals and make a big TV hit. So what did he do? He went out and fought 42 palookas. Right? And the result was knockout, knockout, knockout 42 times. Walton, being as shrewd as he was, basically broke other small town merchants in the early days. With his more efficient system, he might not have been able to tackle some titan head-on at the time. But with his better system, he could destroy those small town merchants. And he went around doing it time after time after time. Then, as he got bigger, he started destroying the big boys. Well, that was a very, very shrewd strategy. ---------------- Take the case of our own reading -- we struggled for years to get started but since we got hooked to audio books in 2005 there has been no looking back; same is true with our experience getting acceptance in any group for instance at business school or in TAS. ---------------- Few copywriters are ambitious. It does not occur to them that if they tried hard enough, they might double the client's sales, and make themselves famous. 'Raise your sights!' I exhort them. 'Blaze new trails! Hit the ball out of the park!! Demand of yourself the standards of the immortals!!!' Leo Burnett said it better, 'When you reach for the stars, you may not quite get one, but you won't come up with a handful of mud either.' OGILVY ---------------- When I saw this patterned irrationality, which was so extreme, and I had no theory or anything to deal with it, but I could see that it was extreme, and I could see that it was patterned, I just started to create my own system of psychology, partly by casual reading, but largely from personal experience, and I used that pattern to help me get through life. Fairly late in life I stumbled into this book, Influence, by a psychologist named Bob Cialdini, who became a super-tenured hotshot on a 2,000-person faculty at a very young age. With the push given by Cialdini's book, I soon skimmed through 3 much used text books covering introductory psychology. I also pondered considerably, while craving synthesis and taking into account all my previous training and experience. The result was Munger's partial summary of the non-patient treating, non-nature vs nurture weighing parts of non-developmental psychology. This material was stolen from its various discoverers (most of whose names I did not even try to learn), often with new descriptions and titles selected to fit Munger's notion of what makes recall easy for Munger, then revised for Munger's use easy as he seeks to avoid errors. ---------------- The system of Alcoholics Anonymous, that's certainly a constructive use of somebody understanding psychological tendencies. I think they just wandered into it, as a matter of fact, so you can regard it as kind of an practice evolution. But just because they've wandered into it doesn't mean you can't invent its equivalent when you need it for a good purpose. ---------------- "Do not decide to stop drinking forever. Just decide you will not take a drink today. Not forever. Just one day. Divide & conquer!" Alcoholics Anonymous ---------------- "My intention being to acquire the habitude of all these virtues, I judged it would be well not to distract my attention by attempting the whole at once, but to fix it on one of them at a time; and, when I should be master of that, then to proceed to another, and so on, till I should have gone thro' the thirteen." Ben FRANKLIN ---------------- The engineering idea of breakpoints that's a very powerful model. The notion of a critical mass that comes out of physics is a very powerful model. Tipping point is a very correct idea even at an individual level - its called habit; When Marley's miserable ghost says, "I wear the chains I forged in life," he is talking about chains of habit that were too light to be felt before they became too strong to be broken. The rare life that is wisely lived has in it many good habits cultivated & maintained and many bad habits avoided or cured. ---------------- "Well, if you're like me, its kind of fun for it to be a little complicated. If you want it totally easy and totally laid out, maybe you should join some cult that claims to provide all the answers. I don't think that's a good way to go. I think you'll just have to endure the world-as complicated as it is. Einstein has a marvelous statement on that: 'Everything should be made as simple as possible, but no more simple.' I'm afraid that's the way it is. If there are twenty factors and some interact, you'll just have to learn to handle it-because that's the way the world is. But you won't find it that hard if you go at it Darwin-like, step by step with curious persistence. You'll be amazed at how good you can get." MUNGER

23) Avoid evil, particularly if they are attractive members of the opposite sex

Now we're talking about a type of human wisdom that the more people learn about it, the more attenuated the wisdom gets. That's an intrinsically paradoxical kind of wisdom. But we have paradox in mathematics and we don't give up mathematics. I say damn the paradox. This stuff is wonderfully useful. And by the way, the granny's rule, when you apply it to yourself, is sort of a paradox in a paradox. The manipulation still works even though you know you're doing it. And I've seen that done by one person to another. I drew this beautiful woman as my dinner partner a few years ago, and I'd never seen her before. Well, she's married to prominent Angelino, and she sat down next to me and she turned her beautiful face up and she said, "Charlie," she said, "What one word accounts for your remarkable success in life?" And I knew I was being manipulated and that she'd done this before, and I just loved it. I mean I never see this woman without a little lift in my spirits. And by the way I told her I was rational. You'll have to judge yourself whether that's true. I may be demonstrating some psychological tendency I hadn't planned on demonstrating. MUNGER

20) Cultivate & maintain good mental habits - can afford a huge advantage

The brain of man conserves programming space by being reluctant to change, which is a form of inconsistency avoidance. We see this in all human habits, constructive and destructive. Few people can list a lot of bad habits that they have eliminated, and some people cannot identify even one of these. Instead, practically everyone has a great many bad habits he has long maintained despite their being known as bad. Given this situation, it is not too much in many cases to appraise early-formed habits as destiny. When Marley's miserable ghost says, "I wear the chains I forged in life," he is talking about chains of habit that were too light to be felt before they became too strong to be broken. ---------------------- There is no reason to believe that the Fuegians decrease in number; therefore we must suppose that they enjoy a sufficient share of happiness, of whatever kind it may be, to render life worth having. Nature by making habit omnipotent, and its effects hereditary, has fitted the Fuegian to the climate and the productions of his miserable country. DARWIN - Voyage of the Beagle ---------------------- The rare life that is wisely lived has in it many good habits cultivated & maintained and many bad habits avoided or cured. And the great rule that helps here is again from Franklin's Poor Richard's Almanack: "An ounce of prevention is worth a pound of cure." What Franklin is here indicating, in part, is that Inconsistency-Avoidance Tendency makes it much easier to prevent a habit than to change it. ---------------------- It is easy to see that a quickly reached conclusion, triggered by Doubt-Avoidance Tendency, when combined with a tendency to resist any change in that conclusion, will naturally cause a lot of errors in cognition for modern man. And so it observably works out. We all deal much with others whom we correctly diagnose as imprisoned in poor conclusions that are maintained by mental habits they formed early and will carry to their graves. So great is the bad-decision problem caused by Inconsistency-Avoidance Tendency that our courts have adopted important strategies against it. For instance, before making decisions, judges and juries are required to hear long and skillful presentations of evidence and argument from the side they will not naturally favor, given their ideas in place. And this helps prevent considerable bad thinking from "first conclusion bias." Similarly, other modern decision makers will often force groups to consider skillful counterarguments before making decisions. ---------------------- So if your professors won't give you an appropriate multi-disciplinary approach, if each wants to overuse his own models, and under use the important models in other disciplines - you can correct that folly yourself. Just because, he is a horse's patoot, you don't have to be one too. You can reach out and grasp the model that better solves the overall problem. All you have to do is know it and develop the right mental habits. MUNGER

4) What really matters - an enjoyable state of mind through an entire life time; a life well spent

There is no such thing as a problem-free life; but how we experience and react to our problems depends on us. Happiness is not a life without problems, but rather the strength to overcome the problems that come our way. -------------- What we should compare is not ourselves against others. We should compare who we are today against who we were yesterday, who we are today against who we will be tomorrow. While this may seem simple and obvious, true happiness is found in a life of constant advancement. Problems resolved with courage and wisdom can be a source of joy. -------------- The secret to happiness is to lower your expectations. MUNGER -------------- "The best armour of old age is a well spent life preceding it; a life employed in the pursuit of useful knowledge, in honourable actions and the practice of virtue; in which he who labours to improve himself from his youth, will in age reap the happiest fruits of them." CICERO