And we cashier them. It would be evil not to, because terrible behavior spreads. ”http://72.14.203.104/search?q=cache:3sSZnXLbvQEJ:www.loschmanagement.com/Berkshire%2520Hathaway/Charlie%2520munger/The%2520Psychology%2520of%2520Human%2520Misjudgement.htm+%22charlie+Munger%22+%22the+way+Zeckhauser+plays+bridge%22&hl=en&gl=us&ct=clnk&cd=1
Hurdle rates:
“We’re guessing at our future opportunity cost. Warrenis guessing that he’ll have the opportunity to put capital out at high rates of return, so he’s not willing to put it out at less than 10% now. But if we knew interest rates would stay at 1%, we’d change. Our hurdles reflect our estimate of future opportunity costs.” http://www.tilsonfunds.com/
Ideas:
“It’s not the bad ideas that do you in, but the good ones.” http://www.fool.com/news/foth/2000/foth000907.htm
“Our ideas are so simple that people keep asking us for mysteries when all we have are the most elementary ideas”
http://www.feedblitz.com/f/f.fbz?PreviewFeed=7799
Independence:
“Like Warren, I had a considerable passion to get rich. “Not because I wanted Ferraris– I wanted the independence. I desperately wanted it. I thought it was undignified to have to send invoices to other people. I don’t know where I got that notion from, but I had it.’ From Buffett , The making of an American Capitalist, Roger Lowenstein at page 75. “I wanted to get rich so I could be independent, like Lord John Maynard Keynes.” ttp://www.poorcharliesalmanack.com/intro3.html
Insurance:
“I’m glad we have insurance, though it’s not a no-brainer, I’m warning you. We have to be smart to make this work.” http://www.fool.com/news/foth/2002/foth020515.htm
Immigration:
“…I’m very pleased when the smartest people come [to theU.S.] and almost never pleased when the very bottom of the mental barrel comes in….” http://www.tilsonfunds.com/brkmtg04notes.doc
“We have never had the will to enforce the immigration laws. What you see is what you’ll continue to get.” http://www.designs.valueinvestorinsight.com/bonus/bonuscontent/docs/Tilson_2006_BRK_Meeting_Notes.pdf#search=%22Charlie%20munger%20and%20foundation%20and%20croupier%22
Incentives:
“His bread I eat, his song I sing.” http://www.bluechipinvestorfund.com/munger.html
“Expect hogs to eat a lot more in the presence of a lot of hog wash.” http://blogs.barrons.com/techtraderdaily/2006/06/26/the-wit-and-wisdom-of-charlie-munger/
“If you want good behavior, don’t pay on a commission basis. Our judges aren’t paid so much a case. We keep them pretty well isolated with a fixed salary. Judges in this whole thing have come out pretty well – there have been relatively few scandals. ” http://www.tilsonfunds.com/wscmtg05notes.pdf
“I think I’ve been in the top 5% of my age cohort all my life in understanding the power of incentives, and all my life I’ve underestimated it. And never a year passes but I get some surprise that pushes my limit a little farther. ” http://www.loschmanagement.com/Berkshire%20Hathaway/Charlie%20munger/The%20Psychology%20of%20Human%20Misjudgement.htm
Index Funds
“Our standard prescription for the know-nothing investor with a long-term time horizon is a no-load index fund. I think that works better than relying on your stock broker. The people who are telling you to do something else are all being paid by commissions or fees. The result is that while index fund investing is becoming more and more popular, by and large it’s not the individual investors that are doing it. It’s the institutions.” http://www.kiplinger.com/personalfinance/features/archives/2005/11/munger2.html
“[With] closet indexing….you’re paying a manager a fortune and he has 85% of his assets invested parallel to the indexes. If you have such a system, you’re being played for a sucker.” http://www.tilsonfunds.com/wscmtg05notes.pdf
“stock brokers, in toto, will do so poorly that the index fund will do better.” http://www.tilsonfunds.com/brkmtg04notes.doc
“One could imagine a period like Japan13 years ago, however, in which indexing over time wouldn’t work.” http://www.tilsonfunds.com/
Inflation:
“One of the great defenses if you’re worried about inflation is not to have a lot of silly needs in your life – if you don’t need a lot of material goods.” http://www.tilsonfunds.com/brkmtg04notes.doc
“I think democracies are prone to inflation because politicians will naturally spend [excessively] – they have the power to print money and will use money to get votes. If you look at inflation under the Roman Empire, with absolute rulers, they had much greater inflation, so we don’t set the record. It happens over the long-term under any form of government.” http://www.tilsonfunds.com/wscmtg04notes.doc
“I see almost no change in the price of the composite product that flows through Costco I don’t feel sorry for the people who pay $27 million for an 8,000-square-foot condo in Manhattan. So inflation comes in places.” http://www.designs.valueinvestorinsight.com/bonus/bonuscontent/docs/Tilson_2006_BRK_Meeting_Notes.pdf#search=%22Charlie%20munger%20and%20foundation%20and%20croupier%22
Interest Rates:
“Neither Warren nor I have any record of making large profits from interest rate bets. That being said, all intelligent citizens of this republic think a bit about this. In my lifetime, I’ve seen interest rates range from 1% to 20%. We try to operate so that really extreme interest rates in either direction wouldn’t be too bad for us. When interest rates are in a middle range, as they are now, we’re agnostic.” http://www.fool.com/BoringPort/2000/boringport00051501.htm
Intrinsic Value:
“If you buy something because it’s undervalued, then you have to think about selling it when it approaches your calculation of its intrinsic value. That’s hard. But if you buy a few great companies, then you can sit on your $%@. That’s a good thing.” http://www.fool.com/boringport/2000/boringport000501.htm
"The basic concept of value to a private owner and being motivated when you're buying and selling securities by reference to intrinsic value instead of price momentum - I don't think that will ever be outdated." http://72.14.203.104/search?q=cache:7GV1CjDlhk8J:www.capitalideasonline.com/forum/read.
