"Poor Charlie's Almanack: The Wit and Wisdom of Charles T. Munger (Fully Revised Edition) (The Bible of Value Investing, A Treasury of Life Wisdom. Newly Upgraded Edition Released! 97-Year-Old Charlie Munger is Still Learning and Improving. How Can We Stop Self-Improvement?)" Reading Notes

"Poor Charlie's Almanack: The Wisdom of Charlie Munger (Fully Revised Edition) (The Bible of Value Investing, A Treasure of Life Wisdom. Newly Upgraded Edition Released! 97-year-old Charlie Munger is still continuously learning and improving. How can we stop self-renewal?)" Reading Notes#

Author: Peter Kaufman
Reading Time: 13 hours

These are the notes and excerpts I recorded while reading "Poor Charlie's Almanack: The Wisdom of Charlie Munger (Fully Revised Edition) (The Bible of Value Investing, A Treasure of Life Wisdom. Newly Upgraded Edition Released! 97-year-old Charlie Munger is still continuously learning and improving. How can we stop self-renewal?)" on WeChat Reading.

Table of Contents#

For the wise, a single word reveals the secret of the universe.

"No country has ever declined because of trade."

For the wise, a single word reveals the secret of the universe.

"No country has ever declined because of trade."

Dedicated to Charlie Munger#

Acquire universal wisdom,

Preface in Chinese: There is a House of Gold in the Book#

Buffett says that stocks are essentially partial ownership of a company, and the price of a stock is determined by its value, which is the value of the company. The value of a company is determined by its profitability and net assets. Although the fluctuations in stock prices are difficult to predict in the short term, they are ultimately determined by the company's value in the long term. A smart investor can make a lot of money with minimal risk by buying when the stock price is far below the company's actual value and selling when the price is close to or above its value.

Charlie always starts his thinking from the reverse. To understand how to achieve happiness in life, Charlie first studies how life can become painful; to study how a business can grow strong and large, Charlie first studies how businesses decline; while most people are more concerned with how to succeed in stock market investments, Charlie is most concerned with why most people fail in stock market investments. His way of thinking comes from the philosophy contained in the following farmer's proverb: I just want to know where I will die in the future, so I won't go there.

In his view, the universe and everything in it is an interactive whole, and all human knowledge is part of the attempt to study this whole. Only by combining this knowledge and integrating it into a framework of thought can it help in making correct judgments and decisions. Therefore, he advocates learning the truly important theories in all disciplines and forming what is called "universal wisdom" based on this, using it as a tool to study important issues in the field of business investment.

But the real reason Charlie wants to say is the third point: "What I want in my life is to engage life, not to be isolated."

Charlie has spent his life studying the reasons for human failure, so he has a profound understanding of human weaknesses. Based on this, he believes that one must be strict with oneself and continuously improve one's character throughout life to overcome the inherent weaknesses of human nature. This way of life is a moral requirement for Charlie. To outsiders, Charlie may seem like an ascetic, but to Charlie, this process is both rational and enjoyable, allowing one to live a successful and happy life.

For example, when someone asks Charlie how to find an excellent partner, Charlie says the best way is to make oneself worthy of her/him, because excellent partners are not fools. In his later years, Charlie often quotes the words of the truth knight from "The Pilgrim's Progress" to conclude his speeches: "My sword is left to those who can wield it."

Buffett says that stocks are essentially partial ownership of a company, and the price of a stock is determined by its value, which is the value of the company. The value of a company is determined by its profitability and net assets. Although the fluctuations in stock prices are difficult to predict in the short term, they are ultimately determined by the company's value in the long term. A smart investor can make a lot of money with minimal risk by buying when the stock price is far below the company's actual value and selling when the price is close to or above its value.

Charlie always starts his thinking from the reverse. To understand how to achieve happiness in life, Charlie first studies how life can become painful; to study how a business can grow strong and large, Charlie first studies how businesses decline; while most people are more concerned with how to succeed in stock market investments, Charlie is most concerned with why most people fail in stock market investments. His way of thinking comes from the philosophy contained in the following farmer's proverb: I just want to know where I will die in the future, so I won't go there.

In his view, the universe and everything in it is an interactive whole, and all human knowledge is part of the attempt to study this whole. Only by combining this knowledge and integrating it into a framework of thought can it help in making correct judgments and decisions. Therefore, he advocates learning the truly important theories in all disciplines and forming what is called "universal wisdom" based on this, using it as a tool to study important issues in the field of business investment.

But the real reason Charlie wants to say is the third point: "What I want in my life is to engage life, not to be isolated."

Charlie has spent his life studying the reasons for human failure, so he has a profound understanding of human weaknesses. Based on this, he believes that one must be strict with oneself and continuously improve one's character throughout life to overcome the inherent weaknesses of human nature. This way of life is a moral requirement for Charlie. To outsiders, Charlie may seem like an ascetic, but to Charlie, this process is both rational and enjoyable, allowing one to live a successful and happy life.

For example, when someone asks Charlie how to find an excellent partner, Charlie says the best way is to make oneself worthy of her/him, because excellent partners are not fools. In his later years, Charlie often quotes the words of the truth knight from "The Pilgrim's Progress" to conclude his speeches: "My sword is left to those who can wield it."

Preface: Buffett on Munger#

A partner who never follows the crowd and possesses strong logical reasoning abilities is one of the best mechanisms you can have. — Buffett

First, find someone smarter and wiser than you. Once you find him, ask him not to flaunt his superiority over you, so you can receive praise for many achievements that stem from his ideas and suggestions. You want a partner who, when you make a costly mistake, will neither say "I told you so" nor get angry with you. He should also be generous, willing to invest his own money and work hard for you without expecting compensation. Finally, this partner should bring you joy as you travel together on the long road.

A partner who never follows the crowd and possesses strong logical reasoning abilities is one of the best mechanisms you can have. — Buffett

First, find someone smarter and wiser than you. Once you find him, ask him not to flaunt his superiority over you, so you can receive praise for many achievements that stem from his ideas and suggestions. You want a partner who, when you make a costly mistake, will neither say "I told you so" nor get angry with you. He should also be generous, willing to invest his own money and work hard for you without expecting compensation. Finally, this partner should bring you joy as you travel together on the long road.

Introduction#

Live and learn, maintain curiosity about knowledge, remain calm in the face of challenges, avoid jealousy and hatred, keep your word, learn from others' mistakes, have perseverance, maintain an objective attitude, and be willing to test your beliefs, etc.

Biography of Charlie Munger#

Making friends with 'great men who have passed away' sounds fun, but if you actually become friends with those great thinkers in life, I believe you will live a better life and receive a better education. This method is much better than simply providing some basic concepts.

The idea that one can become great without being a good person is completely wrong. I can guarantee that true greatness in this world is always accompanied by true moral integrity.

Making friends with 'great men who have passed away' sounds fun, but if you actually become friends with those great thinkers in life, I believe you will live a better life and receive a better education. This method is much better than simply providing some basic concepts.

The idea that one can become great without being a good person is completely wrong. I can guarantee that true greatness in this world is always accompanied by true moral integrity.

Praise for the Elderly: Munger on Old Age#

Cicero never liked to complain about personal misfortunes and always had reasons. For example, he believed that elderly people should not complain about the decline of sexual ability but should be happy about it, as their chances of being shamed by sexual scandals or contracting sexually transmitted diseases are greatly reduced.

The most famous paragraph in "On Old Age" is the remarkable summary: "The best armor for old age is a life well spent before it, a life devoted to the pursuit of useful knowledge, glorious achievements, and noble conduct; those who live such a life have dedicated themselves to self-improvement since their youth and will reap the happiest fruits of their efforts in old age; this is not only because useful knowledge, glorious achievements, and noble conduct will accompany them throughout their lives, even until the last moment of their lives, but also because witnessing the conscience of a righteous life and recalling past glorious achievements will bring supreme comfort to the soul."

Those who are eager to teach should remember the lesson left by Shaw's death: characters like the gadfly are rarely welcomed by the world, with a few exceptions, because they combine wisdom with moral preaching.

The best armor for old age is a life well spent before it. — Charlie Munger

Cicero never liked to complain about personal misfortunes and always had reasons. For example, he believed that elderly people should not complain about the decline of sexual ability but should be happy about it, as their chances of being shamed by sexual scandals or contracting sexually transmitted diseases are greatly reduced.

The most famous paragraph in "On Old Age" is the remarkable summary: "The best armor for old age is a life well spent before it, a life devoted to the pursuit of useful knowledge, glorious achievements, and noble conduct; those who live such a life have dedicated themselves to self-improvement since their youth and will reap the happiest fruits of their efforts in old age; this is not only because useful knowledge, glorious achievements, and noble conduct will accompany them throughout their lives, even until the last moment of their lives, but also because witnessing the conscience of a righteous life and recalling past glorious achievements will bring supreme comfort to the soul."

Those who are eager to teach should remember the lesson left by Shaw's death: characters like the gadfly are rarely welcomed by the world, with a few exceptions, because they combine wisdom with moral preaching.

The best armor for old age is a life well spent before it. — Charlie Munger

Friends Say#

"Find what you are best at and persistently and joyfully do it well."

"The Heavenly Father does not need our worship or praise, for His greatness is beyond our praise; apart from that, I can think of no other reason."

"Find what you are best at and persistently and joyfully do it well."

"The Heavenly Father does not need our worship or praise, for His greatness is beyond our praise; apart from that, I can think of no other reason."

Munger, Toles & Olsen Law Firm#

"The best way to bring in new clients is to do your desk work well."

Charlie Munger's Philanthropic Lessons#

Creating value from funds is equally important in both philanthropy and investment. This is the conclusion of another important lesson from Charlie Munger.

Franklin on Aging#

I would not refuse to live my life over from beginning to end: I only wish to have the privilege that only a writer has, to correct the mistakes of the first edition in the reprinted life. The tragedy of life is that we always grow old too quickly and become wise too slowly. By the time you stop correcting, you are no longer around.

Our experiences often validate a long-held belief: as long as you are prepared, seizing a few opportunities in life and quickly taking appropriate action to do simple and logical things can greatly increase your wealth in this lifetime. The opportunities mentioned above are rare; they usually fall to those who are constantly searching and waiting, filled with a desire for knowledge and eager to analyze various possibilities. When such opportunities arise, if the chances of winning are extremely high, then you can heavily bet on the resources gained from past caution and patience. — Charlie Munger

I would not refuse to live my life over from beginning to end: I only wish to have the privilege that only a writer has, to correct the mistakes of the first edition in the reprinted life. The tragedy of life is that we always grow old too quickly and become wise too slowly. By the time you stop correcting, you are no longer around.

Our experiences often validate a long-held belief: as long as you are prepared, seizing a few opportunities in life and quickly taking appropriate action to do simple and logical things can greatly increase your wealth in this lifetime. The opportunities mentioned above are rare; they usually fall to those who are constantly searching and waiting, filled with a desire for knowledge and eager to analyze various possibilities. When such opportunities arise, if the chances of winning are extremely high, then you can heavily bet on the resources gained from past caution and patience. — Charlie Munger

Chapter Two: Munger's Life, Learning, and Decision-Making Methods#

Think simply and act seriously. — Charlie Munger

Munger's "Multidisciplinary Mental Models" for Business Analysis and Evaluation#

You must know the important theories of important disciplines and use them frequently — use all of them, not just a few.

As John Muir said about the interconnectedness of nature: "If we try to understand something that seems to exist independently, we will find that it is connected to everything else in the universe."

Simplicity is the result of long-term hard work, not the starting point. — Frederick Maitland

Charlie believes that preparing for the future, being patient, being strict with oneself, and being impartial are the most basic guiding principles.

Perhaps the most valuable outcome of all education is that when you have to complete a task, regardless of whether you like it, you have the ability to accomplish that necessary task. This is the first lesson everyone should learn; however, regardless of how early a person receives education, this may be the last lesson they thoroughly learn. — Thomas Henry Huxley

"Scientific theories should be as simple as possible, but not overly simple." Charlie himself has said: "What I oppose most is being overly confident and too sure that you understand that your action is more beneficial than harmful. You are dealing with highly complex systems in which everything interacts with everything else."

Quickly eliminate what should not be done, then launch a skilled, interdisciplinary attack on what should be done, and then, when the right opportunity arises — only when the right opportunity arises — take decisive action.

What troubles you is not bad ideas, but good ideas. You might say, "That's impossible. That's contradictory." What he (Graham) means is that if something is a bad idea, you won't overdo it. But if something is a good idea, containing important truths, then you can't ignore it. Then you can easily overdo it. So, if you overdo them, those good ideas are a great way to suffer terrible consequences. — Charlie Munger

You must know the important theories of important disciplines and use them frequently — use all of them, not just a few.

As John Muir said about the interconnectedness of nature: "If we try to understand something that seems to exist independently, we will find that it is connected to everything else in the universe."

Simplicity is the result of long-term hard work, not the starting point. — Frederick Maitland

Charlie believes that preparing for the future, being patient, being strict with oneself, and being impartial are the most basic guiding principles.

Perhaps the most valuable outcome of all education is that when you have to complete a task, regardless of whether you like it, you have the ability to accomplish that necessary task. This is the first lesson everyone should learn; however, regardless of how early a person receives education, this may be the last lesson they thoroughly learn. — Thomas Henry Huxley

"Scientific theories should be as simple as possible, but not overly simple." Charlie himself has said: "What I oppose most is being overly confident and too sure that you understand that your action is more beneficial than harmful. You are dealing with highly complex systems in which everything interacts with everything else."

Quickly eliminate what should not be done, then launch a skilled, interdisciplinary attack on what should be done, and then, when the right opportunity arises — only when the right opportunity arises — take decisive action.

What troubles you is not bad ideas, but good ideas. You might say, "That's impossible. That's contradictory." What he (Graham) means is that if something is a bad idea, you won't overdo it. But if something is a good idea, containing important truths, then you can't ignore it. Then you can easily overdo it. So, if you overdo them, those good ideas are a great way to suffer terrible consequences. — Charlie Munger

Munger's Investment Evaluation Process#

Thomas Watson said: "I am not a genius. I have a few smart points, and I just stay within those points."

If we have any ability, it is that we can figure out when we are operating at the center of our circle of competence and when we are approaching the edge. — Warren Buffett

If you truly have competence, you will be very clear about where the boundaries of your circle of competence are. If you have to ask (whether you have exceeded your circle of competence), that means you are already outside the circle. — Charlie Munger

Independent thinking about whether you are right or wrong does not depend on whether others agree with you. You are right because your data and reasoning are correct. — Benjamin Graham

In business, the most difficult thing is to first get yourself to think, and then get others to think. — Harvey Firestone

Use logic, avoid fooling yourself. Charlie will not accept something just because it is what I said, although most people in the world would do that. — Warren Buffett

Don't fool yourself; remember, you are the easiest person to fool. — Richard Feynman

If you want to be competitive in any field, you must master all aspects of that field skillfully, whether you like it or not; this is determined by the deep structure of the human brain. — Charlie Munger

Most players derive pleasure from being accepted by the group or from a sense of belonging to the group. However, good players derive pleasure from their ability to handle various situations in the game. — John Fein

Investing is like playing baseball; to increase the score on the scoreboard, you must focus on the field, not on the scoreboard. — Warren Buffett

Thomas Watson said: "I am not a genius. I have a few smart points, and I just stay within those points."

If we have any ability, it is that we can figure out when we are operating at the center of our circle of competence and when we are approaching the edge. — Warren Buffett

If you truly have competence, you will be very clear about where the boundaries of your circle of competence are. If you have to ask (whether you have exceeded your circle of competence), that means you are already outside the circle. — Charlie Munger

Independent thinking about whether you are right or wrong does not depend on whether others agree with you. You are right because your data and reasoning are correct. — Benjamin Graham

In business, the most difficult thing is to first get yourself to think, and then get others to think. — Harvey Firestone

Use logic, avoid fooling yourself. Charlie will not accept something just because it is what I said, although most people in the world would do that. — Warren Buffett

Don't fool yourself; remember, you are the easiest person to fool. — Richard Feynman

If you want to be competitive in any field, you must master all aspects of that field skillfully, whether you like it or not; this is determined by the deep structure of the human brain. — Charlie Munger

Most players derive pleasure from being accepted by the group or from a sense of belonging to the group. However, good players derive pleasure from their ability to handle various situations in the game. — John Fein

Investing is like playing baseball; to increase the score on the scoreboard, you must focus on the field, not on the scoreboard. — Warren Buffett

Investment Principles Checklist#

"A smart pilot, no matter how talented or experienced, will never fly without a checklist."

"Only in fairy tales does the emperor get told he is not wearing any clothes."

Remember, whether you are right or wrong does not depend on whether others agree or disagree with you — the only thing that matters is whether your analysis and judgment are correct.

If you eliminate our 15 best decisions, our performance would be very mediocre. What you need is not a lot of action, but a lot of patience. You must stick to your principles, and when the opportunity arises, you seize it with force. There are many situations that are far worse than being flooded with cash and doing nothing. I remember the times when I lacked cash — I do not want to go back to that time. — Charlie Munger

Cultivate yourself into a lifelong learner through extensive reading; nurture curiosity, and strive to make yourself a little smarter every day.

The willingness to be prepared is more important than the willingness to win.

Humility — acknowledging your ignorance is the beginning of wisdom.

Most importantly, do not fool yourself, and remember, you are the easiest person to fool.

Distinguish between value and price, process and action, wealth and scale.

Remember that simplicity is better than mastering the profound.

"Heaven has not granted humanity the gift of knowing everything about everything at all times. But for those who strive to find mispriced bets in the world, heaven sometimes grants them such a bet."

Good ideas are particularly rare — when the timing is right for you, bet heavily (allocate capital).

"Compound interest is the eighth wonder of the world" (Einstein), do not interrupt it unless necessary.

Enjoy the results, and enjoy the process, because you live in the process.

"A person's task is not to see the distant blurry things clearly, but to do well the clear things around them." — Charlie's summary

Be fearful when others are greedy; be greedy when others are fearful.

Opportunities do not come often, so when they do, seize them.

Recognize and adapt to the true nature of the world around you; do not expect it to adapt to you.

"A smart pilot, no matter how talented or experienced, will never fly without a checklist."

"Only in fairy tales does the emperor get told he is not wearing any clothes."

Remember, whether you are right or wrong does not depend on whether others agree or disagree with you — the only thing that matters is whether your analysis and judgment are correct.

If you eliminate our 15 best decisions, our performance would be very mediocre. What you need is not a lot of action, but a lot of patience. You must stick to your principles, and when the opportunity arises, you seize it with force. There are many situations that are far worse than being flooded with cash and doing nothing. I remember the times when I lacked cash — I do not want to go back to that time. — Charlie Munger

Cultivate yourself into a lifelong learner through extensive reading; nurture curiosity, and strive to make yourself a little smarter every day.

The willingness to be prepared is more important than the willingness to win.

Humility — acknowledging your ignorance is the beginning of wisdom.

Most importantly, do not fool yourself, and remember, you are the easiest person to fool.

Distinguish between value and price, process and action, wealth and scale.

Remember that simplicity is better than mastering the profound.

"Heaven has not granted humanity the gift of knowing everything about everything at all times. But for those who strive to find mispriced bets in the world, heaven sometimes grants them such a bet."

Good ideas are particularly rare — when the timing is right for you, bet heavily (allocate capital).

"Compound interest is the eighth wonder of the world" (Einstein), do not interrupt it unless necessary.

Enjoy the results, and enjoy the process, because you live in the process.

"A person's task is not to see the distant blurry things clearly, but to do well the clear things around them." — Charlie's summary

Be fearful when others are greedy; be greedy when others are fearful.

Opportunities do not come often, so when they do, seize them.

Recognize and adapt to the true nature of the world around you; do not expect it to adapt to you.

Honesty is the Best Policy#

This gives Charlie the opportunity to say a line he really likes: "I am right, you are smart, and sooner or later you will understand that I am right."

Discipline and Patience: Ted Williams' 77 Zones of Hitting#

I owe my success today to not chasing mediocre opportunities. — Charlie Munger

Charlie on Honesty: Speech at the 2004 SICO Annual Meeting#

"Ability will get you to the top, but only character will keep you there."

"Scheming is the trick of fools who lack the wisdom to treat others with honesty."

In our view, Benjamin Franklin was right. He did not say that honesty is the best moral quality; he said that honesty is the best strategy.

"Ability will get you to the top, but only character will keep you there."

"Scheming is the trick of fools who lack the wisdom to treat others with honesty."

In our view, Benjamin Franklin was right. He did not say that honesty is the best moral quality; he said that honesty is the best strategy.

The Key to Our Success#

We make money by remembering the simple, not by mastering the profound. We never try to be very smart; instead, we continuously try not to become fools, and over time, we people like us can gain a significant advantage.

Remember Louis Vinsendi's rule: Speak the truth, and you will not have to remember your lies.

We make money by remembering the simple, not by mastering the profound. We never try to be very smart; instead, we continuously try not to become fools, and over time, we people like us can gain a significant advantage.

Remember Louis Vinsendi's rule: Speak the truth, and you will not have to remember your lies.

Investment Advice#

In my opinion, his smartest saying is this: "If something is not worth doing, it is not worth doing well."

You must have a strong interest in understanding the reasons behind what is happening. If you can maintain this mindset over the long term, your ability to focus on reality will gradually improve. If you do not have this mindset, then even if you have a high IQ, you are destined to fail.

We tend to invest a lot of money in places where we do not have to make further decisions.

If you truly have competence, you will be very clear about where the boundaries of your circle of competence are. Competence without boundaries cannot be called competence. If you ask yourself whether you have exceeded the boundaries of your circle of competence, that question itself is the answer.

If you pick up the best economics textbook, which is written by Mankiw, he says that the basis for people's decisions is opportunity cost — that is, what is truly important is whether there are other options. Our decision-making is also like this. Others do not think so — some even propose the concept of equity cost.

In my opinion, his smartest saying is this: "If something is not worth doing, it is not worth doing well."

You must have a strong interest in understanding the reasons behind what is happening. If you can maintain this mindset over the long term, your ability to focus on reality will gradually improve. If you do not have this mindset, then even if you have a high IQ, you are destined to fail.

We tend to invest a lot of money in places where we do not have to make further decisions.

If you truly have competence, you will be very clear about where the boundaries of your circle of competence are. Competence without boundaries cannot be called competence. If you ask yourself whether you have exceeded the boundaries of your circle of competence, that question itself is the answer.

If you pick up the best economics textbook, which is written by Mankiw, he says that the basis for people's decisions is opportunity cost — that is, what is truly important is whether there are other options. Our decision-making is also like this. Others do not think so — some even propose the concept of equity cost.

How to Become Happy, Wealthy, and Other Advice#

Avoid evil people, especially those seductive opposite sexes.

If you are unpopular among those around you because of your individuality... then let them be.

Jealousy is truly a foolish sin, as it is the only sin from which you cannot derive any pleasure. It only causes you pain and does not bring you any joy. Why be jealous?

I always imagine heaven as some kind of library. — Jorge Luis Borges

Avoid evil people, especially those seductive opposite sexes.

If you are unpopular among those around you because of your individuality... then let them be.

Jealousy is truly a foolish sin, as it is the only sin from which you cannot derive any pleasure. It only causes you pain and does not bring you any joy. Why be jealous?

I always imagine heaven as some kind of library. — Jorge Luis Borges

Lecture One: Speech at Harvard School Graduation#

If you desire to live a painful life, I cannot find a more effective remedy to recommend to you. Johnson said well, he said that life is already hard enough to swallow, why stuff it into the bitter peel of resentment?

Be fickle, do not sincerely do what you are doing. Just develop this habit, and you will be able to easily offset the effects produced by all your virtues, no matter how great those effects may be.

I now recall the words of the historian Solon: "No one's life can be called happy until it has ended."

"Life is like hang gliding; if you don't succeed at the start, you're done."

"If you do not listen to the goddess of reason, she will make you suffer."

"Experience is a good school, but fools will not learn from others' experiences, and very few can learn from others; because this statement is absolutely true: we can offer advice, but we cannot offer behavior."

Please ignore the lesson contained in the epitaph that Epictetus personally wrote: "Here lies Epictetus, a slave, physically disabled, extremely poor, favored by the gods."

They have become the kind of people Philip Wylie commented on: "They are complacent, satisfied with their existing knowledge, and will never seek to understand new things."

Einstein said that his successful theories came from "curiosity, focus, perseverance, and self-reflection." What he meant by self-reflection is constantly experimenting and overturning the ideas he loves.

Although quantum mechanics is unlearnable for most people, reliability is something almost everyone can master well.

If you can remain calm when those around you go crazy and blame you, if you can believe in yourself when everyone doubts you but let them doubt, if you can wait without becoming weary, or suffer deception without retaliating with lies, or face hatred without retaliating with hatred, if you can remain unflustered and not be overly flattering... if you can converse with common people and be polite, or walk with kings — without being servile, if neither enemies nor friends can harm you; if you care for everyone but do not depend on anyone; if you can take sixty seconds of running when you feel like venting your anger, the earth and all that is in it will belong to you, and what is more, you will be a real man, my child! — Excerpt from the poem "If" that Charlie has always admired.

If you desire to live a painful life, I cannot find a more effective remedy to recommend to you. Johnson said well, he said that life is already hard enough to swallow, why stuff it into the bitter peel of resentment?

Be fickle, do not sincerely do what you are doing. Just develop this habit, and you will be able to easily offset the effects produced by all your virtues, no matter how great those effects may be.

I now recall the words of the historian Solon: "No one's life can be called happy until it has ended."

"Life is like hang gliding; if you don't succeed at the start, you're done."

"If you do not listen to the goddess of reason, she will make you suffer."

"Experience is a good school, but fools will not learn from others' experiences, and very few can learn from others; because this statement is absolutely true: we can offer advice, but we cannot offer behavior."

Please ignore the lesson contained in the epitaph that Epictetus personally wrote: "Here lies Epictetus, a slave, physically disabled, extremely poor, favored by the gods."

They have become the kind of people Philip Wylie commented on: "They are complacent, satisfied with their existing knowledge, and will never seek to understand new things."

Einstein said that his successful theories came from "curiosity, focus, perseverance, and self-reflection." What he meant by self-reflection is constantly experimenting and overturning the ideas he loves.

Although quantum mechanics is unlearnable for most people, reliability is something almost everyone can master well.

If you can remain calm when those around you go crazy and blame you, if you can believe in yourself when everyone doubts you but let them doubt, if you can wait without becoming weary, or suffer deception without retaliating with lies, or face hatred without retaliating with hatred, if you can remain unflustered and not be overly flattering... if you can converse with common people and be polite, or walk with kings — without being servile, if neither enemies nor friends can harm you; if you care for everyone but do not depend on anyone; if you can take sixty seconds of running when you feel like venting your anger, the earth and all that is in it will belong to you, and what is more, you will be a real man, my child! — Excerpt from the poem "If" that Charlie has always admired.

Lecture Two: On Basic, Universal Wisdom and Its Relationship to Investment Management and Business#

The path of learning is not smooth, and there are no shortcuts on the road to mastery. — Anthony Trollope

A person using a tool should understand its limitations; similarly, a person using cognitive tools should understand their limitations. By the way, this knowledge can be used to manipulate and motivate others.

Pascal said: "The human mind is both the glory and the shame of the universe."

All the people we encounter are a combination of good and evil. — Dr. Jekyll on Human Nature

First, rationally consider which factors truly control the interests involved. Second, what subconscious factors automatically form when the brain is in a subconscious state — these subconscious factors are generally useful but often fail in specific situations? One method is rational analysis — the method you use when playing bridge, identifying the true interests, finding the right opportunities, etc. Another method is to assess which factors lead to subconscious conclusions — most of the time, these are incorrect conclusions.

"Before becoming a leader, success is about developing yourself. When you become a leader, success is about helping others develop." "Evaluate based on goals. Provide returns based on goals."

"The lesson I have learned over the years is that, at many times, I have been too cautious. Every measure I took should have been implemented earlier."

"Don't deceive yourself. Facts are facts."

"I was both naive and ignorant before, but that was a fortunate thing because it was during that period of ignorance that I learned a lesson that I have kept in mind for many years: you can learn from everyone. My knowledge comes not only from every retail publication I can find but more likely from studying the practices of my competitors across the street."

The second basic method is the one used by Benjamin Graham — Warren and I greatly appreciate this method. As one of its elements, Graham used the concept of private ownership value, meaning that one should consider how much the entire business could sell for (to private owners). In many cases, this can be calculated. Then, you multiply the stock price by the number of shares; if the result is one-third or less of the total selling price, he would say that buying such a stock is a great bargain. Even if it is a lousy company, and the manager is a drunken fool, if the true value per share is much higher than the price you pay, it means you can gain various benefits. If you gain so much additional value, in Graham's words, you have a significant margin of safety.

The species that survive are not the strongest or the smartest, but the ones most adaptable to change. — Charles Darwin

The path of learning is not smooth, and there are no shortcuts on the road to mastery. — Anthony Trollope

A person using a tool should understand its limitations; similarly, a person using cognitive tools should understand their limitations. By the way, this knowledge can be used to manipulate and motivate others.

Pascal said: "The human mind is both the glory and the shame of the universe."

All the people we encounter are a combination of good and evil. — Dr. Jekyll on Human Nature

First, rationally consider which factors truly control the interests involved. Second, what subconscious factors automatically form when the brain is in a subconscious state — these subconscious factors are generally useful but often fail in specific situations? One method is rational analysis — the method you use when playing bridge, identifying the true interests, finding the right opportunities, etc. Another method is to assess which factors lead to subconscious conclusions — most of the time, these are incorrect conclusions.

"Before becoming a leader, success is about developing yourself. When you become a leader, success is about helping others develop." "Evaluate based on goals. Provide returns based on goals."

"The lesson I have learned over the years is that, at many times, I have been too cautious. Every measure I took should have been implemented earlier."

"Don't deceive yourself. Facts are facts."

"I was both naive and ignorant before, but that was a fortunate thing because it was during that period of ignorance that I learned a lesson that I have kept in mind for many years: you can learn from everyone. My knowledge comes not only from every retail publication I can find but more likely from studying the practices of my competitors across the street."

The second basic method is the one used by Benjamin Graham — Warren and I greatly appreciate this method. As one of its elements, Graham used the concept of private ownership value, meaning that one should consider how much the entire business could sell for (to private owners). In many cases, this can be calculated. Then, you multiply the stock price by the number of shares; if the result is one-third or less of the total selling price, he would say that buying such a stock is a great bargain. Even if it is a lousy company, and the manager is a drunken fool, if the true value per share is much higher than the price you pay, it means you can gain various benefits. If you gain so much additional value, in Graham's words, you have a significant margin of safety.

The species that survive are not the strongest or the smartest, but the ones most adaptable to change. — Charles Darwin

Unknown#

Reducing desires rather than increasing risks to satisfy those desires is also a good idea.

Lecture Three: On Basic, Universal Wisdom (Revised)#

"The first step to success in any industry is to develop an interest in that industry."

"I never let schooling interfere with my education."

"I wear the chains I forged in life."

Ideology can lead people to make strange actions and can severely distort people's perceptions. If you were deeply influenced by ideology in your youth and then began to propagate that ideology, you have essentially imprisoned your brain in a very unfortunate pattern. Your general perception will be distorted.

"Honesty is one of the redemptive principles leading to the kingdom of God. Whether male or female, without baptism, one cannot be saved; similarly, people cannot be saved if they are not honest."

In fact, life is such that it allows you to deal with mistakes. A common trait among bankrupt individuals is their inability to properly handle psychological denial. You have invested tremendous energy, heart, and money into something. The more you invest, the more the consistency principle will lead you to think, "Now it must succeed. If I invest a little more, it will succeed."

Life sometimes resembles a poker game; sometimes you may have a hand you really like, but you must learn to let go.

"The deprivation super-reflection syndrome" can also occur: if you do not invest a little more, you will lose everything. This is how people go bankrupt — because they do not know how to stop and reflect, then say, "I can let this go and start over. I will not stubbornly persist — otherwise, I will go bankrupt."

Overall, I do not believe that American psychology professors, if they switched to studying physics, could become professors. This may be why they have not been able to teach psychology well.

"Science cannot solve the ultimate mysteries of nature. This is because, ultimately, we ourselves are part of the mystery we are trying to solve."

"New scientific truths triumph not because those who oppose them change their minds and see the light of truth, but because those opponents eventually die, and a new generation familiar with the new scientific truths finally grows up."

Perhaps I am inherently noble, willing to serve values that transcend my brief life. But perhaps I am just boasting here. Who knows?

"The first step to success in any industry is to develop an interest in that industry."

"I never let schooling interfere with my education."

"I wear the chains I forged in life."

Ideology can lead people to make strange actions and can severely distort people's perceptions. If you were deeply influenced by ideology in your youth and then began to propagate that ideology, you have essentially imprisoned your brain in a very unfortunate pattern. Your general perception will be distorted.

"Honesty is one of the redemptive principles leading to the kingdom of God. Whether male or female, without baptism, one cannot be saved; similarly, people cannot be saved if they are not honest."

In fact, life is such that it allows you to deal with mistakes. A common trait among bankrupt individuals is their inability to properly handle psychological denial. You have invested tremendous energy, heart, and money into something. The more you invest, the more the consistency principle will lead you to think, "Now it must succeed. If I invest a little more, it will succeed."

Life sometimes resembles a poker game; sometimes you may have a hand you really like, but you must learn to let go.

"The deprivation super-reflection syndrome" can also occur: if you do not invest a little more, you will lose everything. This is how people go bankrupt — because they do not know how to stop and reflect, then say, "I can let this go and start over. I will not stubbornly persist — otherwise, I will go bankrupt."

Overall, I do not believe that American psychology professors, if they switched to studying physics, could become professors. This may be why they have not been able to teach psychology well.

"Science cannot solve the ultimate mysteries of nature. This is because, ultimately, we ourselves are part of the mystery we are trying to solve."

"New scientific truths triumph not because those who oppose them change their minds and see the light of truth, but because those opponents eventually die, and a new generation familiar with the new scientific truths finally grows up."

Perhaps I am inherently noble, willing to serve values that transcend my brief life. But perhaps I am just boasting here. Who knows?

Lecture Four: Real Thoughts on Real Thinking?#

In Benjamin Franklin's words: "If you want to accomplish something, do it yourself. If you don't want to, let others do it."

Aristotle said that the best way to avoid jealousy is to be genuine.

"Smoothness is the art of expressing opinions without creating enemies."

"We build too many walls and repair too few bridges."

Even great figures like Einstein have said that his achievements depend on four factors: first, self-criticism, followed by curiosity, focus, and perseverance.

In Benjamin Franklin's words: "If you want to accomplish something, do it yourself. If you don't want to, let others do it."

Aristotle said that the best way to avoid jealousy is to be genuine.

"Smoothness is the art of expressing opinions without creating enemies."

"We build too many walls and repair too few bridges."

Even great figures like Einstein have said that his achievements depend on four factors: first, self-criticism, followed by curiosity, focus, and perseverance.

Lecture Five: Professionals Need More Interdisciplinary Skills#

Bias caused by incentive mechanisms; professionals with this inherent cognitive bias believe that what benefits them is also beneficial to clients and society as a whole; 2. Hammer man tendency, named after the saying: "To a person with only a hammer, every problem looks like a nail."

"Fools have imagination but lack knowledge; pedants have knowledge but lack imagination."

"True courage is not the brutal violence of a vulgar hero, but the steadfast determination of virtue and reason."

"What kills knowledge is not ignorance, but ignorance of ignorance."

All important books should be reread immediately. — Schopenhauer

I am always interested in many things, and I always try to explain these things to myself. I ask many questions. — Jared Diamond

Bias caused by incentive mechanisms; professionals with this inherent cognitive bias believe that what benefits them is also beneficial to clients and society as a whole; 2. Hammer man tendency, named after the saying: "To a person with only a hammer, every problem looks like a nail."

"Fools have imagination but lack knowledge; pedants have knowledge but lack imagination."

"True courage is not the brutal violence of a vulgar hero, but the steadfast determination of virtue and reason."

"What kills knowledge is not ignorance, but ignorance of ignorance."

All important books should be reread immediately. — Schopenhauer

I am always interested in many things, and I always try to explain these things to myself. I ask many questions. — Jared Diamond

Lecture Six: Investment Practices of First-Class Charitable Funds#

The best way to eliminate the side effects of thinking is to learn from the best physicists, who systematically criticize themselves.

"If a person does not care who gets the credit, then their achievements and status are limitless."

The best way to eliminate the side effects of thinking is to learn from the best physicists, who systematically criticize themselves.

"If a person does not care who gets the credit, then their achievements and status are limitless."

Lecture Seven: Speech at the Charitable Roundtable Breakfast Meeting#

Conventional wisdom tells us that conforming failures bring better reputations than unconventional successes. — John Maynard Keynes

If you lack the right tools of thought, you and the people you are trying to help are already deeply poisoned by your easily removable ignorance.

Please take care of your reputation as you would cherish your most precious jewels — because reputation is like fire; once lit, you can easily let it burn, but once extinguished, you must work hard to reignite it. The way to gain a good reputation is to strive to become the person you want to be. — Socrates

Conventional wisdom tells us that conforming failures bring better reputations than unconventional successes. — John Maynard Keynes

If you lack the right tools of thought, you and the people you are trying to help are already deeply poisoned by your easily removable ignorance.

Please take care of your reputation as you would cherish your most precious jewels — because reputation is like fire; once lit, you can easily let it burn, but once extinguished, you must work hard to reignite it. The way to gain a good reputation is to strive to become the person you want to be. — Socrates

Lecture Eight: The Financial Scandals of 2003#

"It is difficult for people to understand things that conflict with their interests."

"We all think that pessimism is a sign of superior intelligence."

"Beauty certainly has no absolute standard. Thus, the pursuit of beauty is so interesting."

"The only function of economic forecasting is to make astrology respectable."

"Those who are lucky always say they are happy because their morals are high."

Pleasure is the greatest motive for sin. — Plato

"It is difficult for people to understand things that conflict with their interests."

"We all think that pessimism is a sign of superior intelligence."

"Beauty certainly has no absolute standard. Thus, the pursuit of beauty is so interesting."

"The only function of economic forecasting is to make astrology respectable."

"Those who are lucky always say they are happy because their morals are high."

Pleasure is the greatest motive for sin. — Plato

Lecture Nine: On Academic Economics: Considering the Advantages and Disadvantages After Interdisciplinary Needs#

Benjamin Franklin once said in "Poor Richard's Almanack": "If you want to persuade others, appeal to their interests, not to their reason."

Herb Stein also said a synonymous phrase that I really like: "If something cannot last forever, it will eventually stop."

Few things are more annoying and intolerable than a good example. — Mark Twain

Life is interesting because of paradoxes. Whenever I encounter a paradox, I think either I am a complete idiot for thinking it is a paradox, or my research has been fruitful and reached the forefront of this field. Just figuring out which category I belong to can add a lot of fun to life.

Benjamin Franklin once said in "Poor Richard's Almanack": "If you want to persuade others, appeal to their interests, not to their reason."

Herb Stein also said a synonymous phrase that I really like: "If something cannot last forever, it will eventually stop."

Few things are more annoying and intolerable than a good example. — Mark Twain

Life is interesting because of paradoxes. Whenever I encounter a paradox, I think either I am a complete idiot for thinking it is a paradox, or my research has been fruitful and reached the forefront of this field. Just figuring out which category I belong to can add a lot of fun to life.

Lecture Ten: Speech at the Gould School of Law Graduation at the University of Southern California#

I am very fortunate to have understood at a young age that the most reliable way to get something you want is to make yourself worthy of it.

Love is like a parasite on his leg, sucking the warmth of his life, sustaining its vile existence; it desperately drains his energy, making him lose interest in everything else.

If a powerful person is wrong and you are right, then you are in danger.

I suggest you do not learn from me; it is better to learn to hide your wisdom.

I usually act on impulse; if someone dislikes my style, so be it; I do not need everyone to like me.

Some Scandinavians who paddle canoes conquered all the rapids in Scandinavia, believing they could also successfully navigate the great whirlpool of North America, resulting in a 100% mortality rate. The great whirlpool is something you should avoid. I think strong ideologies are too, especially when all your companions are devout believers.

I feel I am not qualified to hold an opinion unless I can better refute my opponent's position. I believe I am only qualified to express an opinion when I reach that level.

"You do not need to have hope to persist."

If you want to become wise, severe ideologies are likely to lead to counterproductive outcomes.

"If you want to persuade others, appeal to their interests, not to their reason."

If I have to work 2400 hours a year, I cannot live; that would bring me many problems, and I would not accept such conditions.

If you want to strive to become a person with Planck knowledge in life and avoid becoming a person with driver's knowledge, you will encounter this problem. At that time, many great forces will oppose you.

I believe Epictetus's attitude can guide people to respond correctly. He believes that every misfortune in life, no matter how unfortunate, is an opportunity for exercise. He believes that every misfortune is a good opportunity to learn. People should not sink into self-pity but should use every setback to improve themselves.

You may remember Epictetus's self-penned epitaph: "Here lies Epictetus, a slave, physically disabled, extremely poor, favored by the gods." Well, now Epictetus is remembered like this: "Favored by the gods." To say he was favored is because he became a wise man, a towering figure, and educated others, including those of his time and many centuries thereafter.

Control your desires so they do not retaliate against you.

Do not demand reality according to your wishes; rather, determine your wishes based on reality.

The wise do not mourn what they lack but rejoice in what they have.

If you want to progress, do not care if others think you are foolish.

What happens to you is not important; what matters is how you respond.

Do your best in everything, and do not worry about the outcome.

What troubles people is not things but their views on things.

Wealth is not having many possessions but having few needs.

Others' thoughts are fleeting; they think about dating lovers, seeking fortune, or becoming famous. I always think about trouble; my thoughts are steady, so when trouble comes, I am already prepared.

What you should pursue in life is to cultivate a seamless web of trust as much as possible.

I would like to conclude this speech with the only words that the truth knight in "The Pilgrim's Progress" might say after growing old: "My sword is passed to those who can wield it." (Audience applauds.)

I am very fortunate to have understood at a young age that the most reliable way to get something you want is to make yourself worthy of it.

Love is like a parasite on his leg, sucking the warmth of his life, sustaining its vile existence; it desperately drains his energy, making him lose interest in everything else.

If a powerful person is wrong and you are right, then you are in danger.

I suggest you do not learn from me; it is better to learn to hide your wisdom.

I usually act on impulse; if someone dislikes my style, so be it; I do not need everyone to like me.

Some Scandinavians who paddle canoes conquered all the rapids in Scandinavia, believing they could also successfully navigate the great whirlpool of North America, resulting in a 100% mortality rate. The great whirlpool is something you should avoid. I think strong ideologies are too, especially when all your companions are devout believers.

I feel I am not qualified to hold an opinion unless I can better refute my opponent's position. I believe I am only qualified to express an opinion when I reach that level.

"You do not need to have hope to persist."

If you want to become wise, severe ideologies are likely to lead to counterproductive outcomes.

"If you want to persuade others, appeal to their interests, not to their reason."

If I have to work 2400 hours a year, I cannot live; that would bring me many problems, and I would not accept such conditions.

If you want to strive to become a person with Planck knowledge in life and avoid becoming a person with driver's knowledge, you will encounter this problem. At that time, many great forces will oppose you.

I believe Epictetus's attitude can guide people to respond correctly. He believes that every misfortune in life, no matter how unfortunate, is an opportunity for exercise. He believes that every misfortune is a good opportunity to learn. People should not sink into self-pity but should use every setback to improve themselves.

You may remember Epictetus's self-penned epitaph: "Here lies Epictetus, a slave, physically disabled, extremely poor, favored by the gods." Well, now Epictetus is remembered like this: "Favored by the gods." To say he was favored is because he became a wise man, a towering figure, and educated others, including those of his time and many centuries thereafter.

Control your desires so they do not retaliate against you.

Do not demand reality according to your wishes; rather, determine your wishes based on reality.

The wise do not mourn what they lack but rejoice in what they have.

If you want to progress, do not care if others think you are foolish.

What happens to you is not important; what matters is how you respond.

Do your best in everything, and do not worry about the outcome.

What troubles people is not things but their views on things.

Wealth is not having many possessions but having few needs.

Others' thoughts are fleeting; they think about dating lovers, seeking fortune, or becoming famous. I always think about trouble; my thoughts are steady, so when trouble comes, I am already prepared.

What you should pursue in life is to cultivate a seamless web of trust as much as possible.

I would like to conclude this speech with the only words that the truth knight in "The Pilgrim's Progress" might say after growing old: "My sword is passed to those who can wield it." (Audience applauds.)

Lecture Eleven: The Psychology of Human Misjudgment#

Diogenes said: "What use is a philosopher who never offends anyone?"

Super response tendencies caused by rewards and punishments; 2. Liking/loving tendencies; 3. Disliking/hating tendencies; 4. Avoiding doubt tendencies; 5. Avoiding inconsistency tendencies; 6. Curiosity tendencies; 7. Kantian fairness tendencies; 8. Envy/jealousy tendencies; 9. Reciprocity tendencies; 10. Simple association influence tendencies; 11. Simple, pain-avoiding psychological denial tendencies; 12. Overestimating oneself tendencies; 13. Overly optimistic tendencies; 14. Deprivation super response tendencies; 15. Social recognition tendencies; 16. Comparison error response tendencies; 17. Pressure influence tendencies; 18. Error measurement ease tendencies; 19. Forgetting when not used tendencies; 20. Chemical substance error influence tendencies; 21. Aging — error influence tendencies; 22. Authority — error influence tendencies; 23. Nonsense tendencies; 24. Valuing reasons tendencies; 25. Lollapalooza tendencies — the tendency for multiple psychological tendencies to combine to create extreme outcomes.

Aside from parents, spouses, and children, what do humans inherently like and love? Humans like and love being liked and loved. Many victories and defeats in the realm of romance depend on whether he/she can show extra care and affection; generally speaking, humans will lifelong crave the affection and appreciation of many others who have nothing to do with them. The very practical consequence of the liking/loving tendency is that it is a psychological regulation tool that prompts people to: (1) ignore the flaws of their loved ones and comply with them; (2) favor those who remind them of their loved ones, including people, objects, and actions (this will be discussed in the "simple association influence tendencies"); (3) distort other facts for the sake of love. Liking/loving can trigger infatuation, and vice versa. Infatuation can also provoke and reinforce the liking/loving tendency. Once this "feedback loop" is formed, it often leads to extreme consequences, sometimes prompting people to self-destruct in order to help their beloved.

Politics is the art of properly handling hatred.

The disliking/hating tendency is also a psychological regulation tool that can prompt those deeply entrenched in it to: (1) ignore the merits of their disliked objects; (2) hate those who remind them of their disliked objects, including people, objects, and actions; (3) distort other facts for the sake of hatred.

What drives this world is not greed, but jealousy.

The history of humans and ants teaches us: (1) Nature does not have universal laws that promote the prosperity of species through the behavior of repaying kindness with kindness; (2) If a country abandons the principle of tit for tat in foreign relations, it is uncertain whether that country has a good future; (3) If nations believe that repaying kindness with kindness is the best way to coexist, then human culture will bear a heavy burden, as human genes will not be of much help.

The standard method to defuse extreme hostility is for people to delay their reactions.

The correct countermeasure to avoid doing foolish things because of past successes is: (1) to carefully examine each past success, identifying the random factors within those successes to avoid being misled by them, thus exaggerating the probability of success for new planned actions; (2) to see what new dangers the new actions will encounter that did not appear in past successful experiences.

A husband will be like what a wife is. She married a clown, and the clown's despicable behavior dragged her down.

Opinions vary on how much the association called love can blind people. In "Poor Richard's Almanack," Franklin suggested: "Keep your eyes wide open before marriage, and half shut afterwards." Perhaps this "half shut" method is correct, but I prefer a more difficult approach: "See reality as it is, yet still love."

Bad news should be reported to us immediately. Only good news can wait.

"Never underestimate those who overestimate themselves."

Among all beneficial pride, perhaps the most admirable is the pride that comes from being trustworthy. Moreover, as long as a person is trustworthy, even if the path they choose is rugged, their life will be much better than those who are untrustworthy.

Extreme ideologies are maintained through strong means and great hostility towards non-believers, leading to extreme cognitive dysfunction. This situation is common around the world. I believe this unfortunate outcome is often caused by two psychological tendencies: (1) avoiding inconsistency tendencies; (2) deprivation super response tendencies.

If the girl I love is not around, I will love the girl next to me.

The main countermeasure to avoid the influence of availability — error measurement tendencies is usually to act according to procedures, including using checklists that are almost always very helpful.

The great principle to remember when dealing with this tendency is simple: do not think something is more important just because a fact or idea is easily obtainable.

Thinking and learning joyfully can, to some extent, delay the inevitable decline process.