Poor Charlie’s Almanack: The Essential Wit and Wisdom of Charles T. Munger

Recognize reality even when you don’t like it—especially when you don’t like it.

reward. For instance, some people use money to buy status, and others use status to get money, while still others sort of do both things at the same time.

Above all, never fool yourself, and remember that you are the easiest person to fool.

You must stop slop early. It’s very hard to stop slop and moral failure if you let it run for a while.

Another generalized consequence of incentive-caused bias is that man tends to game all human systems, often displaying great ingenuity in wrongly serving himself at the expense of others. Anti-gaming features, therefore, constitute a huge and necessary part of almost all system design.

I am a biography nut myself. And I think when you’re trying to teach the great concepts that work, it helps to tie them into the lives and personalities of the people who developed them. I think you learn economics better if you make Adam Smith your friend.

Granny’s rule, to be specific, is the requirement that children eat their carrots before they get dessert. The business version requires that executives force themselves daily to first do their unpleasant and necessary tasks before rewarding themselves by proceeding to their pleasant tasks.

Be fearful when others are greedy and greedy when others are fearful.

Anytime somebody offers you a tax shelter from here on in life, my advice would be don’t buy it. In fact, anytime anybody offers you anything with a big commission and a 200 page prospectus, don’t buy it.