Charlie Munger at Caltech (2020)
Charlie Munger's Caltech talk on career choices, dealing with change, and technology investing lessons from his early failure with William Miller Instruments.
Charlie Munger at Caltech (2020)
Date: December 2020 Event: Caltech Distinguished Alumnus Conversation Source: YouTube Recording
Overview
Charlie Munger joined Caltech for a wide-ranging conversation covering his career path, lessons from early failures, and his views on technology investing. At 96 years old, Munger reflected on eight decades of experience in investing and law.
Key Lessons
On Career Choice
"It's very important when you choose a career. If you go into a career that's very tough, you're not going to do very well. And if you go into one where you have special advantages and you like the work, you're going to do pretty well."
Munger chose law because it was the natural path given his family background — his father and grandfather were lawyers and judges. However, he acknowledged it wasn't the wisest decision he ever made. The key insight: career success comes from matching your natural advantages with work you enjoy.
The Army as a Turning Point
Munger's path took him from Caltech (studying thermodynamics and meteorology for the Army Air Corps) to Harvard Law School. The discipline and structure of military service shaped his later thinking about capital-allocation and risk management.
Early Failure: William Miller Instruments
Munger's first investment was in a Pasadena company called William Miller Instruments. He almost lost everything:
"We invented something we were so proud of... Somebody invented magnetic tape without telling me, and by the time we got our sl-o-graph ready to go to market, we sold three. Three total in the whole world country."
Lesson: Technology on the cutting edge is dangerous. This early failure kept him away from venture capital in technology for decades.
On Change and Adaptation
"The government has tried to do things that will dampen down the fluctuations and make recoveries from the busts happen faster. And of course, that's caused a fair amount of inflation in a life that's been as long as mine."
Munger observed that technological change has driven much of America's economic growth. But he noted a troubling development: "I don't welcome it at all. I don't think we want the whole world trying to get rich by outsmarting the rest of the world in marketable securities."
The Transformation of Finance
When Munger was young, "there was practically nobody in it and they weren't very smart, and now almost everybody's smart." He views the influx of talent into finance as "a hugely important development" — one he doesn't celebrate.
Famous Quotes
"Technology is a killer as well as an opportunity."
"I don't think we want the whole world trying to get rich by outsmarting the rest of the world in marketable securities."
Related
- charlie-munger — The speaker
- warren-buffett — Who influenced Munger to leave law for investing
- compounding — Munger's approach to long-term wealth
- capital-allocation — Lessons from early career
- contrarian-investing — Avoiding popular areas like tech VC