A Conversation with Charlie Munger (2023)

Author: John Collison (interviewer) Published: December 5, 2023 Source: Colossus Podcast

Overview

One of Charlie Munger's final major interviews, recorded at his home in Los Angeles where he lived for 61 years. This conversation with Stripe CEO John Collison covers Munger's multidisciplinary approach, investment philosophy, and life wisdom. The interview was released shortly after Munger's passing.

Key Themes

Multidisciplinary Thinking

"My theory from very beginning was I want to eliminate all the most conventional asininity. And I saw that if I could just do that, I'd have an advantage over most people."

Munger emphasized that he learned big ideas from multiple disciplines and used them constantly until they became fluent:

"Ideas to fluency by constantly using them. And that would give me an advantage in what might we call -- but other people call it common sense."

On Probability and Decision Trees

Munger described how Pascal's probability math transformed his thinking:

"When I was introduced to the math of Pascal and the elementary probability, I saw immediately how important this math was... I'm still using it. I used it routinely all my life quite intensely."

The Map Is Not The Territory

Munger warned about confusing financial statements with actual business quality:

"The trouble with investment is most business is going to perish. It's like evolution. Over a scale of 300 years, practically, everything perishes."

On Selling What You'd Buy

"My idea is so simple: if you make your living selling things to other people that are good for them, that is safer and more profitable averaged out than selling them stuff that's bad for them like gambling, drugs, crazy religions."

"I just decided I wasn't going to do any of that. I was going to sell what kind of stuff that I would buy if I were on the other side."

On Choosing Clients and Counterparties

Munger explained his transition from law to investing:

"People get into a lot of trouble or are skirting along the edge of dangerous regulation because they deserve to be dangerously regulated... I think you ought to be quite selective in the clients you take on."

On Big Brands

"Over the last 100 years, the people who control the big brands reliably made more money more easily with less risk and downside than frankly anybody else."

But he warned about future challenges:

"I think there's more trouble coming to big brands than they've had in the last 100 years."

On Investment Difficulty

"All investment is intrinsically damn difficult. Because obviously good ideas get bid to such high prices that they get dangerous just because there's no investment that is so good you can't ruin it by raising the price higher and higher, because none of them are worth an infinite amount of money."

Famous Quotes

"The best thing a human being can do is to help another human being know more."

"Who wants to be dealing with an unreliable person?"

"It's better if it's simple."

Related Concepts

Source

John Collison, Colossus Podcast, December 5, 2023.