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73 of 74 people found the following review helpful:
5.0 out of 5 stars
Worth Reading then Studying! , June 21, 2006
Poor Charlie's Almanack; The Wit and Wisdom of Charles T. Munger
This book gives us the opportunity to learn how one of the greatest financial minds of our day views the world. Amazingly Charlie shares not only his opinions but his thought process and belief system. The book walks you through how Charlie arrives at the decisions that have made him a billionaire. I continually study both Charlie Munger and Warren Buffett , including reading the Berkshire Hathaway annual letter to shareholders which is packed with so much timely insight I'm surprised they don't charge for it.
Some of my favorite thoughts and quotes, which are elaborated on in the book are:
Pg 6 - "Read all the time"
Pg 45 - The Lollapalooza Effect - Charlie coined this phrase as a way of describing an idea, concept or business strategy that literally grows exponentially due to favorable coinciding events.
Pg. 40 -"Be prepared, act promptly, in scale, on a few major opportunities."
Pg 48- Jessy Livermore, "Big money is made in the waiting"
Charlie then goes on to explain that he would sit on 10-20 million at a time in T-Bills just waiting.
Pg 49 - "It takes character to sit there with all that cash and do nothing. I didn't get to where I am by going after mediocre opportunities"
- "It's like looking for a horse that pays 50/50 and has a 3-to-1 chance of winning."
Pg 60 - "The man who doesn't read good books has no advantage over the man who can't" - Mark Twain
On Coumpound Interest:
"Compound interest is the eighth wonder of the world" - Einstein
"Never interrupt it unnecessarily" - Munger
"...'tis the stone that will turn all your lead into gold...Remember that money is of a prolific generating nature. Money can beget money, and its offspring can beget more" - Benjamine Franklin
"If you took our top fifteen decisions out, we'd have a pretty average record. It wasn't hyperactivity, but a hell of a lot of patience. You stuck to your principles and when opportunities came along you pounced on them with vigor." - Munger
On page 61 - 64 there is an investment checklist that is a must read!
"There are worse situations than drowning in cash and sitting, sitting, sitting. I remember when I wasn't awash in cash and I don't want to go back. - Munger
"The wisdom of the wise, and the experience of ages, may be preserved by quotations" - Isaac Disraeli
"It is a good thing for an uneducated man to read a good book of quotations" - Sir Winston Churchill
Pg. 88 - "You need to have a passionate interest in why thing are happening. That cast of mind, kept over long periods, gradually improves your ability to focus on reality. If you don't have that cast of mind your destined for failure even if you have a high I.Q." - Munger
"Our game is to recognize a big idea when it comes along, when it doesn't come along very often. Opportunity comes to the prepared mind." - Munger
A good portion of the book is focused on the importance of multiple mental models and the lack of them in academia.
Another hot topic that shows up more than once is the importance of reading.
"In my whole life, I have known no wise people who didn't read all the time-none, zero. You'd be amazed at how much Warren reads-and at how much I read. My children laugh at me, they think I'm a book with a couple of legs sticking out" Munger
On page 136 the book moves into 10 talks at schools, clubs and foundations that are packed with so much insight and tips on living a happy, healthy and prosperous life that I can't even go into it without adding another 10 pages to this review.
There are close to 50 books mentioned and referenced that I will list and provide links (and some comments) to on my Blog- The Real Estate Investors Blog at Bloglines
This book should be read and studied and kept as a reference tool. It may very well take several years for all the powerful concepts to be fully understood and another few years to work your way through Charlie's reading list, but trust me it will be a worth wile adventure and you will be a changed person shortly after commencing.
By Kevin Kingston, author of A 20,000% Gain in Real Estate
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18 of 19 people found the following review helpful:
5.0 out of 5 stars
One-stop shop for worldly wisdom, February 17, 2007
This book took me a looong time to read, but that's because its nearly 500 pages are so saturated with information and original ideas, you will have plenty to learn and will want to fully explore and take advantage of all Charlie has to offer. You MUST be an active reader to derive any benefit from the framework he has laid out. I don't think a quick skim will do it any justice, or even be worth your time.
The whole purpose of this book is to provide you with a strong mental foundation for success in life... I call it the "inner game." Only then are you truly ready to take on the world in business or make astute investment decisions. For specific investment advice, look no further than Buffett. What you get from Munger is both harder to obtain, and more important to master. Application of investment technique should be the easy part. Key teachings I found important were:
the importance of using the multi-disciplinary approach and interrelated mental models formed from the big (often elementary but rarely used), important ideas of various disciplines
realizing your mental circle of competence, and specializing
the lollapalooza effect
avoiding the man-with-the-hammer problem, and many other psychological tendencies he discusses
his emphasis on ethical behavior (where else do you find this?)
comparison of the stock market to the pari-mutuel betting system
the idea of betting big when the odds are in your favor (Buffett's idea as well)
What I like most is that he has a no-nonsense attitude, and this quality of genuineness makes him more likeable, and easier to learn from. He has a dominant personality and seems more opinionated and less mellow than Buffett, so yes, sometimes he may come across as arrogant, but I'm sure it's hard to downplay such a great life. But anyway, he is supposed to be the teacher, so you must put your own ego aside.
You also get a nice biography at the beginning, giving you some background information about him. Of course Charlie, a self-proclaimed "biography nut," would agree that learning about the lives of other successful people is very important step to success. Since he has led a very honorable life, it would be a great thing if people try to walk in his footsteps.
My only complaint is that somebody decided to put huge boldface italicized duplicate excerpts in the middle of most pages, absolutely killing the flow of the text and slowing me down considerably. I would have tried to simply ignore them, but some of the quotes were not duplicates from the text so I read every single one. I didn't mind the extra information offered in the margins, and in fact found most of it both helpful and interesting. The caricatures were amusing. Remember Charlie is supposed to be a down-to-earth guy, so they wanted to give the book this kind of feel. Also, there was a lot of redundancy of ideas, due to the fact that ten separate speeches were compiled and the topics often overlapped, but I know the value of repetition, and if it has helped drive the key ideas home, it has served its purpose well.
Overall, I'd recommend it to anyone. It stands alone as a masterpiece. For serious investors, I think you will possess the greatest investment capabilities if this book is supplemented with readings from Buffett and Graham. The results of this powerful combination, used effectively, is certainly what Munger would call a lollapalooza effect.
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13 of 14 people found the following review helpful:
5.0 out of 5 stars
Great Book--Worldly Wisdom, January 24, 2007
This is an absolutely fabulous book. I love it. I am an avid follower of Charlie Munger, going to the annual meetings etc. So I thought that this might only be a rehash of existing speeches and talks, which admittedly form the bulk of the text. But it is much more--Munger has revised and added to some of his talks. The editor, Peter Kaufman, has added other materials. Munger's son's comments about dinner table conversations with his children (and grandchildren) are worth the price of the book.
Simply, the book imparts the wisdom of Charlie Munger, from the dinner table to the boardroom.
Now to the bad: as marvelously as the book portrays Munger's wisdom, graphically it is one of the silliest books I have ever seen. The illustrations and pictures range from trite to dreadful. They are poorly chosen, poorly reproduced, sophomoric at best: a picture from Star Trek to illustrate second order consequences, inane caricatures of Munger and Buffett, etc. Visually, it is ghastly.
Nevertheless, this is still a 5 star book. So, here is a new Franklinesque proverb: Don't judge a book by its illustrations.
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