Customer Reviews

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

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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

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: A True Story About the Ups and Downs From Wall Street to Real Estate Leading to Phenomenal Returns

I am an ardent follower of Charlie Munger and have the utmost respect for his accomplishments. His investment record is nearly without parallel and his broad understanding of subjects beyond investing requires no further elaboration to those that are familiar with him. I bought this book hoping that it would be the Munger equivalent of the excellent compilation by Lawrence Cunningham, "The Essays of Warren Buffett: Lessons for Corporate America."

This book was not even close to what Cunnningham produced and I returned it. The book is a coffee-table style book that is presented like a middle-school textbook, with odd illustrations (in one instance, when the text referred to General Electric, they inserted a giant GE logo on the page). The book has excellent content in the form of original letters and transcripts of talks that Munger has given. But it reads much more like a tribute or toast to his accomplishments instead of a digest of his beliefs. Instead. why not focus on what he has said and done so that we can all learn from his example?

Certainly others have liked this book and, again, I am a huge fan of Munger, but this book disappointed me and I would not recommend buying it without first browsing through it in person.

The majority of the book is mostly a compilation of his Top 10 public speeches, but with many side business anecdotes and references. The highlight however is with respect to his "Mental Models" with some new material. As Munger says, without the Models you're doomed with the "Man with a Hammer" syndrome. Just as you need several tools to both be a competent individual and to provide something back to society, you also need the tools to be a good investor as you are rarely the smartest one in the room.

In addition, the recommended readings (if adhered to) are an education in themselves and are primarily the basis for many of the Mental Models presented, but entail so, so much more. Whether you are interested in investing, or not, one can learn many life lessons from the mental model teachings in Poor Charlie's Almanack.

This book is about Warren Buffett's less famous partner and vice-chairman of Berkshire Hathaway, Charlie Munger. It includes ten of his lectures with sidebars by various authors amplifying the points Charlie is making.

It also gives a great insight into the personality that made Charlie, along with Warren one of the finest investors ever.

As Charlie said at the recent Berkshire shareholder's meeting "considering we've been so successful as a company I'm amazed that no-one copies our example"

Companies may not imitate Berkshire Hathaway but investors can follow the simple rules laid down by Warren & Charlie. "It doesn't take a great IQ to be successful, most of all it takes a good temperament"

Simply an outstanding book which will be treasured in our household.

Philip Durell
Analyst/Advisor The Motley Fool Inside Value newsletter

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.

This book is a one-of-a-kind compilation of the public talks delivered by Charlie Munger over the last 20 years. The coffee-table quality book contains hundreds of pictures and original illustrations. It also features a remarkable overview of Munger's investment philospohy, as well as a biography of his life to date and numerous quotes and testimonials. The net proceeds of the book go to benefit the Munger Research Center at the Huntington Library. [...]

I remember reading a quote long back, to the effect, Mankind has progressed not by a few big moves but using a big bag of small tricks.

This book is Munger's big bag of small tricks.

Most of mathematics and science evolved by adding solid tested ideas one above to the other. (Species evolved this way too.)
This, Munger refers as the
organizing ethos of hard science. Basically, every new theorem should build upon a proven theorem and must not contradict anything proven before.

When you add one idea and another in a precise way, you either get an unexpected new idea (a theorem, not intuitive) or a paradox
that prompts you in another direction.

Munger points out that the quality of your solutions and even your delineation of the problem will depend on
what tools you have to solve it. So when the tools you have are not good enough to characterize a problem, your attempts
are going to be futile.

So to avoid the 'man with a hammer' limitation, Munger advices build a tool chest with all kinds of tools ever used on any problem.
And if possible use a checklist to make sure to try out all tools on a new situation until you find a match.

For instance, the entire investing success of Buffett and Munger can be summarized in a handful of tools - power of compound interest,
tax free compounding, no-brainer decisions, power of 20 year investment in companies that grow earnings 10% a year, power of buying on a discount (safety margin), dividend reinvestment, the need to ignore market quotations and float as investment money.

Each of these ideas compounds to another until the combination becomes powerful to make a billionaire or two over time.

This book should inspire people to patiently collect working ideas and build working solutions beyond investment arena.

Must read.

When an author has great material, the quality of the resulting work is usually hard to diminish. This book is a rare example. Peter Kaufman's editing is so disruptive (repeating text, annoying graphics, irrelevant photos) that I can't believe Munger (who's mantra is "I have nothing to add") ever vetted this compilation. But then Munger did predict such events in number 23 on his list of the Psychology of Human Misjudgements -- "The Twaddle Tendency." If you've already bought the book, go directly to page 139 and just read Munger's talks, trying to block out all of Kaufman's distractions. If you haven't bought the book, save your $60 -- Munger's stuff is such that someone else will have to write a better book.

Charlie Munger is, in some circles, the Rodney Dangerfield of the business world. Without the hair of Trump, without the scandals
of Martha, without the bucks of Warren Buffett, without the bombast of Cramer, and without the energy of Tony Robbins, Mr. Munger imparts true useful wisdom. Munger's book is transformational in the sense that it can improve critical thinking. Best of all it's not just for investing nerds, it has lessons for those who don't know Berkshire from a shirt manufacturer. Buy this book for yourself and for anyone who values the self exploration that makes life exciting.

I gave this as a present to my son, who had requested it. HE told me he had read it and it was what he thought it would be. My son is normally not much of a reader so I know he found this book helpful.