Ask for help

“I’ve never found anyone who’s said no or hung up the phone when I called-I just asked. And when people ask me, I try to be as responsive, to pay that debt of gratitude back. Most people never pick up the phone and call, most people never ask. And that’s what separates, sometimes, the people that do things from the people that just dream about them. You gotta act. And you’ve gotta be willing to fail, you gotta be ready to crash and burn, with people on the phone, with starting a company, with whatever. If you’re afraid of failing, you won’t get very far.” - Steve Jobs

Charlie Munger on The failure of General Motors

General Motors, out of the profits of their good years, they could have bought, every year, for many years, a big company. They could have bought Eli Lilly one year and Merck the next, and United Technologies. General Motors could own the world. Instead, what they declared to their shareholders was a goose egg. They took the common equity to zero. And they would say it was all somebody else’s fault. The climate was bad, the unions got powerful. Those damn Asians and Europeans were too competitive.

The truth of the matter is, their very prosperity made them weak. The dealerships got in the hands of inheritors, and the executives on the sales field go around and drink martinis with inheritors, and didn’t pay enough attention to defects in their vehicles. And one thing led to another, and when they were all done the shareholders’ equity went to zero.

And that was in a company that at its peak was one of the most admirable companies in the world. Take the stuff that Boss Kettering (Charles Kettering – head of research at General Motors from 1920 to 1947) had invented in the early days. Kettering was one of the most useful citizens that ever lived in America.

A self starter on a car is a wonderful thing. Under the old system, you frequently broke your arm. You would give it a crank and it would answer back by spinning backwards and breaking your arm. I would much rather push a button than have my arm broken. Nor do I have the opportunity to go and crank in the sleet and snow.

Charlie Munger on Making Bad Decisions

You know what Rudyard Kipling said? Treat those two imposters just the same success and failure. Of course, there’s going to be some failure in making the correct decisions. Nobody bats a thousand. I think it’s important to review your past stupidities so you are less likely to repeat them, but I’m not gnashing my teeth over it or suffering or enduring it. I regard it as perfectly normal to fail and make bad decisions. I think the tragedy in life is to be so timid that you don’t play hard enough so you have some reverses.

Charlie Munger on thinking everyone will be successful with investments

I think the idea that everybody is going to have wonderful results from investing is inherently crazy. Nobody thinks everybody is going to have wonderful results from playing poker.

In the end, the wealth of the country is based on the productivity of the country, which only advances so fast. Of course, if you pay more and more people for not working, it’s hard to see how that grows the productivity of the country.

Charlie Munger on Incentives of managers in tough businesses

I should tell you people a story, because you are groupies for stories. I talked recently to a man who shall go nameless. But his company was one of the great growth stocks of America.

And they had armies of PhD’s in there who had mastered very difficult disciplines. And they had patents, and technology, and know how, what have you and hard to replace plants. What they make is difficult to make in a lot of different categories.

And the profits in the business are very mediocre, to put it mildly. And it isn’t that it has been that badly run. It’s just that everybody’s learned how to make these difficult things, and there are too many of them trying to make them. It just gets terrible. And what happens then is, you’re now the CEO of the place and you see it’s getting tough. You view yourself as a guy that knows how to fix things. You never have a category in your mind of, “It’s too tough to fix,” which is a really stupid idea. You can recognize all kinds of things that are too tough to fix.

But if you don’t, then you are a sucker for some narrative to say, maybe there’s some company in your industry that makes something really complicated that other people can’t match. And you say, “Well, I’ll buy that. That solves my problem.” But your friendly investment banker and your friendly management consultant want you to buy it at 30 times’ earnings and 12 times’ book. Of course, at that price, it won’t solve your problems. And you do it anyway. After all, you’ve got consultants, and it gives you hope.

Quote on Budgeting

"Annual income twenty pounds, annual expenditure nineteen pounds nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery" - Charles Dickens

Charlie Munger on Resentment

“Resentment has always worked for me exactly as it worked for Carson. I cannot recommend it highly enough to you if you desire misery. Johnson spoke well when he said that life is hard enough to swallow without squeezing in the bitter rind of resentment.

For those of you who want misery, I also recommend refraining from practice of the Disraeli compromise, designed for people who find it impossible to quit resentment cold turkey. Disraeli, as he rose to become one of the greatest Prime Ministers, learned to give up vengeance as a motivation for action, but he did retain some outlet for resentment by putting the names of people who wronged him on pieces of paper in a drawer. Then, from time to time, he reviewed these names and took pleasure in noting the way the world had taken his enemies down without his assistance.” - Charlie Munger

Source: http://www.thecrosshairstrader.com/2014/08/charles-t-munger-and-the-prescription-for-a-life-of-misery/