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SMT Perspectives and Prospects: A Dose of Wisdom

For decades, tens of thousands of people from all walks of life have attended the Berkshire Hathaway Annual Shareholders gathering in Omaha, Nebraska, relishing the opportunity to learn from Warren Buffett and Charlie Munger, who field questions for five hours about life, business, and investing. Reportedly, more than 40,000 people from all over the world attended the 2024 meeting, and millions more watched the livestream of the event.

We have heard and learned from their wisdom in their thoughts and practices on everything from professional careers to personal lives, from investments to world affairs. Listening to them always makes me feel intellectually enhanced and reassured.

First, the numbers paint an undeniable picture; the sustainable, long-lasting investing results are undisputable. The tangible performance record under the leadership and management of these two wisdom-boundless men is vividly demonstrable. For every $1,000 investment in the S&P 500 in early 1965, when Mr. Buffett took over at Berkshire, it would generate over $300,000 today. However, if invested in Berkshire instead, it would generate more than $42.5 million. It is a matter of record.

Berkshire's cash pile, which rose to a phenomenal record of $189 billion, also reflects their plausible prudence, sound judgment, and expansive vision. Company followers have been looking for clues about what Warren Buffett might do with the cash hoard, from acquiring a new business to buying stocks to stepping up share repurchases.

When asked about it, he said that “he and his deputies don’t know how to use the cash effectively, and therefore we don’t use it; we only swing at pitches we like.”

Their knowledge and wisdom certainly do not stop at investing.

I recall one of Charlie Munger’s teachings: “I believe in the discipline of mastering the best that other people have ever figured out. I do not believe in just sitting down and trying to dream it all up yourself. Nobody is that smart.” Indeed, the “smart” way to efficiently and effectively manage life and work is the ability to learn from what has been figured out. His words have been embedded in my mind; I constantly remind myself not to reinvent the wheel. Over the years, we have all been nourished by many of his wise words and pieces of advice.

This year, the famed Berkshire Hathaway annual meeting on May 4, 2024, was not expected to be the same. Warren Buffett’s longtime friend and partner, Charlie Munger passed away on Nov. 28, 2023, at the age of 99.9, a few weeks short of his 100th birthday. Without Charlie Munger, it just didn’t feel the same. He held a special place in the hearts of Berkshire fans. Attendees loved that he was not afraid to speak his mind and often made the audience laugh. His biting humor and acerbic one-liners are both inspiring and entertaining.

This year’s event started with a half-hour movie highlighting Charlie Munger's life, followed by a standing ovation. To Charlie, the audience’s respect and admiration are celestial. The short movie touched the minds and hearts of many; tears welled up in my eyes.

In Buffet’s sought-after Annual Letter, he renders a tribute to Charlie:

“In reality, Charlie was the ‘architect’ of the present Berkshire, and I acted as the ‘general contractor’ to carry out the day-by-day construction of his vision. Charlie never sought to take credit for his role as creator but instead let me take the bows and receive the accolades. In a way his relationship with me was part older brother, part loving father. Even when he knew he was right, he gave me the reins, and when I blundered he never—never—reminded me of my mistake. In the physical world, great buildings are linked to their architect, while those who had poured the concrete or installed the windows are soon forgotten. Berkshire has become a great company. Though I have long overseen the construction crew; Charlie should forever be credited with being the architect.”

How can we get ahead in this digital world inundated with a gargantuan amount of information augmented by the evolving and increasingly powerful tools of artificial intelligence that are available to all? How can we stay ahead of the curve? Knowledge and wisdom are the fuel to propel us ahead; learning from the wise is the speedier path to acquire the fuel.

The world has lost a man of extraordinary wit and wisdom. However, Charlie Munger’s teachings will be passed on to future generations who can benefit from his life.

I have been inspired by Charlie Munger over the years. In appreciation of his inspiration, teaching, and influence and in celebration of his life of wit and wisdom, I have selected the following brilliant, memorable quotes about success basics, reading and learning, finance, and life. I hope you will savor, reflect, and benefit from them.

Success Basics

• "Spend each day trying to be a little wiser than you were when you woke up. Day by day, and at the end of the day, if you live long enough, you will get out of life what you deserve."
• "I did not succeed in life by intelligence. I succeeded because I have a long attention span."
• "Acknowledging what you don't know is the dawning of wisdom."
• "Knowing what you don't know is more useful than being brilliant."
• "Forgetting your mistakes is a terrible error if you are trying to improve your cognition."
• "It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent."
• “Recognize reality even when you do not like it. Especially when you don't like it."
• "You must force yourself to consider opposing arguments. Especially when they challenge your best loved ideas."
• "I never allow myself to have an opinion on anything that I don't know the other side's argument better than they do."
• “Patience is not just a virtue; it’s a strategy. Success often requires waiting for the right moment to act.”
• “Success comes from making rational decisions based on facts, not emotions. Remove the emotional cloud to see the clear path forward.”

Reading, Thinking, and Learning

• "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, at how much I read. My children laugh at me. They think I am a book with a couple of legs sticking out.”
• "If it is wisdom you're after, you're going to spend a lot of time on your ass reading."
• "The game of life is the game of everlasting learning. At least it is if you want to win."
• "Develop into a lifelong self-learner through voracious reading; cultivate curiosity and strive to become a little wiser every day."
• "It's been my experience in life if you just keep thinking and reading, you don't have to work."
• “We both (Warren Buffett) insist on a lot of time being available almost every day to just sit and think. That is very uncommon in American business. We read and think.”
• “It’s extraordinary how resistant some people are to learning anything.”
• “I think a life properly lived is just learn, learn, learn all the time.”

Life

• "Assume life will be really tough, and then ask if you can handle it. If the answer is yes, you've won."
• "We have a passion for keeping things simple."
• "Whenever you think something or some person is ruining your life, it's you. A victimization mentality is so debilitating."
• “Invert, always invert: Turn a situation or problem upside down. Look at it backward.”

Finance

• "Great investing requires a lot of delayed gratification."
• "Once you get into debt, it's hell to get out. Do not let credit card debt carry over. You can't get ahead paying 18%."
• "You don't have to have perfect wisdom to get very rich. Just a bit better than average over a long period of time."
• “Live within your income and save so that you can invest.”

Work and Career

• "The way to win is to work, work, work, work and hope to have a few insights. And you're probably not going to be smart enough to find thousands in a lifetime. And when you get a few, you really load up. It's just that simple."
• "Mimicking the herd invites regression to the mean."
• "Three rules for a career: 1) Don’t sell anything you wouldn’t buy yourself; 2) Don’t work for anyone you don’t respect and admire; and 3) Work only with people you enjoy."
• "Opportunity comes to the prepared mind."

This column. originally appeared in the July 2024 issue of SMT007 Magazine.