Book Review #39
After reading "Poor Charlie's Almanack", I wondered what is an 'Almanack' or 'Almanac'. The etymology is obscure and it typically means a regularly published listing of current information about one or multiple subjects. The only other Almanack I read (Naval Ravikant's) was based on his tweetstorms whereas Charlie Munger's Almanack is basically wisdom from 11 of his speeches. While not a brisk read, the book is undoubtedly packed with wisdom. The book is like a dense proteinaceous meal that has to be chewed and digested slowly. And if you cannot read it yourself here are his key pearls of wisdom
— There is no better teacher than history in determining the future. There are answers worth billions of dollars in a $30 history book. Charlie was a biography nut and says that if you make friends among the “eminent dead” who had the right ideas you will be better educated
— Munger believes a successful investment career boils down to only a handful of decisions. If he likes a business, he takes a large bet and holds the position for a long period
— When it comes to investments, instead of making superficial stand-alone assessment's of a company’s financial information, he analyses both the internal workings as well as the larger, integrated ecosystem in which it operates. He calls the tools he uses to conduct this review his multiple mental models
— Understand the power of compounding and the elementary math of permutations and combinations. If you don’t then you go through a long life like a one legged man in an ass kicking contest
— It is not enough to think problems through forward. You must also think in reverse. “Invert, always invert”. For instance, if you want to help India, the question you should consider asking is not “How can I help India?” Instead, you should ask, “How can I hurt India?”
— You must think in a multidisciplinary manner. You must routinely use all the easy-to-learn concepts from the freshman course in every basic subject
— Life can be brutally hard. The three things to cope life's challenges: Have low expectations. Have a sense of humor. Surround yourself with the love of friends and family
— Three things to look for in a career: Don’t sell anything you won’t buy yourself. Don’t work for anyone you don’t respect and admire. Work only with people you enjoy
— Intense political animosity should be avoided because it causes much mental malfunction, even in brilliant brains
— The psychology of misjudgment is a terribly important thing to learn with about 25 little principles that interact. Terribly smart people make bonkers mistakes by failing to pay heed to it. In fact, you never get totally over making silly mistakes
— Lollapalooza is Charlie's favorite word. Preparation, Discipline, Patience, Decisiveness when they come together form the dynamic critical mass for a cascading of positive effects (the lollapalooza)
Enjoy this intense book if you can.
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