#79 Charlie Munger (The Complete Investor)

Podcast: Founders
Source: whisper-base
Language: en
Duration: 4379s
URL: https://afp-922710-injected.calisto.simplecastaudio.com/57933a1d-c5a9-4040-9aca-e766ae2ec0eb/episodes/496d43e5-2660-4612-b8e8-e178bee55550/audio/128/default.mp3?aid=rss_feed&awCollectionId=57933a1d-c5a9-4040-9aca-e766ae2ec0eb&awEpisodeId=496d43e5-2660-4612-b8e8-e178bee55550&feed=3hnxp7yk
Fetched: 2026-03-03 09:29:22

What is most interesting about Munger is not his success as an investor, but the way he thinks and keeps his emotions under control. Munger's ability to cut to the heart of an issue with a few well-chosen words is legendary, as is his desire to think independently. A fundamentally important truth is that people rarely make decisions independently. This means that people who can think independently, gain control of their emotions and avoid psychological errors, have an advantage. Warren Buffett once illustrated Munger's desire to do his own thinking with this story. In 1985, a major investment banking house undertook to sell Scott Fetzer. Real quick, Scott Fetzer is the name of a company. It's best well-known for selling the curvy vacuum and the world-booking cyclepedia, but it also owns about a dozen or so other businesses. I had never heard of it before, so I had to look it up. So it says a major investment banking house undertook to sell Scott Fetzer, offering it widely, but with no success. Upon reading of this strike-out, I wrote Ralph Shea, then and now Scott Fetzer's CEO, expressing an interest in buying the business. I had never met Ralph, but within a week we had a deal. Unfortunately, Scott Fetzer's letter of engagement with the banking firm provided it with a $2.5 million fee upon sale, even if it had nothing to do with finding the buyer. I guess the lead banker felt he should do something for his payment, so he graciously offered us a copy of the book on Scott Fetzer that the firm had prepared. With his customary tack, Charlie responded, I'll give you $2.5 million not to read it. So that is from the introduction of the book that I read this week, and the one I'm going to talk to you about today, which is Charlie Munger, the complete investor by Tren Griffin, and what I was just reading from was actually the direct quote from Warren Buffett from his chairman's letter all the way back in 1999. So last week we did an introduction to Charlie Munger with the book, The Wonderful Book, The Tow of Charlie Munger, which I'd recommend everybody go out and buy. It's a fantastically easy to read book and a good introduction into the beautiful mind of Charlie Munger. It contains like 130 or so individual essays where the author would take like a quote or a statement by Charlie and then use that to expound his own thoughts. And like I said, it's a really easy read and a really good introduction to getting to know Charlie Munger, which I think everybody obviously should get to know. So in that book, in the last week's podcast, I covered a little bit about like Charlie's early life and how he got into investing everything. So I'm not going to cover that this week, definitely go back and read that. What I'm going to do is just jump right into the highlights and notes that I took while I was reading the book and the things that really stuck out to me. This book is formatted in a similar, but at the same time different way. There's a lot of quotes from Charlie and Warren in this book, but Trent breaks it down into like more regular chapters. So it reads more like a book than then last week's book where I consider that more like a reference book where you can just pick it up, read one or two or three essays, put it down and so on and so forth. You can read Trent's book straight through and it kind of follows in like a you can understand why Trent organized the way he did. And if you're not familiar with Trent Griffin, I'd recommend, first of all, he's a good follower on Twitter, but I would also recommend checking out his blog, which I've learned a lot from 25 IQ.com. Okay, so let's just jump right into the book and I love how I talk about this all the time on the podcast. So this is Charlie just telling us that we should read biographies, but I love the point that Trent's making here, which is his interpretation of how Charlie monger thinks, because I say this all the time, like listen, we're here to learn from these people. We're not here to analyze them because you know, all humans are imperfect. So Trent's picks that point up right here. He says the point is not to treat anyone like a like a hero, but rather to consider whether monger, like his idol Benjamin Franklin, may have qualities, attributes, systems or approaches to life that we might want to emulate, even in part. This same process explains why monger has read hundreds of biographies learning from the success and failures of others is the fastest way to get smarter and wiser without a lot of pain. And undoubtedly, a lot of other smart people, current smart people and people in the past have picked up on this idea. I always say like the Genesis, the little kernel of idea that saved my mind for a year or two before I started this podcast and kind of influenced me to start it was when I was listening to Elon Musk on another podcast and he was asked, you know, you started a business really young. Did you, how did you even think to learn about these things? Like did you read a bunch of business books? He's like, no, I didn't read business books. I read biographies and he thought they were really helpful. I talked last week in the first like five or six minutes of last week's podcast, how every single one of the entrepreneurs that I've studied for this podcast are nearly every single one. They did the exact same thing, whether Jeff Bezos sitting Sam Walton or the founder of Costco, which he, Jeff talked about like the breakfast with them or something like that. The meeting had with his name is Jim Senegal, I think, with life changing. So this is definitely a good idea for us to use. And what he's saying here, like I love what he says is like, listen, we just want to consider whether they have qualities, attribute systems or approaches to life that we want that we might want to emulate even in part. Okay, so let's skip ahead a little bit. And I love this idea, which I think applies to a lot in life, which is simple, but not easy. It says, much of what is interesting about Munger is explained by this simple sentence, I observe what works and what doesn't and why. That's a direct quote from him. Life happens to Munger as it does to everyone, but unlike many people, he thinks deeply about why things happen and works hard to learn from that experience. So again, thinking, just sitting down and thinking and analyzing, it's really simple, but for some reason for our species, this is actually not easy for us to do. And if you're able to do that, you have an advantage over a long period of time. And I think I'll touch on this later, but just in case I don't, Charlie brings up a lot about the importance of leaving your, like, do not pack your schedule. He's like, you wouldn't believe how much time Warren and I leave to just thinking and reading. That he's even said, like, if someone was to fall around Warren Buffett or himself, like, it looks very academic. They're just sitting and reading, they're sitting on their ass, sitting on their ass and reading or talking one on one with people that have information that is valuable to them, but not, like, one of the most famous quirks about Warren is that he won't, he schedules very rarely, like, he won't fill up his calendar and he won't make a commitment for that far in the future. He does that very rarely. So, for example, if you want to meet, let's say you want to meet him next Thursday, or let's say you want to meet him three months from now, right? He's like, well, call me the day before and if I can do it, I'll do it. But he is rather strict about keeping, like, controlling his time, which I think is smart for everybody to do. All right. So, Munger is going to tell us we need to use checklist series as Munger is a strong proponent of a checklist approach to life challenges. Direct quote from Charlie, it says, I'm a great believer in solving hard problems by using a checklist. You need to get all the likely and unlikely answers before you. Otherwise, it's easy to miss something important. Part of the benefit of creating a checklist is the process of writing down your ideas. I've always loved the point Buffett made about the importance of making the effort to actually put your ideas in writing. In Buffett's view, if you cannot write it down, you have not thought it through. So, I actually just heard the founder of WordPress, Matt Mullenweg, talk about that. When he's looking for people to hire, he always sees how they write. He's like, listen, writing is important, but it's not the most important thing. Thinking is the most important thing, but it's really hard to think if you don't write it down. This is something I'm definitely trying to work on in my own life as well. Okay, so this is another trend that you're going to see over and over again. And this monger is telling us, if you want to have a good life, if you want to succeed at what you're doing, you need to become what he calls a learning machine. So, this is trend writing. He says, the learning and teaching opportunities related to investing are essentially unlimited. And so, this book is about investing. Our purpose is, we're just going to, every time you hear the word investing, just think about entrepreneurship, running a company, it's really very similar activities. Obviously, entrepreneurship is where our focus is. Monger likes to say that a successful investor reads successful entrepreneur never stops being a learning machine. This need to learn and relearn means that an entrepreneur must read and think constantly. Monger has said he does not know a single successful entrepreneur. Remember, I'm just changing every time he says investor, entrepreneur, who does not read voraciously. Learning about mongers ideas and methods will forever change the way you think about investing and about life. You will make better decisions, be happier, and live a more fulfilling life. Okay, so that's the end of the introduction. Let's go ahead and write into, so they're both proponents. He's going to start off with, like, who influenced them? Ben Graham, obviously, like the godfather of value, investing, heavily influenced Warren. Excuse me, Anne Charlie, and then Charlie did some tweaking to his system where it's just not just about buying fair businesses at great prices. It's about buying great businesses at fair prices. Just a few quotes here, I'm going to pull out that. I don't think need expounding on. It's Charlie Monger's distaste for complexity. The note I left myself was, complexity is not your friend. So here's Charlie, he says, we have a passion for keeping things simple. Another quote, if something is too hard, we move on to something else. What could be simpler than that? In another quote, I love this. He says, we have three baskets in, out, and too tough. We have to have a special insight, or we'll put it into the too tough basket, and just move on. And then here's Charlie quoting somebody from history that's heavily influenced him, that's Confucius. He says, Confucius said that the real knowledge, that real knowledge, is knowing the extent of one's ignorance. Aristotle and Socrates said the same thing. And so now I want to get into this concept, which I really like. So this is Monger's concept of worldly wisdom, and there's an entire chapter in this book dedicated to this. And I think it's a really useful idea. So he says, Monger has adopted an approach to business and life that he refers to as worldly wisdom. Monger believes that by using a range of different models for many different disciplines, psychology, history, mathematics, physics, philosophy, biology, and so on, a person can use the combined output of the synthesis to produce something that has more value than the sum of its parts. In developing his worldly wisdom approach, Monger uses what he calls, I'm hoping I'm pronouncing this word correctly, but you know I can't pronounce any words, a lattice of mental models. So the lattice metaphor was also carefully chosen by Monger to convey the idea that multiple models needed to acquire worldly wisdom must be interconnected. And so this is Monger expounding on that. He says, you've got to have models in your head, and you've got to array your experience, both vicarious, through reading, and direct on this lattice work of models. And now this is tragic spounding on that. He says, understanding the worldly wisdom methodology is made easier if you see it applied in an example. To illustrate the method, Monger gave the example of a business that raises the prices of its product and yet sells more of the product. This would appear to violate the rule of supply and demand as taught in economics. So if you only, his point here is if you only study economics, you might never attempt something like this because you're like what Monger was saying. Like you've got to, you've got to connect all these models in your mind. If you only have one model, you're going to think it's right and it's good, like a approximation of reality and it's not. However, if one thinks about the discipline of psychology, one might conclude that the product is a geffen good. I've also never heard this term before and what that means is people desire more of it at higher prices. Another explanation, one could conclude that low prices signal poor quality to buyers and that raising prices will result in more sales. So again, he's studying human behavior from different angles. So it could be economics, it could be philosophy, it could be psychology, and he's applying why it makes sense. And they actually use, this is actually rather important tenant to help Berkshire thinks about their businesses. They don't want to buy businesses where they're not able to raise prices and we'll get into more of that later. Simply put, Monger believes that people who think very broadly and understand many different models from many different disciplines make better decisions. This view should not be a surprise because he believes the world is composed of many complex systems that are constantly interacting. Okay, before I read his quote, there's many ways to think about this. Monger is going to call them complex systems. Mark Andreessen calls the act of starting a company and living in the world in general as a complex adaptive system. Bill Gurley would call it a multi variable non-linear system. They're all describing the same thing. And so here's Monger talking about that. He says, you've got a complex system and it spews out a lot of wonderful numbers that enable you to measure some factors. But there are other factors that are terribly important, yet there's no precise numbering you can fit to these factors. This is a really important point. You know they're important, but you don't have the numbers. Well, practically one, everybody overweighs the stuff that could be numbered because it yields to the statistical techniques that are taught in academia. And two, doesn't mix in the hard to measure stuff that may be important. That is a mistake I've tried all my life to avoid, and I have no regrets for having done that. I also say on point number two, you've heard me reference that as a human scoring the abstract. Like if there's not a number, if it's not written in front of us, we kind of ignore it, even though it's really important. Okay. So again, the best way to survive in a complex system is to one, what he was just saying about Confucius and Socrates and Aristotle. So you have to know the limits of your knowledge. I think he calls this like knowing the circle of your competence, and also just being well read. So it's a way to spot like BS. Okay, so here's, here's Munger on why he feels reading is so important. This is something he, like through, I don't know, decades he talks about. Munger's speeches and essays are filled with thoughts of great people from the past and present from many different domains. So it's kind of an extension of what we're just talking about, right? Munger is also careful to set aside a lot of time in his schedule for reading. This is Charlie Munger speaking in 1998. I believe in the discipline of mastering the best that other people have already figured out. I don't believe in just sitting down and trying to dream it all up yourself. Nobody's that smart, connects again to what he was saying about the complexity of the world. It's impossible for one person to understand everything. He also applies this to businesses, and I think one for Warren Buffett say this as well. He's like, listen, for, there's only a certain amount of businesses that one human being can know intimately, enough that they can put a large percentage of their assets into. So he talked about why they're not fans of diversification. It's like, I can't understand six, like one individual can't understand 30 or 40 different great businesses. And you don't need to. They always say, like, if you have a handful, I think the numbers like two or three great businesses in your lifetime, you can get fabulously rich. So again, these are all when you start studying and understanding how their minds work. You see how their, their philosophy is connected in, like, it's the same philosophy applied to different parts of life, whether it's learning, investing, managing, whatever the case is. And then here's more importance on, on reading. He's going to continue on this. He says, I constantly see people rise in life who are not the smartest, sometimes not even the most diligent. This is one of my favorite quotes of, of Munger. I've talked about it in many different places. I may have even mentioned it last week on the last week's podcast, but also on my, on my email list. So I say, I constantly see people in life who are not the smartest, sometimes not even the most diligent, but they are learning machines. They go to bed every night a little wiser than they were when they brought up. And boy, does that help? Particularly when you have a long run ahead of you. So if civilization can progress only with an advanced method of invention, you can progress only when you learn the method of learning. Nothing has served me better in my long life than continuous learning. I went through life constantly practicing. Because if you don't practice it, you lose it. The multidisciplinary approach. And I can't tell you what that's done for me. It's made life more fun. It's made me more constructive. It's made me more helpful to others. And it's made me enormously rich. You name it. That attitude really helps. And so Munger applies that to reading. I think it, like, obviously, I love reading as well. And that's the single best way for me to learn. But I think it applies to so many other things. It applies to podcasts, audiobooks, lectures, videos. However, you got to figure out how you would learn. I know some people that they just absolutely cannot sit down and read a book. But they will consume audiobooks voraciously. To me, it's all the same. It doesn't matter. Okay. Just whatever works for you. Okay, so now he's got this famous speech on YouTube. And it's called the psychology of human misjudgment. And it's like an hour and a half lecture. I'd recommend reading it. But this chapter, I mean, has the same title. And I'm just going to pick out some things where he feels like he's identified through studying the humans, like where we're most likely to make mistakes. And then, you know, being aware of that mistake and then trying to avoid in our own life. So I'm just going to pull out some of the parts that I found most interesting. And the first one is this thing called reward and punishment, super response tendency. And so let me just read this quote from Munger. He was talking at Harvard University in 1985. And this is what he said. Almost everyone thinks he fully recognizes how important incentives and disincentives are in changing cognition and behavior. But this is not often so. For instance, I think I've been in the top 5% of my age cohort. Almost all of my adult life in understanding the power of incentives. And yet I've always underestimated that power. Never a year passes. Never your passes, but I get some surprises that pushes a little further my appreciation of incentive superpower. And another way to say this, he said a few years later was, the iron rule of nature is that you get what you reward for. If you want ants to come, put sugar on the floor. Okay, so he's just saying, listen, we are heavily influenced by incentives. So when you're thinking about that from product design or dealing with other people or just analyzing like, why would somebody do that? There's usually an incentive hiding behind that. So he says, then this applies to, they talk a lot about the importance of incentives when you're, when you're figuring out compensation in your company, right? So as Munger believes, the structured compensation incentives is critical. If the right structure exists, then a seamless web of deserved trust, this is also a term that's repeated over and over again, can be created which lessons problems related to this tendency. For example, it is surprising how many people fail to recognize how performance suffer as if you pay someone in advance rather than after their work has been completed. It's precisely because of the dangers of misaligned incentives that Munger and Buffett choose to make compensation decisions themselves whereas they delegate almost all management responsibilities. So what they're talking about there is this weird, maybe weird stuff to word. This unique way that, you know, the conglomerate that is Berkshire Hathaway is structured where it's almost completely decentralized. They're famous for buying businesses and then leaving the people like alone to run them. But when it comes to, they do control some, some decisions are centralized. One, where to invest obviously the profits from that business. And two, the compensation of the people in the business. So again, I think that's a signal to us like that's obviously important to them. If they're saying, no, no, we're going to do this ourselves. Okay, another one of the, the psychologies of human misjudgment is something they call doubt avoidance tendency. And I think this paragraph describes, like gives you a good summary of it. Says the confidence of entrepreneurs bolstered by doubt of an avoidance tendency creates positive benefits for society in the aggregate by generating productivity and genuine growth in the economy. Even if legions of entrepreneurs may fail. The seem to let put it this way. Quote, most of you will fail, disrespected and polished. But we are grateful for the risk you're taking and the sacrifices you're making for the sake of the, of the economic growth of the planet and pulling others out of poverty. You're the source of our anti-fragility, our nation thinks you. I mean, says researchers believe that doubt avoidance tendency exists because a brain's processing load can be substantially reduced if a person rejects doubt. That's very dangerous though. Another one, curiosity tendency. And I'm not reading all of them. These are just the ones that I find most personally most interesting. There's a bunch of them in here. So curiosity tendency. This is a Charlie Munger on that. Experience tends to confirm a long-held notion that being prepared on a few occasions in a lifetime to act promptly in scale in doing some simple and logical thing will often dramatically improve the financial results of that lifetime. So this is kind of a core tenet of the way they invest, right? A few major opportunities clearly recognizable as such will usually come to one who continuously searches and waits with a curious mind that loves diagnosis involving multiple variables. Okay, so there's the whole complexity thing again and the whole reason to be a learning machine because he's saying it's a curious mind. And usually if you're curious, that means you want to learn. And then Charlie continues here. And then all that is required is a willingness to bet heavily when the odds are extremely favorable using resources available as a result of prudence and patience in the past. So prudence, he's meaning for a gallery, sitting on tons of cash, keeping your operating expenses low, and then he preaches over and over patience. That's actually a really good, now that I've read two books on Munger and I've watched a ton of his talks and things. It's actually a really good, I didn't think about this when I took that, when I highlighted this. But that one paragraph is actually a really good view into the mind of Charlie Munger. Let me read that again. Experience tends to confirm a long-held notion that being prepared on a few occasions in a lifetime to act promptly in scale. Okay, so that means go all in. He's not going to be like, oh, if you really believe in something, they talk about if you look at them, they look like they're doing nothing and then they move fast and they move, they make an investment fast and they do it. They usually don't put a tiny bit of money into kind of a self-confidence in their own skills. So to act promptly in scale and doing some simple and logical thing, we'll often dramatically, there's the whole simplicity thing again, right? We'll improve dramatically improve the financial results of that lifetime. A few major opportunities, remember what I was just saying a few minutes ago, how they say, you just need a few good, a few wonderful businesses to make yourself really rich. Clearly recognizable as such, we'll usually come to one who continuously searches and waits, learning machine, with a curious mind that loves diagnosis involving multiple variables, complexity. And then all that is required is a willingness to bet heavily, they're not fans of diversification, when odds are extremely favorable, using resources available, saving your money, it's about prudence to patients in the past. So yeah, that is a really good combination of a lot of the things I've learned from Munger. Now this is trend, expounding in that, he said curiosity, okay, so this isn't important. Curiosity can cause an investor to engage in too many activities or a business owner to offer too many products and services. Startup founders can end up repeatedly pivoting their business into oblivion if they overload on curiosity. At the same time, curiosity can lead to important breakthroughs for a business. So you see this a lot, somebody made the point on Twitter and I wish I saved a treat, but I didn't. If you really analyze some of the most successful businesses in the world right now, and I guess in the past even then, they were found on extremely simple ideas. So let's go through some of the example. Apple has a bunch of different products, but the vast majority of the profits they will ever make come from one product, the iPhone. Google, I know they try to do all their stuff, but all their profits come from one thing, making the world's information online searchable. So these are simple ideas, that doesn't mean they're easy to do. Uber, press a button, get a ride. Again, simple ideas, not easy, but very simple. So I love this idea where it goes back to what I was saying about Andrew Carnegie where he was lecturing Henry Frick and other people. He's like, go study how the great fortress of the world are made. It's like, it's not a scatter, he called it like a scatter shot approach. Focus on what you're doing, one thing. His case is like, I'm just going to make money on steel. So I really like what Trent is saying here, starter founders can end up repeatedly pivoting their business into oblivion if they overload on curiosity. A business owner can offer too many products and services. And then that last sentence, I think, is also important. It's like, at the same time, curiosity can lead to important breakthroughs for a business. So there's a dichotomy there. Moving forward, another one is, and this is how to know it left myself as another reason we should all be nicer. Rest, reciprocation, you know the word, I'm trying to pronounce it. You know what, here, my co-host will pronounce it. This YouTube channel is a lifesaver for me. Reciprocation. Okay, so reciprocation tendency. So this is Charlie Munger on it. The automatic tendency of humans to reciprocate favors and disfavours has long been noticed as extreme. What an interesting choice of words, extreme. So this is Trent talking about this. Actually, he's quoting, he's the guy that wrote influence. Chialdini. I think it's how you pronounce the last name. People will help if they owe you for something. You did in the past to advance their goals. That's the rule of reciprocity. That's the end of his quote. The reverse is also true if you have done something that negatively affects a person. The urge to reciprocate favors and disfavours is so strong that even someone smiling at you is hard not to reciprocate. The indebted feeling that humans have when they receive a gift tends to make that person feel uncomfortable until he or she can extinguish the debt. So this is him, obviously, setting psychology. The reason I said this is another reason we should be nicer is because you might be having a bad day and taking it on somebody else, but then what is he saying? He's like the automatic tendency of humans to reciprocate favors and disfavours has long been noticed as extreme. What I always talk about in the podcast is something I've learned from studying other areas of history. Humans are virtuoso, what I call virtuoso of violence. There's no reason to go around making enemies. There's be nicer and that person's hopefully is not going to feel the need to reciprocate what trend here is calling a disfavor. Moving ahead, this is funny. This one is called excessive self-regard tendency. So he says this is trend talking companies are not immune from this excessive self-regard tendency, including Berkshire's portfolio companies. Now Charlie is going to talk about this. He said Geico got to thinking that because they were making a lot of money, they knew everything. So anybody with the experience of in the ecosystem of entrepreneurship has seen this behavior before, because they were making a lot of money, thought they knew everything. And they suffered huge losses. All they had to do was to cut out all the folly and go back to the perfectly wonderful business that was lying there. And this happens to people that should have a high regard. We're all prone to excessive self-regard. I think about the entire podcast I just did on Steve Jobs time and next. When you create an amazing product and you're in your early 20s, you're worth hundreds of millions of dollars in the eight in the 70s, I think the early 70s, 80s. And you do that for a decade, then you come back and the entire Randall Strauss book, the next big thing, in case you haven't listened to the podcast yet, is all about this excessive self-regard. It's amazing to me the difference between the quality of entrepreneur and Mike Moritz's book Return to the Little Kingdom, which is at the beginning focused on just the beginning of Steve Jobs. Where he's still like a young and mature, but he's undoubtedly like a talented entrepreneur. And then obviously what we see when he comes back to Apple in the late 90s and early 2000s compared that that's the same person that in the let's say the late 80s, early 90s was doing everything incorrectly. So we're all prone to this. I'm definitely prone to it as well. So it's something to be aware of. Another one, social proof tendency. Here's Charlie Munger on that. Big shot businessmen get into these waves of social proof. Do you remember some years ago when an oil company bought a fertilizer company and then every other major oil company practically ran out and bought a fertilizer company? And there was no more damn reason for all these oil companies to buy fertilizer companies, but they didn't know exactly what to do. And if Exxon was doing it, it was good enough for mobile and vice versa. I think they're all gone now, but it was a total disaster. And trend expounding on that. Humans have a natural tendency to follow a herd of other humans. In other words, because humans do not have unlimited time and complete information, they tend to copy the behavior of other humans. I love the Munger's use of this word constantly. So this is the twaddle tendency. Charlie Munger speaking, it says, it's obvious that if a company generates high returns on capital and reinvest that high returns, it will do well. So right, another thing that's simple, but not easy. But this wouldn't sell books. So there's a lot of twaddle and fuzzy concepts that have been introduced that don't add much. And so he talks about the concy about modern finance salt, twaddle, which is just a really a play way of saying bullshit. And I just love, I absolutely love this idea about what we're doing here is real simple. It's not easy. But again, no one can sell you it. And another reason I think why he's read hundreds of biographies as opposed to hundreds of the latest business book. And I used to, I felt when I was, let's say, I have to go back and look at Amazon, but let's say the last 12, 14 years, I bet you when I started college, I read a lot of business books. Here's this one idea. And then it took me way later in life to actually skip over and get over that phenomenon. Because you're young, you don't know anything about the world. I still don't know that much about the world. And you're just looking for answers. And you're trying to see, oh, this guy must know, or this girl must know what's going on because they have a book and it was published. And the idea is obviously good. And you realize that's not an indication that the idea is good. So I love this quote, and I just want these traits. This is Roger, an author, Roger Lowenstein, who's this quote from the biography he wrote on Warren Buffett. It says, genius was largely a genius of character, right? Not intellect, which is very important, an interesting distinction, in my opinion. So what it's saying, largely a genius of character, of patience. And now he's going to list off the traits, patience, discipline, and rationality. That's what I mean by why I want those traits. His talent spraying from his unrivaled independence of mind. I'd also like to do that. I'd also like to be capable of that. An ability to focus on his work and shut out the world. So yeah, those are just great. I mean, who doesn't want that? Who doesn't want to be patient? I'm not patient, disciplined. I'm somewhat disciplined. Rational, I have no idea. And then independent of mind and ability to focus on work and shut out the world. I think those are fantastic traits, right? Oh, so I didn't explain. I just transitioned out of the psychology of human misjudgment. And now they have this concept, Charlie, and I think Warren has the concept. They call it the right stuff. And it's just like, well, I guess that's a good opening of it. It's just traits and ideas that people have, which they consider like to be successful at what they're doing, investing and starting companies, buying companies, et cetera, et cetera. Like this is the stuff you need to do, right? So this is the chapter identifies a few of the attributes that make up the right stuff of a successful entrepreneur investor as identified over the years by Munger. So there's a bunch of traits in here. I'm only not going to obviously read all of them. We're just going to pick out the ones that I found interesting. So this one's on patients. Success means being, these are quotes from Charlie. Success means being very patient, but aggressive when it's time. Another one, it would be nice if finding great investments happen all the time. Unfortunately, it doesn't. Hence the need for patients. Another one, patients combined with opportunity is a great thing to have. My grandfather taught me that opportunity is infrequent, and one has to be ready when it strikes. That's what Berkshire is. And then later on, this is interesting. He's telling us that he's telling us that we need to study probability. Here's a quote. If you don't get elementary probability into your repertoire, you go through a long life, like a one-legged man in an ass-kicking contest. And if you want to learn more about probability, I would read the entire inserto, but if you can only read one of the collection, I'd read full by randomness. I think a little trick that I have, as far as if you want to be good at conversations, I always like to ask questions like that. If you can only recommend one book for somebody to read. That's it. They can only read one book. What would that be? My answer to that question would be full by randomness by missing teleb. But even last night, I was texting friends. I was like, hey, if you can only visit one country that you haven't gone to yet, what would it be? When you put these artificial constraints on it, you really get to know people better, to know their thinking. Sometimes I'll ask the question, when I'm at dinner, you're trapped on a desert island. You're going to be trapped on a desert island. You can only bring one album. What are you bringing with you? You're going to listen to this one album for the rest of your life. What is it? I think it's a good idea how they think about music. It's just worse for everything. Books, podcasts, just anything. Cities to visit, experiences to have. So anyways, if you want to learn probability, I think one of the best books you can read is full by randomness on that. This is Munger's unique definition of being disciplined. We've got great flexibility in a certain discipline in terms of not doing some foolish things just to be active. Remember, that goes against human nature. Discipline in avoiding just doing any damn thing just because you can't stand in activity. So I think that little idea comes from his lifelong study of human nature. Another quote on this, I think it's possible for a great many people to live a life, I think it's possible for great many people to live a life like that, where there isn't much risk of disaster, and where they're virtually sure to get ahead a reasonable amount. It takes a lot of judgment, a lot of discipline, and an absence of hyperactivity, absence of hyperactivity. By this method, I think most intelligent people can take a lot of risk out of their life. So he's telling us, you need to have judgment, discipline, and an absence of hyperactivity. Another one of his traits when he goes to write stuff is honesty, and here's what I'm talking about that. Generally speaking, when Berkshire has the power, we try to be more than fair to the minority who don't have the power and who depend on us. You can say, aren't they wonderful moral people? I'm not sure we get credit for a lot of morality because we early knew how advantageous that would be to get a reputation for doing the right thing and it's worked out well for us. My friend Peter Kaufman said, if the rascals really knew how well honor worked, they would come to it. So this idea that being honest and being honorable is actually a long term competitive advantage. Most people optimize for the short term as what they're talking about. Mugger continues, it really has worked well. People make contracts with Berkshire all the time because they trust us to behave well where we have the power and they don't. There's an old expression on this subject which is really an expression on moral theory. How nice it is to have a tyrant strength and how wrong it is to use it like a tyrant. It is such a simple idea but it's a correct idea. I just love Munger's own love of simplicity. Continuing this another quote on honesty, more often we've made extra money out of morality. Ben Franklin was right for us. He didn't say honesty was the best morals. He said that it was the best policy. Another trait for the right stuff is long term oriented. Charlie says, almost all good businesses engage in pain today, gain tomorrow activities. Munger has recognized that it's hard to think on a long term basis when you're just getting started or starting over. For this reason he said once that accumulating the first $100,000 is a bitch. That is reason enough to work hard to assemble a basic financial cushion. Not only is it not fun, it is a handicap to live on the edge of financial ruin. This applies to your personal finances as well as your company finances. It's amazing to see how few people actually and businesses adhere to this very simple idea. In long term, the power of compounding becomes ever more evident. Unfortunately, understanding the power of compounding is not a natural state for the human race. I always wondered why people use human race. Why isn't a human species? However, it is a critical task. This is more on Charlie speaking about this again. Understanding what the power of compound interest and difficulty of getting it is the heart and soul of understanding a lot of things. What does he mean by that? I think all good things in life compound. So he says many things that are not... this is trans speaking. Many things that are not directly financial will compound. Skills, relationships, and other aspects of life can compound and benefit a person who invests time and money wisely to cultivate these things. Another trait that he identifies as passion. This is Charlie speaking about that. What matters most? What matters most? Passion or competence that was born in? Berkshire is full of people who have a peculiar passion for their own business. I would argue passion is more important than brain power. That's a hell of a statement. This is trans expounding on that. If you do not know about the link between passion and success, you have not been paying attention. People who are passionate tend to work harder and invest more in achieving their goals. Passionate people also read and think more. Passionate people tend to have an informational edge over others who are not as passionate. This is also an indictment. If this is true, which I tend to believe it is, it's an indictment on our education system. I just read who knows how they come up with these calculations if it's true or not, but I think 75% of people are working in a job that they don't like. They're just literally doing it for money. It's really hard to be really great at something that you don't actually care about. If you don't actually care about it, you're not going to invest the time outside of work to get better at your skill, whether it's reading and understanding the history of the industry that you're in or doing what Danny Meyer and Bill Gurley took called professional research. Often the level of passion you will have for a topic will grow over time. This is another idea about compounding. They keep hitting on, right? The more you know about some topics, the more passionate you will get. That's probably true. Some of the best passions in life grow on you in a non-linear way after a slow start, which is just another word for compounding. Another trait that they consider as the right stuff, studious. This is Charlie learning from other people's mistakes is much more pleasant. He's continuing on this idea that you need to be studious and I think they kind of go, passion and they kind of go hand in hand. If you're naturally passionate about something, you're just going to, you can't help but study and want to learn everything about it. I think finding passions to key to unlocking your inner studious person. Really what they're talking about is being studious. It's just about ignorance removal. In my whole life, I've known no wise people who didn't read all the time. None. Zero. You'd be amazed at how much worn reads and how much I read. Another quote, development into a lifelong self-learner through voracious reading. Cultivate curiosity. Let me read that again. Develop into a lifelong self-learner through a voracious reading. Cultivate curiosity and strive to become a little wiser every day. Again, he's already hit on that. He's saying it a different way. Another way to think about this is you've got to work where you're turned on. Again, I think passions and being studious is connected. He's still talking about being studious here. He's got a lot of quotes on this. Apparently it's important to him. The main contribution of buying C's candies, they mentioned C's candies constantly, was ignorance removal. If it weren't good, if it weren't good at removing ignorance, what's it? Maybe birkshire? If it weren't good at removing ignorance, we'd be nothing today. We were pretty damn stupid when we bought C's. Just a little less stupid enough to buy it. The best thing about birkshire is that we have removed a lot of ignorance. The nice thing is we still have a lot more ignorance left. I love this guy. Another trick is scrambling out your mistakes, which is enormously useful. We have a shirt-of-fail department store, a trading stamp business shirt-of-fold, and a textile mill. Out of that comes birkshire. That's really fast anyway. Look at things. Think about how we would have done if we had one. Think about how we would have done if we had a better start. This guy's hilarious, man. Some people call him an ass or arrogant, but I don't interpret it that way. I always say I'd appreciate it. It's kind of the opposite of arrogance. There's so much more things that I'm ignorant about and haven't fixed yet. He's saying these words, and he says 90s. He's saying the nice thing is we still have a lot more ignorance left. I just think it's, again, I mean, he want to call it arrogant, whatever, but I prefer real arrogance to false modesty. I like that he has an independent of thought. He gets to say what is actually on his mind, where I feel a lot of public statements is basically a performance art. Another trait. We're still on the right stuff. This one is frugal, and I had this thought. I had this idea, I had this thought, rather, that if you were able to transcribe every single word spoken to Foreign Founders podcast, that the most common word uttered on this podcast has got to be the word frugal. When I read this quote from Charlie Munger about the importance of frugality, which obviously he's going to be very important to them, it made me think of one of my favorite scenes. I've said before, I was fairly obsessed with Game of Thrones. When I read this part earlier, I left a note on one of my favorite scenes in Game of Thrones. Two of my favorite characters are talking, and it's Tywin Lannister and Elena Tyrell, and they're paying for this huge royal wedding. Tywin walks up to her, and she's like, this is a bit much, don't you think? Look, this is ridiculous. She's like, oh no, it's what the people expect, and then he says something that I love. And he says, people who spend money on this sort of nonsense tend not to have it for long. And again, I think that applies to your personal finances and also to your company finances. And this is an example. You know, Berkshire has one of the most successful companies in existence, and this is Charlie describing. He says, we don't have an isolated group of managers surrounded by servants. Berkshire's headquarters is a tiny little suite, and Trent continues to expound on Munger's frugality, and maybe who influenced him to be frugal. He says, like his idol Benjamin Franklin and his partner Buffett, Munger is relatively frugal given his wealth, especially when it comes to operating investment expenses. In addition to the axiom, a penny saved is two pens deer. Benjamin Franklin wrote, the way to wealth is as plain as the way to market. It depends chiefly on two words, industry and frugality. That is, waste neither time nor money, but make the best use of both. That's the best description of frugality. And I think why, you know, it's not a coincidence that some of the entrepreneurs that we study adhere to this principle. You're not going to get, you're not going to be able to build a successful company, especially on the scale that these people do, wasting time or money. Without industry and frugality, nothing will do, and with them everything. That's the end of Benjamin Franklin's quote. Other Graham value investors have a similar focus on frugality, this guy named Walter Schloss, was famous for running his investment firm out of a single room leased from another investment firm. I suspect that some of the frugality that can be seen in Graham value investors springs from their understand, this is interesting. Why, like, why are you doing this, right, other than, you know, just being a miser and sitting on a bunch of money. He says, I suspect that some of the frugality that can be seen in Graham value investors springs from their understanding of opportunity cost and the power of compounding. They naturally compare the value of consumption today with the value of greater consumption tomorrow, which causes them to be frugal. That's, that's fantastic. This is being, the idea of being risk averse, really what Charlie's telling us here is how to run your business, and again, the note of myself, this is also good for your personal life as well. Here's Charlie, you can easily see how risk averse Berkshire is. In the first place, we try to behave in such a way that no rational person is going to worry about our credit. And after we have done that, we also behave in such a way that if the world suddenly didn't like our credit, we wouldn't even notice it for months, because we have so much liquidity. That double layering of protection against risk is as natural as breathing around Berkshire. It is just part of our culture. Okay, so I'm skipping way ahead in the book now. Towards the end, they have another chapter. It's called the right stuff, but this is the right stuff in business. And it's talking about like how they actually manage Berkshire and what they prioritize. So this is on the importance of capital allocation and the management of a business. One major fundamental aspect of any business is management. Munger and Buffett are famous for delegating almost all authority and responsibility to Berkshire subsidiaries to run their own business. This is what I was mentioning earlier. With the exception of capital allocation and the creation of compensation systems. In other words, while management of the business within Berkshire is extremely decentralized, the management of capital allocation and compensation systems is extremely centralized. So you have a decentralized management of the business of the subsidiaries and yet the complete control of capital allocation and compensation systems. Munger and Buffett believe that capital allocations are skilled that many managers simply do not learn before they become chief executive officers of companies. They believe this could create big problems for a business because CEO will often not know how to make critical decisions that will maximize shareholder return. And you can already argue that's one of them in addition to many of his other talents. Jeff Bezos is fantastic at this. The most important task in a capital allocation is to take cash generated by a company and deploy it to the very best opportunity and avoid what Buffett called the institutional imperative. Now what's the institutional imperative? This is a quote from 1989 for more Buffett. Buffett rationality frequently wilts when the institutional imperative comes into play. For example, number one, as if governed by Newton's first law of motion, an institution will resist any change in its current direction. Number two, this is such an important point. Just as work expands to fill available time, corporate projects or acquisitions will materialize to soak up available funds. I don't think I've ever heard anybody else say that. Three, any business craving of the leader, however foolish, will be quickly supported by detailed rate of return and strategic studies prepared by his troops. Four, the behavior of peer companies, whether they are expanding, acquiring, setting executive compensation or whatever, will be mindlessly imitated. So he's telling you to avoid all this and those four things he calls institutional imperative. This is trend now. The culture at Berkshire has been created by Buffett and Munger, so as to reject the institutional imperative like a foreign body. The heads of many companies are not skilled in capital acquisition. Another thing that they say is a skill that you need to develop in business. And I'll expand on this because they have entire chapter just on moats, but they say you need to develop moat widening skills. This is what I mean about the ability to raise prices that they love. Charlie says, I can see instance after instance where that isn't what people do in business, meaning widening the moat. One must keep their eye on the ball of widening the moat to be a steward of the competitive advantage that came to you. Munger wants managers of the business who have an ownership mentality toward the business. And Munger is now going to quote Carnegie and others. Carnegie was always very proud that he took very little salary. Rockefeller and Vanderbilt were the same. It was a common culture and a different error. All of these people thought of themselves as the founder and their partners as founders. If you think about Carnegie's unique private partnership, they all had a small percentage of the business. And so what are they actually taught? Like why would you do that? And the importance is they want risk and benefits to be symmetrically allocated. So skin in the game in other ways. This is an interesting thought I've never heard of. This is Munger on the curse of scale. For example, if you worked for AT&T in my day, it was a great bureaucracy. Who in the hell was really thinking about the shareholder or anything else? And in a bureaucracy you think the work is done when it goes out of your in basket into somebody else's in basket. But of course it isn't. It's not done until AT&T delivers what it's supposed to deliver. So you get big fat dumb unmotivated bureaucracies. The constant curse of scale is that it leads to big dumb bureaucracy. This is kind of, I never articulated this way. But this is kind of why I would say like I favor smaller companies than I try to support independent entrepreneurs whenever I can. Because as businesses grow inevitably, as they scale, the end result for the end users usually worse. Some of the best service you're ever going to get and some of the best products you're going to get are small batch independent owners. People that are actually there. In a large company, the owners are separated from customers in many cases. So I love that. The constant curse of scale is that it leads to a big dumb bureaucracy. Who's going to get great products or services from a big dumb bureaucracy? Let's see. This is Charlie telling us how to make decisions. Intelligent people make decisions based on opportunity costs. In other words, it's your alternatives that matter. That's how we make all of our decisions. And this is the chapter on moats. So there's a bunch of, just like anything else, he's got a bunch of numbered lists about what he feels builds a moat. Some of them, I don't even know if they made sense to me, so I skipped over a bunch. But I'm just going to pull out the ones that are interesting. So one supply side, economies of scale and scope. If a company's average cost, this is how you widen a moat. So basically they're saying, hey, if you don't have a moat, you can't raise prices. If you can't raise prices, you might have a commodity business, which means you have heavy competition. And all your profits are going to be competed away eventually. So it says supply side economies of scale and scope. If a company's average cost for fall, when more of a product or service is produced, there are supply side economies of scale. Intel is a classic example of a business that benefits from economies of scale. And so this is, it says regarding the impact of supply side economies of scale, Munger has pointed out. Now we're going to go some quotes that Illustrate has thinking on this. In some businesses, the very nature of things, cascades toward the overwhelming dominance of one firm. It's tends to cascade to a winner-take-all result. And these advantages of scale are so great, for example, that when Jack Welch came into General Electric, he just said to hell with it. Were either going to be number one or number two in every field we're in, or were going to be out? That was a very tough-minded thing to do, but I think it was a correct decision if you're thinking about maximizing shareholder wealth. Another quote. Actually, no, this is trend speaking now. If it is cost-efficient for a company to produce several different products or services, a company can also benefit from supply side economies of scope. So now that he said economies of scale and economies of scope, economies of scale, everybody knows who that is. Economies of scope is different. So you're benefiting because to benefit from economies of scope, a business must share resources across markets while keeping the amount of those resources largely fixed. Businesses that desire to benefit from economies of scope must avoid running as isolated units. So basically, you have one successful product. The customer already knows who you are. If they already know who you are, they're more likely to buy another product from you. That's the economies of scope. This is the benefits of expanding a mode with demand side economies of scale, which almost no one uses a term, and everybody uses the other moniker for this, which is network effects. I'm not going to spend too much time on this because it's talked about ad nauseam. It says demand side economies of scale, also known as network effects, results when a product or service becomes more valuable as more people use it. So Craigslist, eBay, Twitter, Facebook, you all know this already. But American Express, an example of a company in the Berkshire portfolio with the network effect benefits. The more merchants that accept a card, the more valuable the service gets, the more people use their card, the more valuable the services are for the merchants. Thus, over time, that concept expansion expands their mode. Another way to expand a mode is brand, and that's very different. So it says, a mode powered by brand is something very different from one created via supply side or demand side economies of scale. Now, they're going to use regarding brand power. This is Charlie Munger. He says, the information, this is really interesting. Talking about, I'm building a personal brand, or I'm thinking about branding. I hate when people talk like that, but the reason I hate when people talk like that is because they're not really adding anything new to discussion. They're just kind of mimicking other people, right? I never thought about, and maybe that's my fault for not listening intently, maybe people have made this point. But Munger is the first person to talk about what a brand is. A brand is just an informational advantage. It's a way, in a small amount, where there's a name of a company, a logo, an image, whatever, to convey a lot of information about that. Think about that. Think about when you hear the word Disney. That's one word. What is that? Six letters. Think about all the stuff that pops into your mind. That is a brand that has an informational advantage. Because in six letters, it tells you hundreds of different things that may come to mind. So this is the way Charlie thinks about brands, which I think is really smart. The informational advantage of brands is hard to beat. And your advantage of scale can be an informational advantage. If I go to some remote place, I may see Riggly chewing gum alongside Glotsis chewing gum. Well, I know that Riggly is a satisfactory product, whereas I don't know anything about Glotsis. So he talks about the ability for Riggly to increase prices just on that informational advantage. So in effect, Riggly is simply being so well known as an advantage of scale, what you might call an informational advantage. Everyone is influenced by what others do and approve. We already covered this earlier. Another advantage of scale comes from psychology. The psychologists use the term social proof. We are all influenced subconsciously, and to some extent consciously, by what we see and what we see others do and approve of. Therefore, if everybody is buying something, if everybody is buying something, we think it's human. All told, your advantages can add up to one tough mode. A very important test for Buffett and Munger in determining, though this is trend talking, in determining the strength of a brand-based mode is whether a competitor can replicate. This is another interesting idea. Okay, so a very important test for Buffett and Munger in determining the strength of a brand-based mode. So how do you check that? How do you know this? Is whether a competitor can replicate or weaken the mode with a massive checkbook? As just one example, here's what Buffett said about Coke at the 2012 Berkshire meeting. If you gave me $10,20 or $30 billion to knock off Coca-Cola, I couldn't do it. And now what's interesting is in this chapter on modes, then trends like, okay, let me analyze Berkshire and see what kind of modes they have. And he says some companies, like Berkshire, have been able to create a mode as a result of combination of better systems and culture than their competitors. So I'm just going to go over some of the ideas that he has. Number one, what adds to the mode of Berkshire? He says Berkshire is tax-efficient. They're well known for buying something and then holding it forever. And if you let something compound for 30 years and you don't pay taxes on it once, you save a ton of money over that time period. Another one, which is just another way to save their frugals, they have low overhead. And this is a quote from New York Times. It says Berkshire has a corporate headquarters with a mere 25 people on a single floor of an office building. From there, Mr. Buffett and his staff allocate capital on contemplate acquisitions of sales, hire fire people to run those popular companies, and otherwise stay out of the way. Another way they expand their mode is that the private buyer first resort, and this comes ties into what Charlie was saying earlier, if people understood the long-term benefits of acting with integrity and honesty and morality, it's going to add to your reputation. Those reputation of future can give you access opportunities that other people just won't have. So it says, if you spend your life building a business and decide to sell the company, Buffett and Munger offer you a unique opportunity. They will let you, and in fact, want you to, continue running the business. Your other option is selling the business to a private equity firm that does not give a damn about your business and will probably load it up with debt creating a serious risk that the company will fail. Another one, Berkshire, has what they call permanent capital, and they basically say, this is some guy, I don't know who he is, his name's Bruce, that they're quoting, that is describing Berkshire. He says, that's why we keep a lot of cash around. Cash is the equivalent of financial volume. It keeps you cool, calm, and collected. And I'm going to skip the other ones. But I want to describe, well, this is them talking about votes again, and I'll leave the idea of votes alone. It says, so you know you have a vote when you can raise prices. This is Munger again? Yep, this is Munger again. There are actually businesses that you will find a few times in a lifetime where any manager could raise the return enormously just by raising prices, and yet they haven't done it. So they have huge untapped pricing power that they're not using. That is the ultimate no-brainer. Disney found that it could raise those prices a lot. Anybody with little kids knows this, it's ridiculous, and the intended stayed right up. So a lot of the great record of just naming some old CEOs of Disney came from just raising prices at Disneyland and Disney World, and through video sales of classic animated movies. At Berkshire Hathaway, Warren and I raised the prices of C's candy a little faster than others might have. And of course, we invested in Coca-Cola, which has some untapped pricing power. Creating a moat is something that people like Ray Croc, founder McDonald's, Sam Walton, S.D. Lauder, Mary K. Ash, and Bill Gates have accomplished. And finally, I'll close on this, and this is trend talking, and this is really, this is really my death. Other people throw around the term mental model, and for a while, I didn't even know what the hell it was. And I think this is just the easiest way to think about what it is, at least in terms of what we're trying to accomplish here on the podcast. So it says, with that less bit of wisdom, I send you off into the world, hoping that you two learn to concentrate and invest successfully. Whenever in doubt about making a decision related to investing or otherwise, ask yourself this, what would Charlie Munger do? And so what I mean is what I mean by that's my definition of a mental model. The reason that I read, so I didn't just read one book on Steve Jobs, I read like six, and I try to go deeper on these people's, because you're exposing yourself to a lot of information, and more importantly, how they think. And to me, that's what the mental model is. Like if you constantly reading biographies on Henry Ford, Steve Jobs, et cetera, et cetera, you're going to eventually be able to, in your own mind, develop a mental model of how they think. And then when you're presented with a decision, like this is kind of the transmission of the ideas that are in these biographies, right, the practical application of these ideas, is you can sit there and say, okay, I'm presented with an opportunity, what would Charlie Munger do? What would Henry Ford do? What would whoever you personally identify with their philosophy of business do? Same reason if you're on my email list. Like I take notes on a lot of the same people over and over again, because what I'm doing is I've identified people that I admire their mind, and I'm trying to go deeper so I can develop mental models on them. So one example is this Mark and Jason was giving a talk, and he's one of the people that I'm interested in how he thinks, but he's done his own research on Peter Teal. And I think Peter Teal's one of the smartest people around. And so he says he has a mental model of Peter Teal, and as he goes about his day, he says he has a little Peter Teal on his shoulder. And I'll ask himself, well, what would Peter Teal say, or what would Peter Teal think, or do, or whatever the case is? And I don't think you need mental models. There's been what? I don't even know how many founders we've covered so far. But over time being exposed to more of these ideas, you're going to identify the people that just they click with you. You can't even really... I don't even think you can explain why. Maybe you can point to certain ideas that you like of theirs or certain ways they run their business or whatever it is, but it's deeper in that. It's more of an abstraction. So that's the way I think, whenever here, people talk about mental models. I think it's been personal mental models. I know other people are like, this is my framework on how to make decisions. I wish I could say I have those. I just don't. I think of things, and maybe it's because I spend so much time setting people as opposed to just decision frameworks or whatever the case is. So anyways, Charlie Munger, if you want to learn more about him, if you want to... If you thought this podcast was interesting, you're probably like the book. So if you want to read the book, there's a link in the show notes. You can just click it and take you right there to the book. You can buy it. If not, you can go to amazon.com forks.shop forks.founderspodcast. You'll see this in every other single book. It's like the visual representation of this podcast presented in reverse chronological order. If you purchase using either the links in the show notes or going to that URL, the Amazon will give me a small percentage of the sale and no additional cost use. It's a great way for... I always say you're supporting yourself because you're getting a book that will benefit your life and you can apply those ideas as you learn that book to your own work and get an unbelievable return on that investment. You're supporting the author who's taken a lot of time writing these books and you're supporting me who's hopefully introduced you to these ideas and expanding it to an audience they may not have known about those ideas. Other than that, if you're listening to this and you have not become a misfit yet, misfits are the people that financially support this podcast. As you see, I don't do any ads on the podcast. I rely on the people that give value out of my work. As a result, half of my podcasts, like this one, are ad-free and free to everybody. You don't have to do anything but press play and listen. And you get the benefit of me reading, taking notes and doing all this work. But if you want more, every other podcast I do is reserved exclusively for misfits. So if you haven't signed up yet, you're missing out on half the podcast. You can click the link... Oh, so I need to bring this up. Several people have sent me messages and said, David, you are not being clear. You're not communicating clearly. So I've gotten this message enough times that I need to figure out another way to do this. They're like, I wanted to sign up for misfits. I couldn't figure it out. It's not like they had to... It wasn't making it easy. So I thought I was making it easy because I include every single link in your podcast player. And 90-something percent of the people listen to me, listen to me on Apple podcasts or overcast. And they make links clickable. So when you're listening to me, just click on the link. If you want to sign up for your misfit, you click on it. You can use Apple Pay in like 10 to 20 seconds. You'll have the private RSS feed, which is all what a podcast really is. The private podcast feed installed into your podcast player of choice. And then you can listen to all the unlock... You can really see you're unlocking all the other misfit podcasts that you haven't heard yet if you haven't upgraded. So I thought that was really easy. Some people prefer just to go to the URL. So you can open up the browser on your phone. Go to glowgloww.fm. You know, every podcast. Like the .fm extensions like every podcast service or podcast loves that extension. Anyways, glow.fm forward slash founders. So you can either go directly to the URL and do that. Or you can tap the link that's in the show notes. Or if you want to take a roundabout way for some weird reason. You can also go to founderspodcast.com. And I have the link on every single podcast I've done. Although people said that I should have it right in the beginning when you go to the website. So anyways, I appreciate the feedback. And I know that I'm obviously making a mistake if multiple people have run into the same thing. And that's not obviously not my desire. My desire is to make it as simple and easy for you to support. So if you sign up for it, here's the thing. If you sign up for a misfits, you pay a small monthly fee. If you're willing to pay a small monthly fee and press play, you're going to get four podcasts. Because I have two, three, two misfit podcasts a month. All you have to do is sign up and then listen. And then you're going to have some of the best ideas from some of the greatest entrepreneurs in history. Just injected right into your ear every month. And undoubtedly, you will get more back than the small amount of money that you pay every month. And if you don't say, David, you know, I didn't give value of this. I'll give you a refund. It's impossible that that would happen. So if you haven't done it, I know some people are like, oh, it's kind of a pain in the ass. I promise you, the company I used glow, they made it all. The only thing better than the way they did it is if Apple did it themselves. And Apple's not going to do it themselves. So they did it beautifully. Like they use it. It's almost like you're paying for an app on your iPhone, which you've probably done a million times. I've actually talked to the founders at Glow. Two separate times for over an hour each. Just because I've tested every single other like podcast product. And this one was by far the best. And they just have their shit together over there. They design a beautiful, beautiful, beautiful product. And they make it so super easy to have a private podcast feed to listen to, you know, because some people sell private podcast feed and then you have to listen to a browser. That's not ideal. I understand that. I think all audio, literally all audio is better in a podcast feed. So even if they had like a, like people do YouTube videos that some people only listen to, I think at least for me the experience of listening to audio in a podcast player is the single best experience. So that's the experience that you get. I would very much appreciate if you support the podcast. But if you're going to buy the books, and I know a lot of people have sent me messages that, you know, they've bought a lot of books. They haven't used the link and they're going to use it in the future. Listen, it's really more important to me that you buy the books and read than it is. They use the link. But at the same time, if you're going to buy the book, why not just click the link and benefit the podcast at the same time? What else? What am I doing next week? Oh, and if you go to Amazon.com. Forge.com. Forge.com. Forge.com. Usually I pick the book that I'm doing that week up there. So you can kind of have like a sneak, it's a way to have like a sneak preview of what I'm working on. I'm not sure which one I'm going to do. I have like 30 or 30 to 50 books to choose from. So I can't tell you that. Unfortunately, I don't know why I brought that up. Other thing is, actually, that's it. I've talked enough. Please sign up, become a misfit. Tell your friends about the podcast, and I'll talk to you next week.