Munger, for those of you who haven’t heard of him, is the irreverent partner of Warren Buffett at Berkshire Hathaway. He’s offered us such gems as: a two step process for making effective decisions and the work required to have an opinion.
And this talk on The Psychology of Human Misjudgment is one of his best you’ll ever hear.
My nature makes me incline toward diagnosing and talking about errors in conventional wisdom. And despite years of being smoothed out by the hard knocks that were inevitable for one with my attitude, I don’t believe life ever knocked all the brashness out of the man.
… I have fallen in love with my way of laying out psychology because it has been so useful to me. And so, before I die, I want to imitate to some extent the bequest practices of three characters: the protagonist in John Bunyan’s Pilgram’s Progress, Benjamin Franklin, and my first employer, Ernest Buffett.
Charlie made extensive revisions to The Psychology of Human Misjudgment in Poor Charlie’s Almanack because he “thought he could do better at eighty-one than he did more than ten years earlier when he (1) knew less and was more harried by a crowded life and (2) was speaking from rough notes instead of revising transcripts.”
Still curious? Read a transcript of The Psychology of Human Misjudgment. Munger gives his thoughts at Caltech in 2008 during the financial crisis and The University of Michigan in 2010. And, if you haven’t already, buy a copy of Poor Charlie’s Almanack.