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people who are making a lot of money tend to think it is because they are smart, not because they are taking a lot of risk.50
Buffett’s first group of partners had reaped $1.1 million for each $1,000 put into the partnership!
Wall Street is the only place people ride to in a Rolls-Royce to get advice from people who take the subway.”
“If the phone don’t ring you’ll know it’s me,”
early summer of 1998, lenders collectively began to realize that, as periodically happens, they had gotten too euphoric about the prospects that all these people to whom they had lent money would pay them back.
“Derivatives are like sex,” Buffett said. “It’s not who we’re sleeping with, it’s who they’re sleeping with that’s the problem.”
Repealing the estate tax would be like choosing the nation’s Olympic teams from the children of past Olympic champions,
But the idea of a board of directors overseeing Warren Buffett was ludicrous. A board made up of Barbie dolls would do just as well.
Munger’s favorite construct was to invoke Carl Jacobi: “Invert, always invert.” Turn a situation or problem upside down. Look at it backward. What’s in it for the other guy? What happens if all our plans go wrong? Where don’t we want to go, and how do you get there? Instead of looking for success, make a list of how to fail instead—through sloth, envy, resentment, self-pity, entitlement, all the mental habits of self-defeat. Avoid these qualities and you will succeed. Tell me where I’m going to die, that is, so I don’t go there.
Wise.
Berkshire therefore ended the year with $43 billion of cash equivalents, not a happy position.”
them—such as a seven-year-old girl who sent the Gates Foundation her life savings of $35.
Warren Buffett, the not-simple man of simple tastes, now had the simple life of the man that he had always believed himself to be. He had one wife, drove one car, occupied one house that hadn’t been redecorated in years, ran one business, and spent more and more time with his family.25
Stocks are the things to own over time. Productivity will increase and stocks will increase with it. There are only a few things you can do wrong. One is to buy or sell at the wrong time. Paying high fees is the other way to get killed. The best way to avoid both of these is to buy a low-cost index fund, and buy it over time. Be greedy when others are fearful, and fearful when others are greedy, but don’t think you can outsmart the market.
the “how” mattered more than the “how much.”
