Business Book Review: Poor Charlie’s Almanack by Charlie T Munger
A carefully curated insight into the mindset of one of the most iconic investors of our generation, who shared what he learned to pave the way for others to succeed.
My Rating: ★★★★
Length: 350 pages
Publisher: Stripe Press
Released: 2024 (first published 2005)
Key Takeaways for Personal Branding
Poor Charlie’s Almanack, by Charlie T Munger, shares the wisdom of the legend who worked alongside Warren Buffett for decades. Munger, who was the iconic vice-chairman of Berkshire Hathaway, was the more privately inclined of the famous duo. But the book presents a collection of 11 of his talks from 1986 to 2007, along with his reflections on each. What still resonated, and what he would have done differently.
It’s a brilliant insight into the inner workings of one of the most iconic investors of our era.
Multiple mental models
Multiple mental models are an underlying theme across the Almanack. Munger relies on the mindset for his business analysis processes. He doesn’t rely on a rudimentary system like most investors. Instead of making superficial assessments, he evaluates the whole ecosystem in which a business operates - he calls the tool he uses for this his multiple mental models. It draws in multiple disciplines such as history, psychology, physiology, mathematics, engineering, biology, physics, chemistry, statistics, economics and more.
Munger’s philosophy is that multiple models shape a system, so multiple models should be used to understand that system.
He says:
“It’s kind of fun to sit there and outthink people who are way smarter than you are because you’ve trained yourself to be more objective and more multidisciplinary. Furthermore, there is a lot of money in it, as I can testify from my own personal experience.”
This is complemented by the theme of engaging in lifelong learning:
“Spend each day trying to be a little wiser than you were when you woke up.”
Advice for young people
Munger’s advice to young people for what to look for in a career is simple. Though he admits, meeting all three can be nearly impossible, but that doesn’t mean you shouldn’t try:
Don’t sell anything you wouldn’t buy yourself.
Don’t work for anyone you don’t respect and admire.
Work only with people you enjoy.
He notes he was lucky to, with Buffett, have experienced all three.
Favourite Quotes
“Charles T. Munger, who, in his own words, would tell you: “Acquire worldly wisdom and adjust your behavior accordingly. If your new behaviour gives you a little temporary unpopularity with your peer group … then to hell with them.”
"All investment evaluations should begin by measuring risk, especially reputational.”
“Develop into a lifelong self-learner through voracious reading; cultivate curiosity and strive to become a little wiser every day.”
“Mimicking the herd invites regression to the mean (merely average performance).”
“Remember that just because other people agree or disagree with you doesn’t make you right or wrong—the only thing that matters is the correctness of your analysis and judgment.”
“Be fearful when others are greedy and greedy when others are fearful.”
“Resist the natural human bias to act. “Compound interest is the eighth wonder of the world” (Einstein); never interrupt it unnecessarily.”
“What are the core ideas that helped me? Well, luckily I had the idea at a very early age that the safest way to try to get what you want is to try to deserve what you want. It’s such a simple idea. It’s the golden rule. You want to deliver to the world what you would buy if you were on the other end.”
Poor Charlie's Almanack by Charlie T Munger: Available on Amazon.
