A podcaster recently shared his meeting experience Charlie Munger and dining with the legendary investor and former vice chairman of Berkshire Hathaway (NYSE:BRK)(NYSE:BRK).
Here is the most valuable advice and insights from that meeting.
What happened: Munger and investment icon Warren Buffett had a long-lasting friendship, which continues to influence Berkshire Hathaway’s success. With Munger’s recent passing, his legacy and passion for surrounding himself with exceptional people continues to shape the company. Without their chance meeting, Berkshire Hathaway might have taken a completely different path.
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David Senrathe Founders Podcast host, reads the biography of an entrepreneur every week and breaks it down as an episode on the podcast.
For one of the recent podcasts, Senra shared his thoughts on the book “Tao of Charlie Munger: A Compilation of Quotes from Berkshire Hathaway’s Vice Chairman on Life, Business, and the Pursuit of Wealth” David Clark.
In the podcast episode, Senra combines quotes and thoughts from the book with real-life answers he received during a dinner he had with Munger.
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“I had dinner with Charlie Munger. I spent more than three hours with him. I saw his library. I could ask him any question I wanted,” Senra tweeted.
While Senra shared several of Munger’s quotes in the book and some he heard from Munger at dinner, he pinpointed one that had the biggest impact.
“The most important lesson I learned from him that night was: GO FOR GREAT.”
Senra said Munger’s quote boils down to a combination of four simple ideas:
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1. Charlie looks at everything through the lens of history. Human nature does not change. The same behavior repeats forever.
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2. Problems are to be expected from time to time. This is an inescapable part of life.
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3. Wise people don’t whine about problems. They prevent them. “Wisdom is prevention.”
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4. Great companies are rare. Great people are also rare. Great people and great companies cause fewer problems.
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Why it’s important: In the podcast, Senra adds that a big part of people’s lives is searching for their goals, and they often don’t get to where they need to be until later in life.
“Your mission in life is to get into a great company (and stay there) and build relationships with great people. If you do that, you will avoid most of the problems that are within your control. Go for Great,” said Senra about Munger’s four steps.
The podcaster said most people have to start more than one business to achieve their goal, including Munger.
“Munger was in his 40s before he was doing full-time what he was put on earth to do.”
Munger became vice chairman of Berkshire Hathaway in 1978 and subsequently became Buffett’s right-hand man. The position came after a meeting between Buffett, Munger and two friends that led to the two connecting about stocks.
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As a teenager, Munger had happened to work at Buffett & Son, a supermarket owned by Buffett’s grandfather.
With Munger on board, Buffett changed some of his investing principles, including are concerns about diversification. Munger managed to persuade Buffett not to limit himself to the teachings of Benjamin Graham.
“Buy great companies at fair prices,” Munger told Buffett.
The concept was to buy companies that throw away a lot of money, and then use the money to invest in and buy other companies. With Munger helping with investments, Buffett was convinced to invest Coca-cola (NYSE:KO), a decision he might never have made without Munger’s influence.
Going for the right thing and surrounding himself with great people has helped Buffett and Berkshire Hathaway immensely, and is one of the most important pieces of advice he learned from Munger along the way.
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This article, Charlie Munger’s Three-Word Rule That Could Help Warren Buffett, originally appeared on Benzinga.com
