Munger's point of view is always fresh.

For example, in this article, he said, "The so-called common sense is common sense that ordinary people don't have."

When we talk about common sense, we always think that it is easy to have common sense. In fact, unless you are gifted, you need to master a lot of knowledge first, and then you should be diligent in thinking. It is not enough to have these two points, it also requires us to have courage, because sometimes things will deviate far from common sense.

This is vividly reflected in the stock market. Sometimes, the stock price deviates far from its value. At this time, it is particularly necessary to be determined. "Fear when others are greedy, and be greedy when others are afraid."

There are many similar insights. Here, I wish you a rewarding reading.

1

Common sense: Common sense that ordinary people don't have

Berkshire Hathaway can achieve great success, and the DailyJournal can make small achievements. There is no secret, that is, pursuing basic morality and sound common sense.

as we all know, common sense is common sense that ordinary people don't have. When we say that someone has common sense, we actually mean that he has common sense that ordinary people don't have. People think it's easy to have common sense, but it's actually very difficult.

let me give you an example. A large number of people with high IQ have entered the investment field and tried their best to do better than ordinary people. Many people with high IQ flocked to the investment field, forming a rare scene elsewhere, so strange things happened. There used to be a very large investment consulting company in California, and in order to surpass other peers, it came up with an idea.

They think so: We have so many young talents, all of whom are high flyers who graduated from Wharton, Harvard and other famous schools. They all work hard to understand the company, market trends and everything. As long as each of these young talents comes up with the best investment opportunity, we will pool all the best opportunities to form a portfolio, and we will certainly be far ahead of the index.

people in this investment company can think that this idea works because they have received too little education. They put it into action with confidence, and the result was a complete failure without any suspense. They tried again and failed miserably. They tried for the third time and still failed.

hundreds of years ago, alchemists fantasized about turning lead into gold. The alchemists thought beautifully. They thought that they would make a fortune by buying a lot of lead, casting magic and turning lead into gold. The investment company just mentioned is no better than the alchemist hundreds of years ago. It just wants to turn lead into a modern replica of gold, and it can't be done at all. I could have told them this truth, but they didn't ask me.

It is worth pondering that this investment company has concentrated elites from all over the world, even including many highly intelligent elites from China. The average IQ of China people is slightly higher than that of people from other countries. In fact, this question is very simple. This idea seems to work, but why doesn't it work in practice? You might as well think for yourself why this is so.

You are all educated in higher education institutions. I dare say that few people here can really explain this clearly. I want to teach you a lesson. How can you not know? Investment is an important industry in America. In such an important industry, there has been such a heavy failure, we should be able to give an explanation!

The person who can answer this question must have listened attentively in the first-year class. Regrettably, even if you take this question to the finance department of an institution of higher learning and let the professors there answer it, they will not answer it correctly. I leave this question to you to think about, because I want to confuse you.

I moved on to the next topic. Actually, you should be able to answer this question. From this question, we can see that even some very simple things, it is particularly difficult to remain rational. People have too many wrong ideas, which are impossible to work. Why people's wrong ideas don't work, but you can't tell them.

if you have received a good education, you should be able to see through it at a glance. By "receiving a good education", I mean knowing when the professor is wrong and what is right. Anyone can do whatever the professor says. The key is that you should distinguish what the professor said, which is right and which is wrong. This is the person who has received a good education.

2

It's enough to seize a few opportunities in your life!

Back in the investment field, at least for a long time to come, if you take the initiative to pick stocks and want to know everything, you still can't win the index.

in Berkshire Hathaway, in the DailyJournal, we have been doing better than the average. The question is coming, how do we do it? How did we do it? The answer is simple. We seek to do less.

We have never been naive to think that we can know everything by bringing in a group of talented young people, whether it is canned soup, aerospace or public utilities, we can know more than others.

we have never been so delusional. We never thought we could do it. No matter what field we are in, we can get really useful information. We don't pretend to know everything. We always know that as long as we study hard, we can find a few opportunities accurately. These few opportunities are enough. We only want to find a few opportunities, and our expectations are more reasonable.

If you are like the investment consulting organization I mentioned earlier, you should ask Warren Buffett the same question: "Tell me your favorite investment opportunity this year." Then, you buy the best investment opportunity that Warren found, and you are sure to make a profit. Warren can't imagine knowing everything. He will only tell you one or two stocks. The investment consulting agency is ambitious, and Warren knows how to restrain himself.

My great grandfather, that is, my mother's grandfather, helped me a lot. My great-grandfather was a pioneer. He came to Iowa penniless, but young and in good health. He took part in the Black Hawk War with the Indians and became a captain in the war. Later, he settled in Iowa. Every time, when there was an opportunity that the land was very cheap, he made a smart move and bought a lot.

In the end, he became the richest man in the town and owned a bank. He is respected, has a big family and lives a very happy life. When he first settled in Iowa, an acre of land was less than one dollar. He has been living in Iowa and witnessed the rise of rich modern civilization in this fertile land. My great-grandfather said that he caught up with a good time and lived to be 9 years old all his life. God can give him several big opportunities.

He lived a long and happy life, mainly because he seized the opportunities that God gave him. Every summer, when the grandchildren are around his knees, my great-grandfather always tells this story over and over again. My mother was not interested in money, but she remembered the story told by my great-grandfather and told it to me. I am different from my mother. I know my great-grandfather did the right thing.

So, when I was very young, I knew that there were only a few great opportunities and opportunities that belonged to me. The key was to prepare myself and seize them when a few opportunities came. Those people in large investment consulting institutions, they don't think so. They think they can understand a million things by studying them.

The key to playing the game of investing well lies in a few opportunities. You can really see that one opportunity is better than others, and you know very well that you know more than others. As I said, it is enough to seize a few opportunities.

Warren often says, "A person who lives in a thriving small town has shares in three of the best companies in this small town. Isn't it enough to be so dispersed?" As long as these three companies are top-notch, they are absolutely dispersed. The widely circulated Kelly formula can tell us how many chips we should bet on each transaction when we have the chance of winning. The greater your chances of winning and the higher your chances of success, the greater your bet should be.

3

Fishing where there are fish! Remember!

the first rule of fishing is to fish where there are fish. The second rule of fishing is to remember the first rule. Many of us have gone to places where cod have been fished out and want to catch cod. In an extremely competitive environment, no matter how hard you try, it's useless. In the field of investment, even a small opportunity is followed.

once, I attended a meeting of the investment committee of the University of Michigan. One of the successful investors at the meeting was from London. How did this investor invest in London? He took a fancy to sub-Saharan Africa. There are few companies listed in sub-Saharan Africa, and only a few bank stocks listed in the pink list market can be found, so he bought these bank stocks, and the amount he could buy was very small.

The poor in Africa gradually changed their habit of keeping money at home. More and more people began to deposit money in the bank, and the investor made more and more money. In the end, he made a lot of money. No one else invests in small banks in Africa, only himself. Unfortunately, this small niche was quickly filled in.

As a fund manager, I invested in small banks in sub-Saharan Africa and made money for my clients. Where can I find the next investment opportunity? Niche filling is fast. Any fund manager in London can buy shares in small African banks. How much profit-making niche do you think is left? It's too difficult.

4

If you follow the right path, the road will get wider and wider

In the modern world where we live, some people specially drag others into the water and teach others about day trading stocks. In my opinion, this is no different from instigating young people to take heroin. Stupid as hell. How can a person who has already made money make a living by instigating others to make a fortune in stock trading?

TV is also a magical place. On TV, we often see people say, "This book in my hand can teach you to earn three times a year. You can get this book by paying the postage." A person, suddenly discovered the secret of earning three times a year, how can he still sell books online? That's ridiculous. The scene I'm talking about is a portrayal of modern business. People do such things every day and think they are citizens who are beneficial to society.

I'll tell you another short story, which is also about modern life. I hope you can get some inspiration from it. This story happened in the past. There was a man who had a good horse. This is a fine horse with light steps and bright hair. This horse has everything except one fault. Sometimes, it suddenly has a bad temper and a stubborn disposition. Anyone riding it at that time would have to be broken by a fall.

The man found a vet and asked the vet, "How to treat this horse?" The vet said, "It's simple. I have an idea." The man said, "Tell me quickly." The vet said, "You sell your horse when it behaves well."

Generally speaking, Warren and I, we have never fooled a fool into taking goods from us in order to make money. We make money by making money when we buy it. If we were selling shit, we wouldn't call it a cure for arthritis.

I think, don't lie, it's better to live like us. In reality, there are always liars. Just say those charlatans, they have many tricks to deceive people. There are always swindlers who take advantage of human weakness to make profits. We must increase our wisdom in order to stay away from all kinds of fraud.

Peter Kaufman (author of Poor Charlie's Collection: Munger's Proverbs of Wisdom) has told me many times: "If liars know how much money they can earn by being honest, they will definitely stop being liars." Warren also said a very classic sentence, he said: "Take the right path, the road gets wider and wider." This statement is true.

5

Slow down, we don't care

Some truths are simple, but they are really useful. DailyJournal is a difficult business, and it is not easy to serve government departments such as courts. Government departments such as courts need automation. Others want to take advantage of the court and other government departments, but we don't. We are just a small company, we have worked hard, and we have gradually occupied many markets.

although the speed is slow, the prospect is bright. The advantage of being rich is that we don't care if we slow down. Then how do we get rich? We remembered my great-grandfather's words, and there were only a few opportunities. When an opportunity came, we rushed to seize it. Think about it, is your life like this?

tell me another personal experience. In the 197s, I made a mistake. I didn't make a proper investment. If we hadn't made this mistake, the Munger family would have been twice as rich as it is now. That mistake I made was stupid. I missed that opportunity, otherwise my assets would be twice as large as now. Life is like this, it is inevitable to miss one or two opportunities.

6

You have to find someone better than yourself

There are always such people around us, and they have found a better partner than themselves. They made a wise decision, which is also a lucky decision. You can't buy a better partner than yourself. Many people inadvertently found a better partner than themselves when they were young.

actually, you don't have to take chances, you can pursue it consciously. Many people have eye-catching labels that say "danger, danger, don't go near", and others are rushing forward. (Laughter at the scene) It shouldn't be. You laugh at each other, which is definitely a mistake with serious consequences.

7

Why can you be happy when you are old like this?