《Poor Charlie’s Almanack》是芒格向他的偶像美国开国元勋富兰克林所著《Poor Richard’s Almanack》的致敬。
lifelong learning, intellectual curiosity, sobriety, avoidance of envy and resentment, reliability, learning from the mistakes of others, perseverance, objectivity, willingness to test one’s own beliefs, and many more.
Charlie’s grandfather was a respected federal judge, and his father followed in his footsteps to become a prosperous lawyer.
Charlie learned that, by supporting each other, the Mungers weathered the worst economic collapse in the nation’s history.
Next he was shuffled to the prestigious California Institute of Technology in Pasadena, California. He was schooled in thermodynamics and the science of meteorology-then essential to fliers-and trained to become a meteorologist. After completing his studies at Caltech, Charlie was dispatched to a permanent duty station in Nome, Alaska.
Nevertheless, using the GI Bill, he applied to Harvard Law School where his father had preceded him. His lack of an undergraduate degree threatened to derail him, but a family friend, former Harvard Law School Dean Roscoe Pound, interceded on Charlie’s behalf.
I mean, there is honesty and integrity, and always doing more than his share and not complaining about what the other person does.
The most celebrated passage in de Sertare is probably the following grand summary: “The best Armour of Old Age is a well spent life preceding it; a Life employed in the Pursuit of useful Knowledge, in honorable Actions and the Practice of Virtue; in which he who labors to improve himself from his Youth, will in Age reap the happiest Fruits of them; not only because these never leave a Man, nor even in the extremist [sic] Old Age; but because a Conscience bearing Witness that our Life was well-spent, together with the Remembrance of past good Actions, yields an unspeakable Comfort to the Soul.”
Franklin was noted for his curiosity, ingenuity and diversity of interests. He continued his career of inventing, writing, and statesmanship and more into old age, developing a phonetic alphabet at age 62. Five years later, he published two of his most celebrated pro-American satirical essays: “Rules by Which a Great Empire May Be Reduced to a Small One,” and “An Edict by the King of Prussia.” In 1776 at age 70, Franklin assisted in writing the Declaration of Independence, radically editing Jefferson draft. later that year, he was dispatched to France as commissioner for the United States and remained there until 1785. After his return, Franklin became an abolitionist, freeing both of his slaves and eventually becoming president of The Society for the Relief of Free Negroes Unlawfully Held in Bondage. At age 81, Franklin served as delegate to the 1787 meetings that would produce the United States Constitution to replace the Articles of Confederation. He is the only Founding Father who is a signatory of all three of the major documents of the founding of the United States: the Declaration of Independence, the Treaty of Paris and the United States Constitution. On April 17,1790, he died in his Philadelphia home at age 92,leaving his famous autobiography unfinished. Carried only up to the year 1757 , it omitted many of the achievements for which he is best remembered.
1. Do the job right the first time.
2. Be responsible.
To Charlie, successful investing is simply a byproduct of his carefully organized and focused approach to life.
You must know the big ideas in the big disciplines and use them routinely-all of them, not just a few. Most people are trained in one model-economics, for example-and try to solve all problems in one way. You know the old saying: ‘To the man with a hammer, the world looks like a nail.’ This is a dumb way of handling problems.
Charlie calls it “sit on your ass investing” and cites its benefits: “You’re paying less to brokers, you’re listening to less nonsense, and if it works, the tax system gives you an extra one, two, or three percentage points per annum.” In his view, a portfolio of three companies is plenty of diversification.
Accordingly, Charlie is willing to commit uncommonly high percentages of his investment capital to individual “focused” opportunities.
As a securities investor, you can watch all sorts of business propositions in the form of security prices thrown at you all the time. For the most part, you don’t have to do a thing other than be amused. Once in a while, you will find a ‘fat pitch that is slow, straight, and right in the middle of your sweet spot. Then you swing hard. This way, no matter what natural ability you start with, you will substantially increase your hitting average. One common problem for investors is that they tend to swing too often.
“‘When Warren lectures at business school, be says, ‘I could improve your ultimate financial welfare by giving you a ticket with only 20 slots in it so that you had 20 punches representing all the investments that you get to make in a lifetime and once you had punched through the card you could not make any more investments at all under those rules you would really think carefully about what you did and you would be forced to load up on what you would really thought about. So you’d do so much better”
Graham cautioned the investor to carefully use his own, unemotional judgment of value instead of relying on the often manic-depressive behavior of the financial markets.
“personally I had gotten so that I now use a kind of to track analysis first what are the factors that really govern the interest involved rationally considers? And second, what are the subconscious influences where the brain at subconscious level is automatically forming conclusions in various ways which, by and large comma are useful but which open malfunction? When approaches rationality the way you would work out a bridge problem by evaluating the real interest the real probabilities and so forth and the other is to evaluate the psychological factors that cause subconscious conclusions many of which are wrong.”
“The number one idea is to view a stock as an ownership of the business and to judge the staying quality of the business in terms of its competitive advantage. Look for more value in terms of discounted future cash-flow than you are paying for. Move only when you have an advantage. its very basic. You have to understand the odds and have the discipline to bet only when the odds are in your favor. ‘We just keep our heads down and handle the headwinds and tailwinds as best we can, and take the result after a period of years”
Identifying Your Circle of Competence
That a great business at a fair price is superior to affair business at a great price
Charlie refers to a company’s competitive advantage as its “moat”: the virtual physical barrier it presents against incursions. Superior companies have deep moats that are continuously widened to provide enduring protection.
This habit of committing far more time to learning and thinking than to doing is no accident. It is the blend of discipline and patience exhibited by true masters of a craft: an uncompromising commitment to “properly playing the hand.”
Price is What You Pay, Value is What You Get
‘All intelligent investing is a value investing acquiring more than you are paying for You must value the business in order to value the stock.”
“People always want a formula-but it doesn’t work that way. You have to estimate total cash generated from now to eternity, and discount it back to today. Yardsticks such as P/Es are not enough by themselves.” -Buffett
## An Investing Principles Checklist
风险-Risk-All investment evaluations should begin by measuring risk, especially reputational
1. Incorporate an appropriate margin of safety安全边际
2. Avoid dealing with people of questionable character
3. Insist upon proper compensation for risk assumed
4. Always beware of inflation and interest rate exposures.
5. Avoid big mistakes; shun permanent capital loss
独立-Independence-“Only in fairy tales are emperors told they are naked”
1. Objectivity and rationality require independence of thought
2. 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
3. Mimicking the herd invites regression to the mean (merely average performance)
准备-Preparation – the only way to win is to work, work, work, work, and hope to have a few insights
1. Develop into a lifelong self-learner through voracious reading; cultivate curiosity and strive to become a little wiser every day
2. More important than the will to win is the will to prepare .
3. Develop fluency in mental models from the major academic disciplines .
4. If you want to get smart, the question you have to keep asking is “why, why, why?”
谦虚-Intellectual humility-Acknowledging what you don’t know is the dawning of wisdom
1. Stay within a well-defined circle of competence能力圈.
2. Identify and reconcile disconfirming evidence
3. Resist the craving for false precision, false certainties, etc’
4. Above all, never fool yourself, and remember that you are the easiest person to fool
分析-Analytic rigor-Use of the scientific method and effective checklists minimizes errors and omissions.
1. Determine value apart from price; progress apart from activity; wealth apart from size.
2. It is better to remember the obvious than to grasp the esoteric Be a business analyst, not a market, macroeconomic, or security analyst
3. Consider totality of risk and effect; look always at potential second order and higher level impacts.
4. Think forwards and backwards-Invert, always invert
配置-Allocation-Proper allocation of capital is an investor’s number one job
1. Remember that highest and best use is always measured by the next best use (opportunity cost) 机会成本
2. Good ideas are rare-when the odds are greatly in your favor, bet (allocate) heavily
3. Don’t “fall in love” with an investment-be situation-dependent and opportunity-driven
耐心-Patience-Resist the natural human bias to act
1. “Compound interest is the eighth wonder of the world” 复利(Einstein); never interrupt it unnecessarily
2. Avoid unnecessary transactional taxes and frictional costs; never take action for its own sake
3. Be alert for the arrival of luck
4. Enjoy the process along with the proceeds, because the process is where you live
决断力-Decisiveness-When proper circumstances present themselves, act with decisiveness and conviction
1. Be fearful when others are greedy, and greedy when others are fearful
2. Opportunity doesn’t come often, so seize it when it does
3. Opportunity meeting the prepared mind: that’s the game
应变-Change-Live with change and accept unremovable complexity
1. Recognize and adapt to the true nature of the world around you; don’t expect it to adapt to you
2. Continually challenge and willingly amend your “best-loved ideas”
3. Recognize reality even when you don’t like it-especially when you don’t like it
聚焦-Focus-Keep things simple and remember what you set out to do o
1. Remember that reputation and integrity are your most valuable assets and can be lost in a heartbeat
2. Guard against the effects of hubris and boredom
3. Don’t overlook the obvious by drowning in minutiae
4. Be careful to exclude unneeded information or slop: “A small leak can sink a great ship”
5. Face your big troubles; don’t sweep them under the rug
Preparation. Discipline. Patience. Decisiveness.
” we are partial to putting out large amounts of money where we won’t have to make another decision if you buy something because it’s undervalued then you have to think about selling it when it approaches your calculation of intrinsic value that’s hard but if you can buy a few great companies then you can sit on your ass that’s a good thing.”