Charlie Munger | Wall Street’s Locker Room Culture Does Enormous Damage

Charlie Munger is clearly one of the smartest investors on the planet.

One of my favorite Munger interviews was one he did with the BBC (below).

My favorite Munger quote from this interview is:

“If you’re not willing to react with equanimity to a market price decline of 50% two or three times a century, you’re not fit to be a common shareholder and you deserve the mediocre result you’re going to get. Compared to the people who do have the temperament who can… be more philosophical about these market fluctuations.”

Investment Checklist

Munger also provides the checklist that he and Buffett use for picking great stocks:

We have to deal in things that we’re capable of understanding
And then, once we’re over that filter, we have to have a business with some intrinsic characteristics that give it a durable competitive advantage
Then of course, we would vastly prefer a management in place with a lot of integrity and talent
And finally, no matter how wonderful it is, it’s not worth an infinite price. So we have to have a price that makes sense and gives a margin of safety, considering the natural vicissitudes of life

Why professional classes don’t teach their very simple stock picking philosophy

“That’s a very simple set of ideas… and the reason our ideas have not spread faster is they’re too simple. The professional classes can’t justify their existence if that’s all they have to say. It’s all so obvious and so simple, what would they have to do with the rest of the semester?”

Wall Street’s locker room culture does enormous damage

“Wall Street attracts and rewards what I call a locker room culture full of people that just have to win… They do enormous damage to the rest of us with their damn locker room culture that has to win…”

This is a much watch for all investors.