Charlie Munger has been the ketchup to Warren Buffett's mustard for more than 50 years.
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Berkshire Hathaway co-chairman Charlie Munger is well known for his sharp, funny, and sometimes abrasive responses to shareholder questions at the company's annual meeting. This year's meeting, the 50th under "current management," was no exception. Over the several hours that Munger and CEO Warren Buffett spent fielding questions, we were lucky to get plenty of pithy wisdom from Munger.
Here are the 14 quotes that stood out the most.
1. Night sweats and misery
One shareholder asked for the company to fund a stock-shorting arm that he would run. Munger's reply:
We would never trade money for misery.
Later, another attendee asked about Berkshire's never having used leverage -- i.e., using debt to buy stocks. Munger responded:
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It's obviously true. If we'd used the leverage that some others did, Berkshire would have been much bigger ... but we would have been sweating at night. It's crazy to sweat at night.
2. Just because someone is listening doesn't mean you're right
Longtime journalist and Buffett profiler Carol Loomis asked about the chairmen's thoughts on the risk of inflation and the potential impacts on Berkshire's subsidiaries. Munger pointed out that nobody has found a way to consistently predict these things, and that most prognosticators are answering simply because someone's asking, not because they actually know anything.
We have made very little progress by trying to outguess macroeconomic indicators. We've just abdicated. We're letting the tide look after itself. ... The trouble with making all of these economic pronouncements is that people get to thinking they know something.
3. Risk in finance, regulations, and being better than your competitors
There's too much risk in finance. The idea that Dodd-Frank has removed it all is nonsense. Trading derivatives, if you're shrewd, is like running a gambling operation in the past, and arguing that it's helping the economy by spreading risk. It's nonsense. ... Our competitors don't like it that they deserve regulation and we don't.
4. On the luck of timing, and why the U.S. needs more ties withChina
We've been lucky, too. I think I've lived in the most ideal era in history. I don't think we should get too smug. China has come up faster than any other nation in history. ... I can't think of anything more important than close collaboration between China and the U.S. We need to work together to avoid conflict that comes from others' mistakes. [We should] collaborate to build trust. There's nothing more important we can do.
5. Focusing on questions worth answering
When Buffett asked Munger whether he would rather be born now, instead of when he was actually born, Munger gave a pragmatic response:
It's very interesting now, but it's always been interesting. I don't like theoretical questions like this. I'd rather think about questions where I can either gain an advantage or help someone else gain an advantage.
6. Building your reputation
Hardly anything is more important than behaving well as you go through life. We actually try to behave better as we're more prosperous.
7. Influencing people starts in the mirror
A young shareholder -- a seventh-grader -- asked, "How do you make lots of friends, and get people to like you and work with you?"
Buffett answered first, but Munger chimed in:
Like in marriage, change yourself instead of trying to change your spouse.
8. Waiting for something to happen
Buffett was asked about the slow recovery of home construction that has affected several Berkshire subsidiaries, as well as his past comments that kids would get sick of living in their parents' homes. So far, that trend hasn't really changed, even as the job market has improved. Munger said this as a follow-up to Buffett's response:
I feel exactly the same way. I think I speak for many members in the audience when I say that I have some grandchildren who should probably marry someone suitable promptly. I don't think it's healthy for these people to be hanging around waiting for something.
9. Charity starts at home -- not at the office
Both Buffett and Munger have plans to give away the vast majority of their collective wealth and have already donated billions. While in the past Berkshire has had a philanthropy program that donated based on shareholder choices, neither man thinks executives have any business giving away shareholder capital to charities. Munger was characteristically succinct on the subject:
My taste for giving away someone else's money is also quite restrained.
10. On bad business partners and offending nations
Munger made his most clear-cut statement, potentially insulting more than one country in the process, in response to a question about the future of the eurozone and whether certain countries should consider leaving the union:
I think the euro had a noble motivation and had promise of doing a lot of good, and undoubtedly it has. But it's a flawed system to put countries that are so different together. It's caused strains, especially in Greece and France. They've got countries in there that shouldn't be in there. You can't form a business partnership with your shirtless, drunken brother-in-law.
Buffett responded but gave Munger a chance to say more on the matter before moving on to the next question. Munger's response:
I think I've offended enough people.
11. The power of positive thinking
Financial journalist Andrew Ross Sorkin began to ask a question about the future of Berkshire: "At some point, Charlie Munger and Warren Buffett won't be here to manage the store."
Munger, who is probably tired of media outlets pointing out that he and Buffett are going to die, cut him off:
I reject such defeatism.
That's probably my favorite quip of the day.
12. The best way to gain wisdom
We made some of our luck by being curious and seeking out wisdom. I would recommend that to anyone else. Nothing brings wisdom more thoroughly than getting your nose whacked. We got a fair amount of that.
13. Ignorance is a sin
I do think rationality is a moral duty. That's why I like Confucius. What's really admired around Berkshire is someone who sees it the way it really is. That's the way I did it. That goes beyond a technique for wealth. For me it's a moral principle. It's dishonorable to stay stupider than you have to be. That's my ethos. You have to be generous, because it's crazy not to be.
14. There's more to life than money
I don't like being too much of an example for people who just want to make money. If you wrest a fortune from life by buying little pieces of paper, I don't think that's enough. I never consider it enough of a life to merely be shrewd at picking stocks. If you're good at just investing your own money, I hope you'll be good at something more.
Charlie Munger has lived a rather remarkable 91 years, and he's still sharp as ever. You would do well to heed his advice on both investing and life.
The article Don't Miss These 14 Things Charlie Munger Said at the Berkshire Meeting originally appeared on Fool.com.
Jason Hall owns shares of Berkshire Hathaway. The Motley Fool recommends Berkshire Hathaway. The Motley Fool owns shares of Berkshire Hathaway. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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