Words to Start the Week (April 29, 2025)
Nuggets from past notes
In anticipation of this year’s Berkshire Hathaway Shareholders Meeting, I’m reflecting on a few special quotes from Warren Buffett and Charlie Munger:
“They’re all hard. But why should it be easy to get rich? In a competitive world, shouldn’t it be impossible for there to be an easy way for everyone to get rich? Of course they’re all hard. The reason we’re not in high-tech businesses is that we have a special lack of aptitude in that area. And yes, a low-tech business can be plenty hard. Just try to open a restaurant and make it succeed.”
- Munger on the difficulties of tech vs. non-tech.
“The world is overwhelmingly short-term focused.”
- Buffett
“It’s very, very important to create human systems that are hard to cheat. Otherwise, you’re ruining your civilization, because these big incentives will create incentive-caused bias and people will rationalize that bad behavior as okay. Then, if someone else does it, now you’ve got at least two psychological principles: incentive-caused bias plus social proof. Not only that but you get Serpico effects: If enough people are profiting in a general social climate of doing wrong, then they’ll turn on you and become dangerous enemies if you try and blow the whistle. It’s very dangerous to ignore these principles and let slop creep in. Powerful psychological forces are at work for evil.”
- Munger on perverse incentives
“The whole secret of investment is to find places where it’s safe and wise to not diversify.”
- Munger
“You can't look around for people to agree with you. You can't look around for people to even know what you're talking about. You have to think for yourself. An ability to detach yourself from the crowd is a quality you need.”
- Buffett
“We love working with people who are just plain nuts about their businesses.”
- Buffett
“The world isn’t driven by greed. It’s driven by envy.”
- Munger
"You only find out who is swimming naked when the tide goes out."
- Buffett
“An economist who forecasts successfully is like a one-eyed man in the land of the blind.”
- Munger
"I will tell you the secret to getting rich. You try to be greedy when others are fearful. And you try to be fearful when others are greedy. And you can't do that by listening to economists."
- Buffett