Poor Charlie's Almanack

Not to be confused with Ben Franklin’s Poor Richard’s Almanack, this work is Charlie Munger’s lifelong collection of knowledge. Munger is the vice chairman at Berkshire Hathaway, and often hides from the spotlight that usually falls upon his partner Buffett. There are ten talks the Munger made that compose the bulk of the content, and they showcase the full capability of Munger’s razor wit and kaleidoscopic, multidisciplinary approach to almost everything in life. Munger is fiercely practical, and as such he advocates for sticking to sound fundamentals and applying knowledge to the real world. The book is so much more than a business or investing book, and I’ve learned a great amount of practical and actionable lessons to apply to my worldview and life.

The most important point I got from the book was Munger’s insight on practical behavioral psychology. Munger has such an understanding on the behavioral psychology that drives people to interesting decisions. Munger’s psychology is grounded in pragmatism following Ben Franklin’s famous words “if you would persuade, appeal to interest and not to reason”. The work made me reflect and realize that to understand people’s actions, we must recognize the incentives at play and how agents respond to these incentives; these two factors can give a great picture to how the world will turn out since the interaction between human interests drives all human affairs. Granted, there doesn’t seem to be room for morals and ethics, but Munger makes a convincing point that high moral standards are the best teleological policy because they produce the best and most stable results in the long term. I’ve come to love this view because it is sufficiently realistic but also not so bleak as to be unpalatable.