Warren Buffett on Charlie Munger’s Genius: Psychology, Wisdom & Investing | Berkshire 2024

[Transcript]

WARREN BUFFETT: There’s one thing that I should mention that really is terribly interesting about Charlie. Charlie knew the importance of psychology and human behavior and incentives and all of that. He figured that out very early.

And, of course, he gave some talks even on, you know, 25 or so ways, whatever happened to be. I don't remember the exact number, but the different ways the one person could take advantage of another by understanding how humans behave. And then after doing a magnificent job of explaining it.

He believed in understanding what others would do, but he thought it was beneath him to actually use those methods to manipulate people. Really interesting human being that thinks through the psychology of human behavior and figures out, you know, how you become a great insurance salesman or manager on Wall Street, or accumulate of assets under management or whatever it may be.

And you get very rich by understanding the weaknesses of others to some extent, and then decide that it's very important for you to recognize these when they occur. It's very important for you to know them better than the person that actually is using them but not — but you don't have to stoop to using them yourself.

And Charlie told me that in his lifetime after he figured this out, there were a couple of times when he used them. He wasn’t proud of it, but he also never lied to me. So he explained to me that, you know, there were a couple of times when he used some of these techniques, but he didn’t plan on using them anymore.

But he also wanted me to know that if I ever did something like that, I wasn’t really behaving terribly, that he allowed for the fact that humans may misbehave. So I’m sure that I behaved somewhat better before my marriage and I did afterwards in my enthusiasm for different activities, like dancing or something.

And he said that, “You know, we all do it, but don’t do it again.” (Laughter) So that’s part of acquiring human wisdom.

And speaking of human wisdom, we’ve just got that one book out there by Charlie, I mean, Poor Charlie’s Almanack, and that’s worth reading three or four times.

I think I read Ben Graham's book about five or six times. And each time I read it, I realized that I just needed to think a little more deeply about certain things. They weren't complicated or anything.

But, you know, it's better to — if you've got some great instruction, like you get with Charlie, it’s better to read it several times than to just figure you’ll just read every book once that's in the library.

Source: https://buffett.cnbc.com/2024-berkshire-hathaway-annual-meeting/

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