Video Link: https://youtu.be/R5I04HmUDBE
In this episode, Charlie Munger talks about one of the great tricks in life and what does he mean?
In this episode, you’ll learn:
What is one of the great tricks in life?
Charlie Munger's example on destroy your own best-loved ideas.
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CHARLIE MUNGER 00:00
Yeah, one of the great tricks in life is to destroy your own best-loved ideas. And that I worked at, I actually go through my best-loved ideas occasionally, see if I could weed one out.
JACK DANGERMOND 00:14
What are you talking about? Give me an example.
CHARLIE MUNGER 00:20
Oh I give you an example, it's a hard one. We had an executive at Berkshire who was a wonderful human being and terribly good at what he does, he was an actuary. And he was a member of our inner council and he was with us, we knew his wife and children, and we love the guy and he got a nasty cancer and was dying slowly. And we just left him there, dying and failing.
And the reinsurance contracts he signed during those last two or three weeks were awful. It was a mistake and I've never done it again.
Yeah, it's natural to love your friend so much, it's hard to come down on a close friend. And –
JACK DANGERMOND 01:10
It's in your rules, how can you break – like getting up on the same side of the bed every morning, when you believe in something, like you obviously are expressing a couple things to me, one is that you love this guy and you didn't want to just shut him down so you kept him in place and he screwed up. Is that the basic message?
CHARLIE MUNGER 01:32
Yeah, I had a hired duty and it was – I think it's a forgivable sin. You know, I'd rather have – if I'm going to have sins, I'd rather have this one than a lot of others. But, it was mistake.
JACK DANGERMOND 01:45
CHARLIE MUNGER 01:46
It was a mistake...
JACK DANGERMOND 01:47
Or maybe not.
CHARLIE MUNGER 01:48
And – you know what that happened to Lee Kuan Yew, this guy I admire, ran Singapore for so many decades.
And his best friend had committed some moral act and immoral act, and it had come to life, and he committed suicide. And the wife came to – and close friends and said – you know, in Chinese culture, it's a deep shame to commit suicide. Can't we cover up the suicide?
He said, no, we can't cover up the suicide. Again, he was just tougher on maintaining certain standards. I don't know whether that's right or not, but I suspect he was right after all, he built an empire. He built a whole nation and all I do is build one wallet.