AUDIENCE MEMBER 00:08
CHARLIE MUNGER 00:09
AUDIENCE MEMBER 00:10
You talked about identifying your circle of competence and trying to expand it. I’m at a point in my life where I'm wondering what my circle of competence is, so I would like to know how you found yours?
CHARLIE MUNGER 00:22
I didn't catch that either.
AUDIENCE MEMBER 00:26
You talk about your circle of competence and you should stick to it and try to expand it.
CHARLIE MUNGER 00:31
Oh yeah, well. It’s a hugely important thing, knowing the edge. It’s hardly a competence if you don’t know the edge of it.
You know, if you have a misapprehension regarding your own competency that means you lack competence, you’re going to make terrible mistakes. I think you’ve got to constantly measure what you achieve against other people of achievement, and you have to keep being determinedly rational, and avoiding a lot of self-delusion.
But after a lifetime of observing it, I think the tendency to be pretty rational about one’s own competency is largely genetic. I think people like Warren and I were just born this way. Now it took a lot of education. But I think we were born with the right temperament to do what we did. And I have no way of taking you back and rebirthing you.
AUDIENCE MEMBER 01:40
Why is there so little health care in Berkshire portfolio. And I mean, isn't there something that – could you comment on that?
CHARLIE MUNGER 01:49
I think we don’t understand it well enough and we don’t like a lot that we do understand. Those are two pretty good reasons for not investing.
Reasons for not investing:
1. Don't understand well enough.
2. Don't like it.