Charlie munger and the psychology of human misjudgment the. Over the past 50 years we lived through the best time of human history. Good judgement is one of the most important qualities in investing. Aug 01, 2018 tendency toward misjudgment part 2 tendency toward misjudgment in part 1 of this topic we learned about charles charlie t. Otp05 the psychology of human misjudgment 25 cognitive. Charlie munger on human misjudgement a wealth of common. Charlie munger, human misjudgment, buffet, economics, business, berkshire, wall street, psychology warren buffets partner, charlie munger lectures on human misjudgment at harvard law school, 1995. A lesson on elementary, worldly wisdom as it relates to investment management and business page 36 1998 munger on investment practices of leading charitable foundations page 72 1999 mungers masters class on foundation investing. Whitney tilson summarizes some key points and provides a link to the speech, so you can read for yourself.
Although they are longtime friends and partners, munger is hardly a carbon copy of buffett. The psychology of human misjudgment a survey of one. Charlie munger the psychology of human misjudgement 1995. Topics charlie munger, human misjudgment, buffet, economics, business, berkshire, wall street, psychology. The speech was originally published on the indiana university bloomington website. Munger s book, poor charlie s almanack, collects his speeches and musings, including his intriguing thoughts on the 25 tendences that. Jun 26, 2017 in 1995, charlie munger gave a speech about how the human mind tricks itself into making poor decisions. If you are new to the world of charlie munger and mental models then this page is for you. The psychology of human misjudgment 2005 pdf hacker news. While we all use mental models to think, mungers idea is to actively go and learn the big timetested ideas men. Charlie munger and the psychology of human misjudgment. Nov 19, 2007 charlie munger s lollapalooza effect and this credit fiasco. To the man with a hammer, every problem tends to look pretty much like a nail. Charlie munger the psychology of human misjudgment.
In this talk, munger discusses a series of 25 cognitive biases that induce human misjudgment and provides some of his famous mental models to counter this innate behavior. We have provided both the original audio file as well as a pdf transcription. Great speech by charlie munger at usc law commencement may 2007 part 2 of 5. Jun 02, 2014 the audio file below contains the often referred to speech by charlie munger on the psychology of human misjudgment given to an audience at harvard university back in 1995. Charlie munger is warren buffetts right hand man at berkshire hathaway nyse. Munger, vice chairman of berskshire hathaway and partner of warren buffet and his listing of 25 innate human tendencies. Early charlie munger is a horrible career model for the young because not enough was delivered to civilization in return for what was wrested from capitalism.
Jul 18, 20 i came to the psychology of human misjudgment almost against my will. Hes given dozens of talks since, but i dont think any. Charlie munger on human misjudgment the crosshairs. The example munger uses is letting in other drivers on the freeway knowing they will reciprocate in the future. Reviewing mungers the psychology of human misjudgment. Terms in this set 25 reward and punishment superresponse tendency. To save energy and make faster decisions, it relies on cognitive heuristics to make fast judgments. Andrew wilkinson sent me this animated and abridged video of a famous charlie munger speech called the psychology of human misjudgment. Charlie munger s lollapalooza effect and this credit fiasco. I feel that by getting rich in the way i did, i think my own example has hurt my own country. Charlie mungers speech at harvard university circa june 1995 about the framework for decision making and the factors contributing to human misjudgments. Ackman once predicted valeant would be the next berkshire hathaway inc.
Warren buffetts 2009 letter to the shareholders excerpts. How thinking like charlie munger may have saved my life february 9, 20. Everybody knows about warren buffett, but few people outside of the investing world know about his business partner, charlie munger. The power that incentives and disincentives have on the actions of others cannot be overstated. Charlie munger on the psychology of human misjudgment mill. Charlie munger on the psychology of human misjudgment 25iq. Charlie munger delivered the 2007 law school commencement address at the university of southern california on may th. Charlie mungers human misjudgment revisited philip c.
He begins the talk with safest way to get what you want is to deserve what you want. He gave three talks that were combined into this talk at harvard university on 25 different biases that are the root of most poor. The speech took place in 1995, but the audio was just recently uploaded. The mental models approach helps you understand reality. Charles munger, the vice president of berkshire hathaway, has written extensively on what he calls elementary wisdom, so much so that his remarks have been affectionately termed mungerisms. Heres a collection of inanities reported by the wsj. Bias 3 dislikinghating tendency we also ignore the virtues of those things we dislike and distort the facts to facilitate that hatred while putting on blinders to other options and opinions. I had previously listened to a recording of munger s the psychology of human misjudgment and read the transcript in poor charlies almanack and elsewhere. Charles thomas munger is warren buffetts irreverent business partn. Kants categorical imperative or golden rules consists of humans require to follow those behavior patterns that, if followed by all others, would make the surrounding human system work best for.
When i read transcripts of my psychology talks given about fifteen years ago. Munger served as chairman of wesco financial corporation from 1984 through 2011. Charlie munger 76 minute lecture on psychology of human. To fix artifacts, fonts and other extra html, i used plain old regex based find and replace on atom. In 1995, charlie munger gave a speech about how the human mind tricks itself into making poor decisions. Munger says this should be obvious but so many people dont understand the how important incentives are for shaping peoples motivation to complete a task. It contains everything you need to get started on the path of learning how to make better decisions, become more rational, and best of all become more successful at anything you choose. Charlie munger the psychology of human misjudgement by. In his speech, charlie talks about some of the different kinds of human. Twenty four standard causes of human misjudgement boing boing. I am very interested in the subject of human misjudgment, and lord knows ive created a good bit of it. Charlie munger on the psychology of human misjudgment speech at harvard university estimated date. I rejected it until i realized that my attitude was costing me a lot of money, and reduced my ability to help everything i loved.
This speech was originally delivered by charlie munger to an audience at harvard university in 1995. The psychology of human misjudgement in pdf format here via diana. This speech was originally given by charlie munger in 1995. I spent the weekend stewing on a few things, including why human beings do what they do. Munger is a guru in the original sense of the sanskrit word, a person who conveys wisdom.
Great speech by charlie munger at usc law commencement may 2007 part 3 of 5. In his speech, charlie talks about some of the different kinds of human misjudgments that he has encountered through his life. Bias 3 dislikinghating tendency 25 cognitive biases. Through inversion and bad judgment, he came up 25 tendencies that lead to. The psychology of human misjudgement is a talk given by charlie munger in 1995.
Charlie munger s the psychology of human misjudgement animated version. From his harvard speech, charlie munger on the psychology of human misjudgment. A collection of munger s speeches was collected by peter d. This bias has been hardwired into our brain from thousands upon thousands of years, in ancient times food was oftenscarce, food seen in possesion of another member of the same species triggers envy and jealousy. And this talk on the psychology of human misjudgment is one of the best youll ever. He is vice chairman of berkshire hathaway, the conglomerate controlled by warren buffett. The psychology of human misjudgement charlie munger full speech.
I recommend you to prepare for worse because pleasant surprises are easy to handle. That probably spurred some of my initial interest in the subject, and the combination of munger s talk with. He gave three separate talks ranging from about 20 to 23 years ago. Munger believes that if you combine doubtavoiding tendency with a desire to. Jul 25, 2017 charlie mungers famous speech the psychology of human misjudgment has changed my life. Munger, vice chairman of berskshire hathaway and partner of warren buffet and his listing of 25 innate human tendencies toward misjudgment that we harbor. Charlie munger likes to say hes a collector of inanities i. Charlie munger on 24 standard causes of human misjudgement i listened to a talk yesterday by charlie munger, a bigshot at berkshire hathaway warren buffetts investment firm.
One thought on charlie munger s the psychology of human misjudgement animated version pingback. Aug 09, 2018 audio of the often referred to speech by charlie munger on the psychology of human misjudgement given to an audience at harvard university circa jun 1995. Charlie munger on human misjudgment by charlie munger. Jef today announced that the boards of directors of both companies have approved a definitive merger agreement under which jefferies shareholders other than leucadia, which currently owns approximately 28. Unfortunately, your natural brains pretty dumb and easily tricked. Warren buffets partner, charlie munger lectures on human misjudgment at harvard law school, 1995. The psychology of human misjudgment, by charlie munger. And when you understand things at a deeper level you make better decisions. Munger speaks about the psychology of human misjudgement. Mar 02, 20 a collection of munger s speeches was collected by peter d.
The audio file below contains the often referred to speech by charlie munger on the psychology of human misjudgment given to an audience at harvard university back in 1995. Charlie munger gives a 76 minute lecture at harvard university. To fix artifacts, fonts and other extra html, i used plain old regex based find and replace on. I think its important for everyone to understand these concepts, but its particularly important for investors. The psychology of human misjudgment is one of the alltime classic discussions that better explain how to improve decisionmaking when investing. I have set up a bookmarks system in the pdf file to ease your navigation, which you can access by clicking view, navigation panels, bookmarks. The goal of an investor ought to be to take advantage of human misjudgment. What made these economists love the efficient market theory is the math was so elegant. In my perhaps biased view, berkshire has the best large insurance operation in the world.
Jul 25, 2016 i found a pdf version which, unlike the link above, was not a scanned copy. Given below is the mind map for one of the misjudgment association. The psychology of human misjudgment by charlie munger. Download 25 cognitive biases that ruin your life, explained as pdf.
Jan 03, 2017 charlie munger is the vice chairman of berkshire hathaway. The psychology of human misjudgement classic charlie. This is part of a series in which well be summarizing the text he authored titled the psychology of human. Charlie mungers famous speech the psychology of human misjudgment has changed my life. Jun 28, 2009 charlie munger is warren buffetts right hand man at berkshire hathaway nyse. This is a continuation of my previous blog posts on the psychology of human misjudgment, which is charlie munger s description of dysfunctional decision making heuristics. Almost 20 years ago, berkshire hathaway vicechairman charlie munger gave a talk called the psychology of human misjudgment at harvard. I took notes on the talk because it was interesting and conducive to note taking being a list and all.
I went through each of the 25 tendencies that are defined and discussed by charlie and tried to think about how the tendency could. Munger speaks about the framework for decision making and the factors contributing to misjudgements. Reviewing mungers the psychology of human misjudgment nyse. The phrase latticework of mental models comes from berkshirehathaways charles munger, who is a person that has spent most of his life working out ways to, for lack of a better term, think better munger has come to the conclusion that in order to make better decisions in business and in life, you must find and understand the core. Dislikinghating tendency happens from the time the newly arrived human is also born to dislike and hate. Charlie munger on the psychology of human misjudgment. The amount of waste from overtreatment of the dying is just. Charlie munger spent a lifetime avoiding stupid mistakes. A collection of speeches, essays, and wesco annual meeting notes. Apr 01, 2018 the mental models approach helps you understand reality. The psychology of human misjudgement classic charlie munger. I found a pdf version which, unlike the link above, was not a scanned copy.
How thinking like charlie munger may have saved my life 25iq. Munger, for those of you who havent heard of him, is the irreverent partner of. I know you dont do macro but just this once will you make us a prediction about the next ten years. The psychology of human misjudgment by charlie munger value. Charlie mungers lollapalooza effect and this credit fiasco. The psychology of human misjudgement classic charlie munger full speech 08092018 posted on august 9, 2018 by wsw staff audio of the often referred to speech by charlie munger on the psychology of human misjudgement given to. Charlie munger the psychology of human misjudgement. Munger s book, poor charlies almanack, collects his speeches and musings, including his intriguing thoughts on the 25 tendences that. This is an abridged and animated version of that speech. Charles thomas munger born january 1, 1924 is an american investor, businessman, former real estate attorney, and philanthropist.
Audio of the often referred to speech by charlie munger on the psychology of human misjudgement given to an audience at harvard university circa jun 1995. Charlie munger the psychology of human misjudgement by buffettmungerwisdom published on 20121215t16. Charlie mungers the psychology of human misjudgement. These were combined into this talk that was never made about 25 different biases that actually are the cause of most bad decisions that people make. May 08, 2017 berkshire hathaway vice chairman charlie munger told cnbc on monday the u. This article is part of a multipart series on human misjudgment by phil ordway, managing principal of anabatic investment partners.
Charlie munger is the vice chairman of berkshire hathaway. Munger preface when i read transcripts of my psychology talks given about fifteen years ago, i realized that i could now cre ate a more logical but much longer talk, including most of what i had earlier said. Charlie munger explains how his ignorance leaving harvard law school evolved and has been concisely summarized in this list of 25 causes of human misjudgment. Warren buffets partner, charlie munger lectures on human misjudgment at harvard. Charlie munger on human misjudgment the crosshairs trader.
Munger on human misjudgments charlie munger gave an insightful speech on 24 standard causes of human misjudgment, which has powerful implications for investors. The psychology of human misjudgement andrew wilkinson. The alternative truth was a little messy, and theyd forgotten the great economists keynes, whom i think said, better to be roughly right than precisely wrong. Leucadia national corporation luk and jefferies group, inc. A great post on metafilter turned me on to twenty four standard causes of human misjudgement, a classic 1995 speech by charlie munger much cited, and transcribed here in pdf, in which munger. Jul 03, 2017 charlie mungers the psychology of human misjudgement animated version. Twenty four standard causes of human misjudgement boing. Apr 24, 2014 the psychology of human misjudgment is one of the alltime classic discussions that better explain how to improve decisionmaking when investing. The psychology of human misjudgement, 1995 talk by charlie. Munger is known to be a republican, whereas buffett has generally supported democrats.
Used a web based pdf to doc converter, fixed some formatting and converted the. Underrecognition of the power of what psychologists call reinforcement and economists call incentives. The psychology of human misjudgment charlie munger s speech at harvard university, june 1995. Bias 7 kantian fairness tendency 25 cognitive biases. Charlie mungers tendencies of human misjudgment novel investor.
Charlie munger 25 cognitive biases flashcards quizlet. This may mean letting a driver merge infront of you or perhaps carrying more physical load for a short amount of time to benefit your group. Aug 07, 2018 if you are new to the world of charlie munger and mental models then this page is for you. Chapter 5 blood in the streets hopefully, not yours. And i will absolutely state that we have the best managers. The psychology of human misjudgement, 1995 talk by charlie munger.
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