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Never, ever, think about something else when you should be thinking about the power of incentives.

Charlie Munger

How do you compete against a true fanatic? You can only try to build the best possible moat and continuously attempt to widen it.
CHARLIE MUNGER

Best Build Possible Rival True Yourself
If you don’t allow for self-serving bias in the conduct of others, you are, again, a fool.
CHARLIE MUNGER

Conduct Fools Service Yourself
Common stock investors can make money by predicting the outcomes of practice evolution. You can’t derive this by fundamental analysis – you must think biologically.
CHARLIE MUNGER

Biology Evolution Investment Money Practice Prediction Thinking
Bull markets go to people’s heads. If you’re a duck on a pond, and it’s rising due to a downpour, you start going up in the world. But you think it’s you, not the pond.
CHARLIE MUNGER

Head Marketing People Rise Start Thinking World Yourself
You’re not going to get very far in life based on what you already know. You’re going to advance in life by what you’re going to learn after you leave here.
CHARLIE MUNGER

Learning Leaving Life Yourself
The more hard lessons you can learn vicariously rather than through your own hard experience, the better.
CHARLIE MUNGER

Better Experience Hard Lesson Yourself
I think that, every time you saw the word EBITDA, you should substitute the word “bullshit” earnings.
CHARLIE MUNGER

Myself Substitution Thinking Time
Our experience tends to confirm a long-held notion that being prepared, on a few occasions in a lifetime, to act promptly in scale, in doing some simple and logical thing, will often dramatically improve the financial results of that lifetime.
CHARLIE MUNGER

Confirmation Experience Financial Preparation Result
I like people admitting they were complete stupid horses’ asses. I know I’ll perform better if I rub my nose in my mistakes. This is a wonderful trick to learn.
CHARLIE MUNGER

Learning Mistake People Stupidity Trick Wonderful
Intelligent people make decisions based on opportunity costs.
CHARLIE MUNGER

Cost Decision Intelligence Opportunity People
We don’t like trading agony for money
CHARLIE MUNGER

Agony Money Trade
Just avoid things like racing trains to the crossing, doing cocaine, etc. Develop good mental habits.
CHARLIE MUNGER

Avoid Development Habit Mental Race Training
To me, it’s obvious that the winner has to bet very selectively. It’s been obvious to me since very early in life. I don’t know why it’s not obvious to very many other people.
CHARLIE MUNGER

Early Investment Life Myself People Win
The best thing a human being can do is to help another human being know more.
CHARLIE MUNGER

Best Compassionate Empathy Help Human Kindness Learning
I believe in the discipline of mastering the best that other people have ever figured out. I don’t believe in just sitting down and trying to dream it all up yourself. Nobody’s that smart.
CHARLIE MUNGER

Believe Best Master Myself People Smart
Spend less than you make; always be saving something. Put it into a tax-deferred account. Over time, it will begin to amount to something. This is such a no-brainer.
CHARLIE MUNGER

Beginning Save Time Yourself

Never, ever, think about something else when you should be thinking about the power of incentives.

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Never, ever, think about something else when you should be thinking about the power of incentives.

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