Sunday, June 21, 2009
Charlie Munger's Prescription to Guaranteed Misery
I learnt positivity builds well on positivity and conversely, negativity feeds on negativity. From Warren Buffett, I learnt about Charlie Munger and from Munger, I learnt about Munger's personal heroes like Benjamin Franklin.
There're so many things that I have learnt from Charlie. One of my favorites is a speech he gave in 1986 on his son's graduation day at the Harvard School. His speech was an extension of Johnny Carson's graduation speech years prior, in which Carson gave his prescription for a life filled with misery. Munger's speech is well worth to be read in its entirety, and here, it should be summarized.
In Carson's original speech, he could not tell the graduating class how to be happy, but he could tell them from personal experience how to guarantee misery. Carson's prescription for sure misery are:
1) Ingesting chemicals in an effort to alter mood or perception
Munger went on to add on four more prescriptions to guaranteed misery.
1) Be unreliable. Do not faithfully do what you have engaged to do. If you will only master this one habit, you will more than counterbalance the combined effect of all your virtues, however great your virtues may be. If you like being distrusted and excluded from the best human contribution and company, this prescription is for you. Master this one habit, you will always play the role of the hare in the fable, except that instead of being outrun by one fine turtle, you will be outrun by hordes and hordes of mediocre turtles and even some mediocre turtles on crutches.
2) To learn everything you possibly can from your own experience, minimizing what you learn vicariously from the good and bad experience of others, living or dead. This prescription is to become as non-educated as you reasonably can. There was once a man who assiduously mastered the work of his best predecessors, despite a poor start and very tough time in analytical geometry. Eventually, his own work attracted wide attention, and he said of his work: "If I have seen a little further than other men, it is because I stood on the shoulders of giants."
The bone of that man lie buried now, in Westminster Abbey, under an unusual inscription: "Here lie the remains of all that was mortal in Sir Isaac Newton"
(This shows even genius like Newton learn from others. In the book Outliers, it argues that no one, even geniuses included can succeed solely on their own, example in point, Chris Langan - a person with an IQ over 190).
3) To go down and stay down when you get your first, second and third severe reverse in the battle of life. Because there is so much adversity out there, even for the lucky and wise, this will guarantee that, in due course, you will be permanently mired in misery.
4) To ignore a story told to the young Munger by a rustic who said, "I wish I knew where I was going to die, and then I'd never go there." Most people smile at the rustic's ignorance and ignore his basic wisdom. If you are bent on misery, ignore the rustic's approach at all cost. An example, if you keep losing on lottery, keep buying. If you keep drinking, keep on drinking and double up.
What Carson did was to approach the study of how to create X by turning the question backward, that is, by studying how to create non-X. Munger quoted the great algebraist, Jacobi who said, "Invert, always invert." Many hard problems are best solved only when they are addressed backward.
Munger thinks that Charles Darwin would have ranked near the middle of the Harvard School graduating class of 1986. Yet he is now famous in the history of science. This is precisely the type of example you should learn NOTHING from if bent on minimizing your results from your own endowment.
Darwin's result was due in large part to his working method, which violated all Mungers' and Carson's rules for guaranteed misery and particularly emphasized a backward twist in that he always gave priority attention to evidence tending to disconform whatever cherished and hard-won theory he already had. In contrast, most people early achieve and later intensify a tendency to process new and disconforming information so that any original conclusions remain intact.
The life of Darwin demonstrates how a turtle may outrun a hare (in business alike, turtle - like Walmart, Cap Cities/ABS in its early days - outrun hares - like Sears Roebuck, CBS), aided by extreme objectivity, which helps the objective person to end up like the only player without a blindfold in a game of Pin the Tail on the Donkey.
So minimize objectivity is another way to misery. If you minimize objectivity, you ignore not only a lesson from Darwin but also from Einstein. Einstein said that his successful theories came from "Curiosity, concentration, perseverance, and self-criticism." And by self-criticism, he meant the testing and destruction of his own well-loved ideas.
Munger signed off saying, "Gentleman, may each of you rise by spending each day of a long life aiming low."