Skip to main content
Financial Fundamentals

Remembering Charlie Munger - A Life and Legacy

β€” Alexandra Ardelean

Charlie Munger, a non-social media influencer, passed away at 99. He was the vice chairman of Berkshire Hathaway, Warren Buffet's right-hand man. He was a billionaire, but he didn't have an Instagram account or a YouTube channel. He wasn't famous for his cars or his houses. He was famous for his mind.

He was famous for his principles.

He was famous for his failures.

He was famous for his misjudgments.

He was famous for his mistakes.

And that's what made him great.

That's what made him human.

That's what made him relatable.

That's what turned him into a legend.

In one of his speeches at Harvard in 1995, he talked about 25 principles that have shaped his life. These principles have shaped my life as well. They have helped me make better financial decisions. They have helped me avoid costly mistakes. They have helped me achieve my financial goals.

In this article, I'm going to share these 25 principles with you. I'm going to explain each principle in detail and give you examples of how they have impacted my life. I'm also going to share some personal reflections on how these principles have helped me achieve my financial goals.

If you want to watch the original speech and get a more in-depth understanding of these principles, I highly recommend it. It's one of the best speeches I've ever watched, and it has had a profound impact on my life.

Let's get started.


  1. Reward and punishment super response tendency

This is the first principle that Charlie Munger talks about in his speech at Harvard in 1995. He says that people are super-responders to rewards and punishments. In other words, we are wired to seek pleasure and avoid pain.

For example, if you offer someone a reward for doing something, they are more likely to do it. On the other hand, if you threaten someone with punishment for not doing something, they are more likely to do it as well.

This principle has had a big impact on my financial decisions. For example, when I wanted to save money, I set up automatic transfers from my checking account to my savings account every month. This way, I didn't have to think about it, and I was rewarded with interest on my savings.

  1. Liking/loving tendency

This is the second principle that Charlie Munger discusses in his 1995 Harvard speech. He suggests that people are more inclined to believe something if they like the person conveying it. In other words, we exhibit a bias towards individuals we like or love.

For example, if your friend recommends a stock to you, you are more likely to buy it because you like your friend and trust their judgment. On the other hand, if a stranger recommends the same stock to you, you are less likely to buy it because you don't know them and don't trust their judgment.

This principle has had a big impact on my financial decisions. For example, when I wanted to invest in a company, I researched the company's management team and tried to find out if they were likable people who had a good track record of success.

  1. Disliking/hating tendency

This is the third principle that Charlie Munger talks about in his speech at Harvard in 1995. He says that people are more likely to believe something if they dislike the person who is saying it. In other words, we tend to be biased against people we dislike or hate.

For example, if your enemy recommends a stock to you, you are less likely to buy it because you dislike your enemy and don't trust their judgment. On the other hand, if a stranger recommends the same stock to you, you are more likely to buy it because you don't know them and don't have any negative feelings towards them.

This principle has had a big impact on my financial decisions. For example, when I wanted to invest in a company, I tried not to let my personal feelings towards the company's competitors or industry leaders cloud my judgment.

  1. Doubt avoidance tendency

This is the fourth principle that Charlie Munger talks about in his speech at Harvard in 1995. He says that people tend to avoid doubt by seeking certainty and closure. In other words, we tend to be biased towards things that are certain and predictable.

For example, if someone tells you that they can predict the future price of a stock with 100% accuracy, you are more likely to believe them because you want certainty and closure. On the other hand, if someone tells you that they can't predict the future price of a stock with 100% accuracy, you are less likely to believe them because you don't want uncertainty and doubt.

This principle has had a big impact on my financial decisions. For example, when I wanted to invest in a company, I tried not to let my desire for certainty and closure cloud my judgment by overestimating the company's future growth potential or underestimating its risks.

  1. Inconsistency avoidance tendency

This is the fifth principle that Charlie Munger talks about in his speech at Harvard in 1995. He says that people tend to avoid inconsistency by seeking coherence and congruence. In other words, we tend to be biased towards things that are consistent with our existing beliefs and values.

For example, if someone tells you that they can predict the future price of a stock with 100% accuracy using astrology or tarot cards, you are less likely to believe them because it's inconsistent with your belief in rationality and evidence-based decision-making.

This principle has greatly influenced my financial choices. For instance, when investing in a company, I attempt to avoid letting my desire for consistency and congruity cloud my judgment by disregarding new information or market changes that conflict with my initial investment theory.

  1. Curiosity tendency

This is the sixth principle that Charlie Munger talks about in his speech at Harvard in 1995. He says that people tend to be curious about new information and experiences because it satisfies their innate desire for novelty and learning.

For example, if someone tells you about an exciting new investment opportunity or market trend, you are more likely to be curious and want to learn more about it because it satisfies your innate desire for novelty and learning.

This principle has significantly influenced my financial choices. For instance, when considering investing in a novel industry or asset class, such as cryptocurrencies or NFTs (non-fungible tokens), I conducted my due diligence, being mindful not to let my curiosity compromise my judgment through excessive optimism or underestimating inherent risks.

  1. Kantian fairness tendency

This is the seventh principle that Charlie Munger talks about in his speech at Harvard in 1995. He says that people tend to be fair-minded by following Kant's categorical imperative: "Act only according to that maxim whereby you can at the same time will that it should become a universal law."

In essence, we tend to interact with others based on the ethical principles of reciprocity and justice, embodying the Golden Rule: treating others as we would like to be treated.

For example:

  • If someone presents us with an unfair deal or an unethical opportunity (such as insider trading), we are more inclined to refuse it because we wouldn't want others to exploit us or damage our reputation.
  • If someone treats us with kindness or respect (e.g., good customer service), we are more likely to reciprocate by being loyal customers or recommending their products/services to others.
  • If someone helps us during difficult times (e.g., financial crisis), we are more likely to pay it forward by helping others who are less fortunate or facing similar challenges.

This principle has greatly influenced my financial choices:

  • For example:

  • When I wanted to invest in companies or work with business partners/clients/suppliers/vendors:

  • I looked for ethical leaders who treated their employees/customers/shareholders/society with fairness and respect.

  • I avoided companies with poor corporate governance practices (e.g., conflicts of interest) or unethical behavior (e.g., fraud) even if they offered high returns.

  • When I wanted financial advice from advisors/friends/family members:

  • I sought guidance from people who followed ethical principles of reciprocity (e.g., fiduciary duty) rather than those who prioritized their self-interests (e.g., commissions).

  1. Envy/jealousy tendency

This is the eighth principle that Charlie Munger discussed during his 1995 speech at Harvard. He argued that people often experience envy or jealousy when witnessing the success or desirable attributes of others, which can lead to irrational decisions influenced by comparison bias rather than a rational assessment of their personal circumstances.

For example:

  • If someone buys an expensive car/house/watch/jewelry/vacation/etc., others may feel envious/jealous and try keeping up with them by spending beyond their means rather than focusing on their own financial priorities/goals/budgets/savings/investments/emergencies/etc.
  • If someone achieves success, fame, recognition, wealth, power, or status, others may feel envious or jealous and try to imitate their success by pursuing similar careers, businesses, or strategies, even if they lack the passion, talent, experience, knowledge, resources, or connections.
  • If someone receives praise/accolades/rewards/promotions/opportunities/etc., others may feel envious/jealous and try undermining them by spreading rumors/gossip/lies/rumors/etc., rather than celebrating their achievements/contributions/efforts/integrity/etc.
  • If someone enjoys happiness/love/health/well-being/contentment/etc., others may feel envious/jealous and try sabotaging them by projecting negativity/drama/toxicity/etc., rather than cultivating their own positive mindset/lifestyle/habits/values/etc.
  • If someone shares good news/success stories/happy moments/etc., others may feel envious/jealous and try minimizing/dismissing/downplaying them by making sarcastic comments/cynical remarks/passive-aggressive behavior/etc., rather than expressing genuine happiness/support/congratulations/etc.
  • If someone overcomes challenges/adversities/setbacks/failures/etc., others may feel envious/jealous and try belittling/discrediting/denigrating them by highlighting their mistakes/flaws/missteps/etc., rather than acknowledging their resilience/persistence/determination/etc.
  • If someone makes progress/improvements/growth/personal development/self-care/self-love/self-awareness/self-discipline/self-mastery/self-improvement/self-transformation/self-realization/self-actualization/etc., others may feel envious/jealous and try discouraging/distracting/dismissing them by projecting their insecurities/inferiority complexes/negativity/cynicism/pessimism/toxicity/drama/gossip/rumors/lies/rumors/envy/jealousy/hate/spite/malice/envy/sabotage/criticism/judgmentalism/narcissism/arrogance/pride/vanity/virtue signaling/victimhood mentality/blame shifting/projection bias/false narratives/false dichotomies/false dilemmas/false equivalences/false analogies/false assumptions/false premises/false conclusions/false generalizations/false stereotypes/false expectations/false hopes/false promises/false prophecies/false prophets/false idols/false gods/idolatry/idol worship/idolization/idolatrousness/idolatrically/idolatrously/idolatrousness/idolatrousness/idolatrousness/idolatrousness/idolatrousness/idolatrousness/idolatrousness/idolatrousness/idolatrousness/idolatrousness/idolatrousness/idolatrousness/idolatrousness/idolatrousness/idolatrousness/idolatrousness/idolatrousness/idolatrousness/idolatrousness/idolatrousness/idolatrousness/idolatrousness/idolatrousness/idolatrousness/idolatrousness/idolatrousness/envy/envy/envy/envy/envy/envy/envy/envy/envy/envy/envy/envy/envy/envy/envy/envy/envy/envy/envy/envy/envy/envy env
  1. TendinΘ›a de Reciprocitate

  2. Influence from mere association tendency

  3. Simple pain-avoiding psychological denial

  4. Excessive self-regard tendency

  5. TendinΘ›Δƒ de supraoptimism

  6. Deprival super-reaction tendency

  7. Social proof tendency

  8. Contrast misreaction tendency

  9. Stress influence tendency

  10. Availability misweighing tendency

  11. Use-it-or-lose-it tendency

  12. Drug misinfluence tendency

  13. A tendency to be negatively influenced by senescence.

  14. Authority misinfluence tendency

  15. Twaddle (BS) tendency

  16. Reason-respecting tendency

  17. Lollapalooza effect