20 Lessons from Poor Charlie's Almanack

20 Lessons from Poor Charlie's Almanack

This year, I read Poor Charlie's Almanack for the first time. I'd read several of Charlie Munger's talks, but never read what many consider to be one of the preeminent books on investing.

The lessons were many, but it's worth sharing some of my favorites. In no particular order, they are:

  1. The fewer things a business needs to be great at, the more likely it will succeed.
  2. Simple, but no simpler.
  3. Stick to what you know and when you venture outside of that be extra self-aware
  4. Life-long learning is essential to success, try to get a little smarter each day.
  5. The will-to-prepare is more important than the will-to-win.
  6. Facts are worthless in isolation.
  7. Strive for a deep understanding of the basics in the core disciplines like science, math and psychology.
  8. Our brains are wired with shortcuts - know when to use them and when to ignore them.
  9. The larger an organization, the more human nature to navigate.
  10. Find your edge, stay there, and bet when you have conviction.
  11. Master the best of what other people have already figured out.
  12. Use inversion to your advantage - what does success look like? what do you want to avoid?
  13. Take simple ideas, and take them seriously.
  14. It is easy to bring in new ideas, it is hard to eliminate old ones.
  15. Appeal to interest, not reason.
  16. We reach decisions quickly because we hate uncertainty.
  17. When reality is too painful, we bend the facts to make it bearable.
  18. We appraise ourselves on the high side and overvalue what we already own.
  19. We follow leaders blindly, be careful who you follow and how you lead.
  20. We love to problem solve and follow reason - always give the what, where, when, and why.

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