Charlie Munger: Crypto Gambling

Meaning of Charlie Munger Money Quote: saying Crypto is not a currency, it is a gambling contract with 100% favor for the house. Charlie Munger said:
 

 

“A cryptocurrency is not a currency, not a commodity, and not a security.
 Instead, it’s a gambling contract with a nearly 100% edge for the house” — Charlie Munger

Charlie Munger considers cryptocurrency gambling rather than a currency for a few key reasons. He believes that unlike traditional currencies which are backed by governments, cryptocurrencies have no intrinsic value and their price is determined purely by speculation. Since the value can fluctuate wildly based on market sentiment, Munger sees it as similar to betting on an unpredictable asset.

He also argues that the structure of cryptocurrency favors those who trade it like a commodity over long-term users, since new coins are often released which dilutes the value of existing holdings. While cryptocurrency proponents view it as a new kind of currency, Munger takes the stance that it lacks the stability and purpose of a normal currency.

Birthday: January 1, 1924 – Death: November 28, 2023

Charlie Munger: Inflation Silly Needs

Meaning of Charlie Munger Money Quote: saying a defense against inflation is not needing material silly stuff in your life. Charlie Munger said:
 

 

“One of the great defenses if you’re worried about inflation is not to have a lot of silly needs in your life – you don’t need a lot of material goods” — Charlie Munger

This quote from Charlie Munger is advising that having fewer material possessions and needs can help protect against the effects of inflation. Munger is suggesting that by not constantly wanting or needing the latest goods, your cost of living will not rise as quickly when prices increase.

Having a more minimal lifestyle focused on essentials rather than excess will make your expenses less vulnerable to inflation. The “great defense” Munger refers to is maintaining a simple lifestyle with fewer material wants, as this insulates your spending from price increases across the economy.

Birthday: January 1, 1924 – Death: November 28, 2023

Charlie Munger: First $100K Bitch

Charlie Munger Money Quote saying it’s tough to raise the table stakes, but once you have $100k you can relax a little. Charlie Munger said:
 

 

“The first $100k is a bitch, but you gotta do it. I don’t care what you have to do – if it means walking and not eating anything that wasn’t purchased with a coupon, find a way to get your hands on $100,000. After that you can ease of the gas a little bit” — Charlie Munger

This quote from Charlie Munger is advising that the initial $100,000 is very difficult to accumulate, but it is an important milestone to reach. Munger is suggesting that extreme sacrifice may be needed in the early stages, such as limiting spending, walking instead of driving, only buying food with coupons, and focusing all efforts on earning and saving money.

However, he implies that once that first $100,000 is achieved, it will become easier to continue growing wealth. Munger seems to be emphasizing the value of grit and determination in the beginning phases of building financial stability and independence, even if it requires significant hardship, and that things can become less stringent after surpassing that initial hurdle.

Birthday: January 1, 1924 – Death: November 28, 2023

Charlie Munger: Tooth Fairy Points

Charlie Munger Money Quote saying that Berkshire Hathaway doesn’t use trendy strategies that are comparable to children’s fairy tales to invest. Charlie Munger said:
 

 

“I think you’d have to believe in the tooth fairy to believe that you could easily outperform the market by seven percentage points per annum just by investing in high volatility stocks” — Charlie Munger

In this quote, Charlie Munger is expressing skepticism about the ability of individual investors to consistently beat the overall market by large margins simply by investing in more volatile stocks. He implies it would take an unrealistic belief, like in the tooth fairy, to think you could reliably achieve annual returns 7% higher than the market average just through picking stocks with high price fluctuations.

Munger seems to be warning against overconfidence in being able to time the market or select winners, suggesting it is very difficult to outperform professionally managed indexes by such a wide margin on a long-term basis only using high volatility stocks as your investment strategy.

Birthday: January 1, 1924 – Death: November 28, 2023

Charlie Munger: Finance Out of Control

Charlie Munger, vice-chair Berkshire Hathaway, Money Quote saying as a Republican, there are few other things he can agree with Elizabeth Warren on – except current state of banking is risky and dangerous. Charlie Munger said:
 

 

“Elizabeth Warren doesn’t agree with me on many subjects, and I wouldn’t agree with her on many subjects, but she is basically right when she says that American finance is out of control and that it isn’t good for the rest of us” — Charlie Munger

In this quote, Charlie Munger is agreeing with Elizabeth Warren’s assessment that the American financial system has become excessive and unbalanced in a way that negatively impacts most citizens.

While Munger and Warren likely disagree on specific policies or solutions, Munger acknowledges that Warren’s broader point about the financial industry having too much influence and power at the expense of ordinary Americans is valid.

By saying she is “basically right” on this issue, Munger seems to be conceding that the interests of large financial institutions have come to dominate in a way that is unhealthy for society and the overall economy.

Birthday: January 1, 1924 – Death: November 28, 2023