Munger lives so, life is enough.

Munger's way of living makes life fulfilling.

Source: Huxiu Huxiu Note: Charlie Munger (Charlie Thomas Munger, January 1, 1924 – November 28, 2023), Warren Buffett’s golden partner, has passed away at the age of 99. Originally, 33 days later, he would have celebrated his 100th birthday.

On November 28, 2023, local time, Berkshire Hathaway issued a statement on its subsidiary’s American Business Information website, stating that Charlie Munger, the vice chairman of the board of directors, was peacefully passing away in a hospital in California a few minutes ago.

Warren Buffett later issued a statement saying, “Without Charlie’s inspiration, wisdom, and participation, Berkshire Hathaway would not have achieved its current status.”

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Buffett, born on August 30, 1930, is six years younger than Munger. Both were born in Omaha, Nebraska. In 2018, Buffett said in an interview with CNBC, “In our entire time knowing each other, we have never argued, and it has been almost 60 years.”

We will no longer see Buffett and Munger sitting together, accepting marathon-like questioning at Berkshire Hathaway’s annual shareholder meeting. Perhaps at this moment, Buffett feels the most lonely and lost.

Munger once said, “Get universal wisdom and adjust your behavior accordingly. Even if your idiosyncrasies make you unpopular among the crowd… then let them be.”

He had a lot of wisdom in life, and here’s just one quote: “If you don’t have anyone to learn with, you’ll remain ignorant. Everyone needs to find like-minded people to learn from each other and make progress together. I always have a few good friends like this around me, but not many. With a wise wife in life and a couple of like-minded colleagues in business, one’s life is enough.”

His wisdom will continue to enlighten and warn us. Here, we borrow the foreword of the Chinese version of “Poor Charlie’s Almanack: The Wit and Wisdom of Charles T. Munger” by Li Lu, manager of the Munger family’s wealth and founder of Himalaya Capital, to commemorate this top investment master. The original title was “There’s Gold in These Pages,” and it went through two revisions: the original draft in March 2010, a revision in November 2011 in Pasadena, California, and another revision in January 2019 in Pasadena, California. The following is the main text, slightly abridged by Huxiu.

Over 20 years ago, as a young student who came to the United States alone, I never thought I would later work in the investment industry, let alone have the good fortune to meet the contemporary investment master, Charlie Munger. In 2004, Munger became my investment partner, and since then, he has been my lifelong mentor and friend. This kind of opportunity is probably something I couldn’t have dreamed of in the past.

Like thousands of Buffett/Munger admirers around the world, the teachings of these two teachers and the phenomenal performance of Berkshire Hathaway have had a transformative impact on my personal investment career. Over the years, benefiting from Munger’s close personal mentorship, I have come to appreciate the profound depth of his thoughts even more deeply. All along, I have hoped to share these learning experiences with more like-minded individuals. Peter Kaufman’s book is the best effort in this regard. Peter is a long-time friend of Charlie, and he himself is an exceptionally talented entrepreneur and a “professional bookworm.” The book he edited, “Poor Charlie’s Almanack,” comprehensively encapsulates the essence of Charlie’s thoughts. Peter is both my friend and investment partner, so I have always been closely following the entire publication process of this book. When the first edition of this book was published in 2005, I felt like I had found a treasure, studying it repeatedly, and gaining new insights with each read. At that time, I wanted to diligently translate and introduce this book to Chinese readers. Unfortunately, this desire took another five years to fulfill. In 2009, Charlie turned 85. Prompted by a friend’s reminder, I realized that translating this book into Chinese would be the best repayment to my mentor and would also fulfill my long-held desire to share Munger’s wisdom with my fellow countrymen.

Now that this book is about to be published, I also want to contribute my personal journey of learning and practicing Munger’s thoughts and character, as well as my experiences and insights, to better help readers grasp the wisdom contained in this book.

My first exposure to Buffett/Munger’s value investing system dates back 20 years. At that time, I had just arrived in the United States, alone and unfamiliar with the culture and unable to communicate in the language. I was fortunate to enter Columbia University for my undergraduate studies and immediately faced the problem of expensive tuition and living expenses. Although I had some scholarships and could take out loans, for a penniless student, that loan was a astronomical number, and I had no idea when I would be able to pay it back, causing me to feel lost and anxious about my future. I believe many Chinese students studying in the United States, especially those who rely on borrowing and working to pay for tuition and living expenses, have had similar experiences.

Because I grew up in China in the 1970s and 1980s, I had almost no concept of business at that time. In that era, business was not very important in China. One day, a classmate told me, “If you want to understand how to make money in America, you must go listen to a speech at the business school.” The name of the speaker was a bit strange, Buffett, which sounded similar to “buffet,” the meaning of self-service. I found the name quite interesting, so I went. At that time, Buffett was not as famous as he is today, and there were not many people attending the speech, but for me, that speech was an enlightening experience.

Buffett’s speech is about investing in the stock market. Before this, my impression of the stock market was still stuck in the 1930s Shanghai portrayed in Cao Yu’s play “Sunrise”, full of cunning, luck, and blood. However, this successful American businessman, who is said to have made a lot of money in the stock market, obviously appears to be a good person, friendly and smart, with a scholarly air, completely different from those ruthless and speculative businessmen I imagined.

Buffett’s speech is concise, well-structured, and credible. A speech of over an hour clarified the principles of the stock market. Buffett said that stocks are essentially partial ownership of a company, and the price of a stock is determined by its value – the value of the company. And the value of the company is determined by its profitability and net assets. Although the fluctuations in stock prices are difficult to predict in the short term, in the long run, they are definitely determined by the value of the company. Smart investors just need to buy when the stock price is much lower than the actual value of the company, and sell when the price is close to or higher than the value, they can make a lot of money with minimal risk.

After listening to this speech, I feel like I’ve found a lifeline. Does it mean that a smart, honest, and knowledgeable person doesn’t need the support of a family or expertise in company management, or inventing and creating new products, founding new companies, in America can start from scratch and become successful and rich? There is such a living example in front of me! At that time, I considered myself unsuitable for management because I was unfamiliar with American society and culture, and I had no certainty in starting a business. But if it is about studying the value of a company, researching some complex business data and financial reports, that is my expertise. If that’s really the case, then even someone like me, a foreigner with no money, no relatives, no social foundation, and no experience, can also make a mark in the field of stock investment, right? This is really tempting.

After listening to the speech, I immediately looked for all the books about Buffett, including his annual letters to Berkshire Hathaway shareholders and various studies about him. I also learned that Mr. Munger has been Buffett’s inseparable partner for decades. Then I spent a whole year or two thoroughly researching them, and all the research confirmed the impression I had when listening to the speech. After completing this research, I truly felt confident that this industry was worth pursuing.

A year or two later, I bought my first stock ever. At that time, although my personal net worth was still negative, I had accumulated some cash to invest. At that time, it was the early 1990s, and the process of globalization had just begun, with companies in various industries in the United States in a long-term upward trend, and there were many undervalued stocks in the market. By the time I graduated from Columbia University in 1996, I had already obtained significant returns from stock market investments.</p

After graduating, I worked at an investment bank while continuing to invest in stocks. In my first year of work, I had the opportunity to be involved in the entire process of a large company going public and received a large bonus. However, I didn’t enjoy working in investment banking, and I realized that the salary and bonus I earned there were not as much as the money I made in the stock market in my spare time. That’s when I suddenly realized that investing in the stock market was not only a lifeline and a hobby for me, but it could even become a lifelong career. A year later, I quit my job at the investment bank and started my career as a professional investor. At that time, my family and friends were quite puzzled and worried, and I myself wasn’t entirely sure about the future. To be honest, the courage to start my own business also came from the influence of Buffett and Munger.

In January 1998, I founded my own company, with few supporters. A few old friends acted as investors and pooled a small amount of money. I took on multiple roles myself, serving as the chairman, fund manager, secretary, and analyst. All I had was a mobile phone and a laptop. It happened to be during the Asian financial crisis of 1997, and the price of oil fell below $10 per barrel. So I started buying stocks of excellent Asian companies in large quantities and also bought a lot of stocks of American and Canadian oil companies. However, the subsequent stock market fluctuations caused me to lose 19% of the book value that year. Some investors started to worry about the future operations and were hesitant to invest further. One of the biggest investors withdrew the next year. Combined with the expensive initial operating costs, the company faced a crisis of survival.

The unfavorable start put a lot of pressure on me, and I felt that I had let down the trust of the investors. And these psychological burdens can indeed affect investment decisions, such as not taking action even when encountering good opportunities. And that happened to be the best time to invest. At that time, the ideas and examples of Buffett and Munger provided me with great support. They both had similar experiences during the 1973-1974 U.S. economic recession. When I was at my lowest point, I took Buffett and Munger as examples to encourage myself and always insisted on looking at the bigger picture.

Then, in the second half of 1998, I resisted the pressure, gathered courage, and made three or four of the most important investment decisions at that time. These investments brought me and my investors multiple times of returns in the following two years. Looking back now, I was lucky in terms of timing, but the influence of Buffett and Munger’s examples and their books and ideas played a crucial role in my journey.

However, the outstanding performance did not bring me new investors. At that time and even now, the majority of individual and institutional investors follow some theories that I think are brainless when it comes to investment philosophy. For example, they believe in the efficient market theory and equate stock price fluctuations with true risks, judging your performance based on how volatile it is. I feel like I’m playing the lute to a cow when talking to them. In my opinion, the biggest risk in investing in the stock market is not the ups and downs of prices, but whether your investment will incur permanent losses in the future. Pure stock price declines are not risks, they are opportunities. Otherwise, where would you find cheap stocks? It’s like if the price of your favorite steak in a restaurant halved, you would enjoy it even more. When buying stocks that are falling, it’s the sellers who feel uncomfortable, so as a buyer, you should be happy. I explained to them that my investment principles follow the investment philosophy of Buffett and Munger. However, I then realized that although Buffett and Munger were very successful, the actual practices of individual and institutional investors were completely opposite to the investment principles of Buffett/Munger. On the surface, those well-known fund managers accept the theories of Buffett/Munger and show great respect for them, but in actual operations, they are completely on the opposite side because their clients are on the opposite side too. They still adhere to theories like “volatility is risk” and “the market is always right.” In my opinion, that is just a strange and absurd theory.

But in order to retain and attract more investors, I had to make compromises for a while. For two or three years, I had to manage the volatility of the funds under my management by engaging in long-short hedging. Short trading is difficult to use for long-term investments compared to long trading. There are three reasons: Firstly, the profit potential of short trading is limited to 100%, but the loss can be almost infinite, which is the opposite of long trading. Secondly, short trading requires borrowing, so even if the decision to short is correct, the operator may still face losses or even bankruptcy if the timing is incorrect. Thirdly, the best opportunities for short investments are usually associated with various fraudulent situations, but frauds are often well hidden and take a long time to uncover. For example, Madoff’s scam lasted for decades before being discovered. Due to these three reasons, short trading requires constant monitoring of market fluctuations and continuous trading.

After doing this for a few years, the volatility of the investment portfolio decreased significantly. During the 2001-2002 financial crisis caused by the dot-com bubble, we didn’t suffer any losses on paper and even made some gains. The funds under management also increased significantly. One of the most legendary figures in the hedge fund industry became one of my main investors, and another invited me to co-found an Asian investment fund. It may seem glamorous on the surface, but I was actually in great pain. To control the risks of short trading while also engaging in long trading, one must constantly trade. But if you’re constantly trading, there’s simply no time to truly research long-term investment opportunities. In terms of volatility, the returns during this period were better than before, but the results were disappointing. In reality, many excellent investment opportunities emerged during that time. Frankly speaking, the biggest failure of my career was not caused by my own wrong decisions (although I’ve had my fair share of those), but rather the missed opportunity to buy a large amount of the best stocks I liked during this period, the money I missed out on is still increasing.

This period was a low point in my career. I even considered quitting at one point, as I had spent too much time on a venture capital fund that was not my main business.

At the crossroads of the future, a chance encounter brought me my lifelong mentor and friend, Mr. Charlie Munger.

I first met Charlie when I had just graduated from university and was working at an investment bank in Los Angeles. I met him for the first time at the home of a mutual friend. I remember that the first impression he gave was of someone distant and often absent-minded during conversations, very focused on his own topics. But this elderly gentleman spoke concisely, and his words were filled with wisdom that lingered in your mind. At our first meeting, Charlie was an unreachable senior figure to me, and he probably didn’t have much of an impression of me either.

Afterwards, we met a few more times and had some conversations, until the seventh year of our acquaintance, during a Thanksgiving gathering in 2003, where we had a long and heartfelt conversation. I introduced all the companies I invested in, researched, and found interesting to Charlie, and he commented on each one. I also sought his advice on the problems I encountered. In the end, he told me that the problems I faced were almost the same as those on Wall Street. The entire mindset on Wall Street was flawed, and even though Berkshire Hathaway had achieved such great success, there wasn’t a single company on Wall Street that truly emulated it. If I continued on this path, my troubles would never go away. However, if I was willing to give up my current approach and take a different path from Wall Street, he would invest in me. This truly amazed me.

With Charlie’s help, I completely restructured the company. Structurally, it became similar to the early partnership models of Buffett and Munger, while also eliminating all the downsides of typical hedge funds. The investors who wanted to stay with us made a long-term investment commitment, and we no longer accepted new investors. The new fund also retained a portion of the original fund’s investment portfolio, including our investment in BYD.

So, I entered another golden period in my investment career. I no longer had to deal with the various restrictions imposed by Wall Street investors, and the investment results after the institutional restructuring itself proved the correctness of this decision. Although the numbers still fluctuated, the ultimate result was significant growth. From the fourth quarter of 2004 to the end of 2009, the compound annual return of the new fund exceeded 36% excluding operating costs. Since the inception of the original fund in January 1998, the compound annual return was over 29%. Over the course of 12 years, the returns increased more than 20 times.

Setting aside the numbers, these years of work have been much smoother. I no longer have to get caught up in the ups and downs of the stock market, constantly trading and shorting. Instead, I can spend all my time researching and understanding companies. My investment experience has clearly shown that investing according to the Buffett/Munger system will benefit all parties involved. However, due to the restrictions of investment institutions themselves, the majority of institutional investors do not adopt this approach. Therefore, it gives investors who do use this approach a significant competitive advantage. And this advantage will not disappear for a long time in the future.

Buffett said he has met countless people throughout his life and has never met anyone like Charlie. In these years of interacting with Charlie, I have been fortunate enough to get to know him up close, and I firmly believe in this. Even in the biographies of figures I have read from ancient to modern times, I have not discovered anyone similar. Charlie is such a unique person, and his uniqueness is evident both in his thinking and in his character.

For example, when it comes to problem-solving, Charlie always starts with the reverse. If he wants to understand how to achieve happiness in life, Charlie first studies how to become miserable; if he wants to study how companies become strong and successful, Charlie first studies how they fail; while most people are focused on how to succeed in the stock market, Charlie is most interested in why most people fail in the stock market. This thinking method stems from the philosophy contained in the following farmer’s proverb: I only want to know where I will die, so I never go there.

Throughout his long life, Charlie continuously collects and studies famous cases of failure in various fields, including individuals from all walks of life, businesses, government governance, academic research, etc. He compiles the reasons for these failures into a checklist for making the right decisions, which enables him to make almost no major mistakes in life and career decisions. The importance of this to Buffett and Berkshire Hathaway’s 50-year performance cannot be overstated.

Charlie’s mind is original, never bound by any rules, and has no dogma. He has the curiosity of a child, as well as the research qualities and scientific research methods of a top scientist. He has a strong thirst for knowledge throughout his life and is interested in almost every question. He believes that any question can be fully mastered through self-study using the correct method and can be innovated based on the foundation of predecessors. In this respect, he is very similar to Franklin, resembling a 18th and 19th-century encyclopedia-like figure.

In modern times, many top experts and scholars can achieve relative objectivity within their narrow research fields, but once they venture far from their fields, they become subjective, dogmatic, rigid, or even lose the ability to learn on their own. So, they are often limited to the blind man’s touch. Charlie’s mind has never been confined to any discipline. His thoughts radiate to every corner of business, life, and knowledge. In his view, all things in the world are an interconnected whole, and all human knowledge is a partial attempt to study this whole. Only by combining this knowledge and weaving it into a framework of thought can it help with correct cognition and decision-making. Therefore, he advocates learning the truly important theories in all disciplines and forming the so-called “universal wisdom” based on them as a tool to study important issues in the field of business investment. Charlie details how to obtain this “universal wisdom” in this book.

Charlie’s way of thinking is based on honesty in knowledge. He believes that the world is complex and ever-changing, and human cognition is always limited, so you must use all tools available and focus on collecting various new pieces of evidence that can be refuted and modify them at any time, hence the saying “to know what one knows, and to not know what one does not know.” In fact, everyone has blind spots in their thinking. We may be objective about our own profession, others, or certain things, but it is difficult, even contrary to human nature, to maintain an objective attitude towards everything in the world. But Charlie can be objective about everything. In this book, Charlie also talks about how objectivity can be developed through training. And developing this way of thinking will allow you to see things others can’t see and predict a future that others can’t predict, leading to a happier, freer, and more successful life.

But even so, the foresight and insight that a person can truly gain in their lifetime is still very limited, so correct decisions must be confined within one’s “circle of competence.” An ability that cannot define its boundaries cannot be considered a true ability. So how can one define their circle of competence? Charlie says, if I want to hold a viewpoint, and if I cannot defend this viewpoint better than the smartest, most capable, and most qualified person in the world, then I do not deserve to hold this viewpoint. So when Charlie truly holds a certain viewpoint, his thoughts are both original and unique, and he seldom makes mistakes.

Once, a beautiful lady sitting next to Charlie insisted that he use one word to summarize his success, Charlie said it was “rationality.” However, the “rationality” that Charlie talks about is not the rationality that ordinary people understand. Charlie has a more stringent definition of rationality. It is precisely this “rationality” that gives Charlie a sharp and insightful vision, allowing him to see through the essence of things even in completely unfamiliar fields. Warren Buffett calls this characteristic of Charlie the “two-minute effect” – he says that Charlie can explain the essence of a complex business in the shortest possible time better than anyone else in the world. The process by which Berkshire Hathaway invested in BYD is evidence of this. I remember the first time I talked to Charlie about BYD in 2003. Even though he had never met Wang Chuanfu in person, and had never visited BYD’s factory, and was relatively unfamiliar with the Chinese market and culture, at that time, his questions and comments on BYD were still the most substantial.

Everyone has blind spots, even exceptional people. Buffett said, “Benjamin Graham taught me to only buy cheap stocks, and Charlie changed my mind. This is the real impact Charlie has had on me. It takes a powerful force to get me out of Graham’s limited theory. Charlie’s thinking is that force, he has expanded my horizons.” I myself have a deep understanding of this. At least in two significant issues, Charlie pointed out the blind spots in my thinking. If it weren’t for his help, I would still be crawling slowly in the process of evolution from ape to man. Buffett has repeatedly emphasized in different occasions over the past 50 years that Charlie’s influence on him personally and on Berkshire Hathaway cannot be replaced by anyone else.

Charlie has devoted his life to studying human catastrophic errors, and he has a particular fondness for catastrophic errors caused by human psychological tendencies. His most significant contribution is his prediction that the proliferation of financial derivatives and loopholes in accounting auditing systems will bring disaster to mankind. As early as the late 1990s, he and Mr. Buffett had already pointed out the potentially catastrophic impact of financial derivatives. As the proliferation of financial derivatives continued to escalate, their warnings intensified. They even pointed out that financial derivatives are financial weapons of mass destruction, and if they cannot be effectively stopped in a timely manner, they will bring catastrophic consequences to modern civilized society. The financial tsunami in 2008 and 2009 and the global economic depression unfortunately validated Charlie’s foresight. On the other hand, his research on these issues also provides valuable experience and knowledge for preventing similar disasters and deserves the attention of governments, the financial industry, the business community, and academia.

Compared to Buffett, Charlie’s interests are much broader. For example, he has a strong interest and extensive research in almost all areas of science and social science, forming an original and unique Munger ideology through integration. Compared to any idea system from an ivory tower, Mungerism is completely born to solve practical problems. For example, as far as I know, Charlie was the first to propose and systematically study the significant influence of human psychological tendencies on investment and business decisions. Today, more than a decade later, behavioral finance has become one of the hottest research fields in economics, and behavioral economics has been recognized with the Nobel Prize in economics. The theoretical framework demonstrated by Charlie in the final lecture of this book, “Human Misjudgment Psychology,” is likely to be widely understood and applied in the future.

Charlie’s interests are not limited to contemplation; he also likes to get involved and pay attention to details. He has the largest private catamaran in the world, which he designed himself. He is also an excellent architect. He builds houses according to his preferences, participating in every detail from the initial blueprint design to the final implementation. For example, all the buildings he donated were personally designed by him, including the Stanford Graduate School of Business residential building, the Harvard-Westlake School science center, and the rare book research library at the Huntington Library and Gardens.

Charlie is naturally energetic. I first met Charlie in 1996 when he was 72 years old. It has been over a decade since then, and Charlie is now 86 years old. In these more than ten years, Charlie’s energy has not changed at all. He is always energetic and gets up early. Breakfast meetings always start at half past seven. Due to some dinner parties and social engagements, his sleep time may be less than the average person, but this does not affect his high energy. And his memory is astonishing; I have already forgotten the operational figures of BYD that I talked to him about many years ago, but he still remembers. At 86, his memory is better than mine as a young person. These are his innate advantages, but the exceptional qualities that make him successful are obtained through his efforts.

Charlie, to me, is not only a partner, but also a senior, a teacher, a friend, a model of success in business, and a role model in life. I have learned not only the principles of value investing from him, but also many principles of being a person. He made me understand that a person’s success is not accidental; timing is indeed important, but a person’s inner qualities are even more important.

Charlie likes to have breakfast meetings with people, usually at half past seven. I remember the first time I had breakfast with Charlie, I arrived on time and found that Charlie had already finished reading the newspaper for the day. Although there were still a few minutes left until half past seven, it made me feel uncomfortable to keep such a respected elderly person waiting for me. On the second meeting, I arrived about fifteen minutes early and found that Charlie was still sitting there reading the newspaper. On the third meeting, I arrived half an hour early, and Charlie was still reading the newspaper, as if he had never left that seat, waiting all year round. It wasn’t until the fourth time that I made up my mind and arrived an hour early, sitting there at half past six, and at 6:45, Charlie walked in leisurely, holding a stack of newspapers and sitting down without even noticing my presence. Afterward, I gradually learned that Charlie always arrives early for appointments. After arriving, he doesn’t waste time and starts reading the prepared newspaper. Since knowing about Charlie’s habit, whenever we have a meeting, I always arrive early and bring a newspaper, not disturbing each other until after half past seven when we have breakfast and chat together.

Occasionally, Charlie is late. One time, I brought a young entrepreneur from China to meet Charlie. Charlie was late by half an hour because he was rushing from a luncheon. When he arrived, Charlie sincerely apologized to both of us young people and explained in detail the reason for his lateness. He even suggested improvements to the valet parking service at the luncheon so that guests wouldn’t have to wait for 45 minutes. The young Chinese entrepreneur was both surprised and touched because it’s unlikely to find someone of Charlie’s stature who repeatedly apologizes to younger people for being late.

During my interactions with Charlie, another incident had a big impact on me. One year, Charlie and I attended a gathering out of town together. After the event ended, I had to rush back to New York and unexpectedly ran into Charlie at the airport terminal. For some reason, his massive body kept setting off the security alarm as he passed through the metal detector. Charlie had to go through security repeatedly, and after a while, he finally cleared the security. However, his flight had already taken off.

But Charlie wasn’t in a hurry. He took out a book from his bag and sat down to read, patiently waiting for the next flight. Coincidentally, my flight was also delayed, so I kept him company while waiting.

I asked Charlie, “You have your own private jet, and Berkshire Hathaway has a corporate jet. Why do you bother going to commercial airports and endure all the hassle?”

Charlie replied, “First, it’s a waste of fuel for me to fly alone on a private jet. Secondly, I feel that flying on commercial planes is safer.” But the true reason Charlie wanted to express was the third one: “What I’ve wanted in my whole life is to engage with life, I don’t want to isolate myself.”

What Charlie can’t stand the most is losing connection with the world because of having wealth, isolating himself in a room, isolated in a huge office taking up a whole floor. Meetings require elaborate preparations and passing through multiple levels of gatekeepers, making it difficult for anyone to reach him easily. This disconnects him from real life.

“As long as I have a book in my hands, I don’t feel like I’m wasting time.” Charlie always carries a book with him, even when sitting in the middle seat of the economy class. As long as he’s holding a book, he’s at peace. Once during a flight to Seattle for a board meeting, he sat in economy class as usual, and next to him was a young Chinese girl who was studying calculus throughout the flight. He was impressed by this Chinese girl because he found it hard to imagine an American girl of the same age having such focus to study amidst the noisy atmosphere of the plane. If he flew in a private jet, he would never have the opportunity to get close to these ordinary people’s stories.

Although Charlie is strict with himself, he is very generous and lenient towards the people he genuinely cares about and loves. He is not stingy with money and always hopes that others can benefit more. When traveling alone, whether for business or private matters, he always chooses to fly economy class. But when traveling with his wife and family, Charlie will take his own private jet. He explained, “My wife has raised so many children for me her whole life, she has sacrificed a lot, and her health is not good, so I must take care of her.”

Although Charlie did not graduate from Stanford University, he donated over 60 million dollars to the university because his wife is an alumna and a member of the board of trustees.

Once Charlie decides to do something, he can do it for a lifetime. For example, he served on the board of directors of the Harvard-Westlake School and a charity hospital in Los Angeles for 40 years. Charlie is a very generous sponsor for the charitable organizations he is involved in. And Charlie’s investment is not only money, but also a lot of time and energy, to ensure the successful operation of these organizations.

Charlie has studied the reasons for human failure throughout his life, so he has a profound understanding of the weaknesses of human nature. Based on this, he believes that people should demand strict requirements of themselves, constantly improve their cultivation, and overcome the weaknesses of human nature. This way of life is a moral requirement for Charlie. To outsiders, Charlie may seem like an ascetic, but to Charlie, this process is both rational and enjoyable, and can lead to a successful and happy life.

That’s Charlie’s uniqueness. But think about it, if Munger and Buffett were not so unique, they would not have created unprecedented achievements in the history of human investment together over the past 50 years. In the past 20 years, the interest in researching Buffett and Munger has become increasingly strong worldwide, and it may continue to escalate in the future. There are numerous books in Chinese and English, many of which provide unique insights. To be honest, it is too early for me to evaluate Munger’s thoughts based on my current abilities, because even today, every time I talk to Charlie and reread his speeches, I gain new insights. On the other hand, this also indicates that my understanding of his thoughts is still insufficient. However, over the years, Charlie’s words and deeds have allowed me to have a more intuitive understanding of his thoughts and character, and here I just want to share my own close observations and personal experiences with the readers. I sincerely hope that after carefully studying this book, readers will have a deeper understanding of the essence of Mungerism than I do, and thus gain greater help for their careers and lives.

I know that Charlie himself likes this book very much and thinks that it collects the essence of his thoughts and life experiences. In his later years, Charlie often quotes the following words from “Pilgrim’s Progress” by Christian the Truthseeker to conclude his speeches: “I leave my sword to the person who can wield it.” Through the publication of this book, I hope that more readers will have the opportunity to learn and understand Munger’s wisdom and character. I believe that every reader has the potential to become a fortunate swordsman through learning and practice.

In the years of getting along with Charlie, I often forget that he is an American. He is closer to the traditional Chinese literati that I understand. During my 20 years in the United States as a Chinese, I often ask myself: What is the soul and essence of Chinese culture? Objectively speaking, as Chinese who grew up after the May Fourth Movement, we basically have a negative attitude towards China’s tradition. After coming to the United States, I was fortunate enough to systematically study more than 100 original works that had a shaping effect on Western civilization during my time at Columbia University, covering literature, philosophy, science, religion, and art in various fields, starting from Greek civilization and extending to Europe and modern civilization. Later, thanks to the courses on Confucian culture and Islamic civilization provided by Columbia, I had a fresh understanding and understanding of China’s Confucian culture. However, the textbooks at that time were all in English, and my classical Chinese cultivation was not enough, so many requests for original works could only be achieved through reading English translations, which was quite helpless.

Throughout the process of reading and contemplation, I increasingly realize that the soul of Chinese civilization is actually the literati culture. The values ​​embodied by the literati reflect a process of self-improvement and self-transcendence. The “Daxue” says: “Cultivate oneself, manage the family, govern the country, and pacify the world.” This set of values ​​has been widely expounded in various schools of Confucianism, and this should be considered the core soul value of Chinese civilization. The carrier of the literati civilization is the imperial examination system. The imperial examination system not only helps followers of Confucianism shape their own character, but also provides them with a platform to showcase their talents, allowing them to enter the government and even reach the highest level of society through the imperial examinations, thereby being able to apply their knowledge and realize their own value.

However, after the end of the imperial examination system, the spirit of the literati lost its concrete reality and became disoriented. Especially in today’s highly developed commercial society, Chinese intellectuals with literati sentiments are often more confused about their own existence and their ideal values. In a commercial society where tradition is lost, is the spirit of the literati still applicable? In the late Ming Dynasty, capitalism began to sprout in China, and businessmen at that time proposed the idea of ​​”business talent and literati spirit” to demonstrate their ideals. Today, the power of the commercial market has become dominant in society, and I think this ideal is more likely to become a reality.

Charlie can be said to be the best example of the “business talent and literati spirit”. Firstly, Charlie is extremely successful in the business field, and his achievements with Warren Buffett can be said to be unparalleled. However, in deep engagement with Charlie, I discovered that he is fundamentally a moral philosopher, a scholar. He reads extensively, has extensive knowledge, and is genuinely concerned about his own moral cultivation and ultimate care for society. Like Confucius, Charlie’s value system permeates from within and advocates achieving the realm of a saint through personal cultivation in order to help others.

As mentioned earlier, Charlie has very high demands on himself. Although he is very wealthy, he lives a life comparable to that of a ascetic. The house he currently lives in is still the ordinary house he bought decades ago. When he travels, he always flies economy class, and he always arrives 45 minutes early for appointments, and even apologizes specifically for occasional lateness. After achieving great success in career and wealth, Charlie has also devoted himself to charity and benefiting people all over the world.

Charlie is someone who has achieved success purely through wisdom, which is undoubtedly an inspiring example for Chinese intellectuals. His success is entirely based on investment, and investment success is completely dependent on self-cultivation and learning, which has nothing to do with the power and money transactions or hidden rules we see in society today. As a person of integrity and kindness, he has achieved tremendous success in this commercial society using the cleanest method and fully utilizing his wisdom. In today’s market economy, can Chinese intellectuals who are filled with literati sentiments also achieve success in secular society and realize their own ideal values through learning and self-cultivation?

I sincerely hope that Chinese readers will be interested in Charlie and his book. Charlie greatly admires Confucius, especially his spirit of teaching and enlightening. Charlie himself is happy and adept at teaching others tirelessly. This book gathers Charlie’s lifelong learning and wisdom, and shares it with everyone without reservation. Charlie is full of confidence in China’s future and also admires Chinese culture. The great commercial achievements of Confucian civilization in Asia in recent decades have given more and more people confidence in the revival of Chinese civilization. After nearly a hundred years since the May Fourth Movement, today, perhaps we no longer need to be entangled in the debate between “Chinese learning” and “Western learning”, but only need to openly learn and accept useful knowledge from all over the world, while peacefully placing our hearts within the moral value system that Chinese people have respected and upheld for thousands of years.

Sometimes I wonder, if Confucius were born again in modern-day America, Charlie would probably be his best incarnation. If Confucius returned to today’s commercial China after 2000 years, what he advocated would probably be: rectify one’s heart, cultivate oneself, manage the family, become prosperous, and benefit the world!

…

Within a year from the publication of the mainland edition of this book, many things happened that deepened my respect for Charlie. In early 2010, Nancy, Charlie’s wife of fifty years, unfortunately passed away. A few months later, an accident caused Charlie to lose 90% of the vision in his remaining right eye, almost rendering him blind. For an 86-year-old man who values reading and thinking more than life itself, the consecutive blows of these two events can be imagined. However, what I saw in Charlie was still the same rational, objective, positive, and wise person. He neither complained about heaven nor blamed others, nor did he give up in a negative manner, but actively sought ways to cope in the midst of calmness. He tried various reading machines and even considered learning Braille at one point. Later miraculously, his vision in the right eye recovered by 70%. We were all overjoyed! However, I also firmly believe that even if Charlie were to lose all his vision, he would still find ways to make his life meaningful and efficient.

Regardless of prosperity or adversity, maintaining an objective and positive mindset – that is Charlie.

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