Charlie Munger

Munger starts by saying, well, I think I've been in the top 5% of my age cohort all my life and understanding the power of incentives and all my life I underestimated it and I

Never a year passes but I get some surprise that pushes my limit a little farther.

This first really hit me between the eyes when a friend of our family had a

Super athlete, super student son who flew off a carrier in the North Atlantic and never came back.

And his mother, who was a very sane woman, just never believed he was dead.

Big shot businessmen get into these waves of social proof.

Do you remember some years ago when one oil company bought a fertilizer company?

And every other major oil company practically ran out and bought a fertilizer company.

And there was no more damn reason for all these oil companies to buy fertilizer companies.

But they didn't know exactly what to do.

And if Exxon was doing it, it was good enough for Mobil or vice versa.

And of course, I think they're all gone now.

It was a total disaster.

Stress-induced mental changes.

Here, my favorite example is the great Pavlov, and he had all these dogs in cages which had all been conditioned into changed behaviors.

And the great Leningrad flood came, and the

just went right up, and the dog's in a cage.

And the dog had as much stress as you can imagine a dog ever having.

And the water receded in time to save some of the dogs.

And Pavlov noted that they had a total reversal of their conditioned personality.