Charlie Munger

Well, you may find it five years after you bought it. These things may work into it or your own understanding may get better. But when you know you have an edge, you should bet heavily. You know you're right. And most people, they don't teach that in business school. It's insane. Of course, you've got to bet heavily on your best bets.

Well, you may find it five years after you bought it. These things may work into it or your own understanding may get better. But when you know you have an edge, you should bet heavily. You know you're right. And most people, they don't teach that in business school. It's insane. Of course, you've got to bet heavily on your best bets.

You work at it. You do a lot of reading and thinking and visiting.

You work at it. You do a lot of reading and thinking and visiting.

There was a lot of low-hanging fruit in the early days of our operation. You don't have any low-hanging fruit that is easy to recognize.

There was a lot of low-hanging fruit in the early days of our operation. You don't have any low-hanging fruit that is easy to recognize.

keep our families safe and take a good job for our investors and so on. We had similar attitudes. Yeah. Did it change over the decades? No. Warren still cares more about the safety of his personal shelters than he cares about anything else. If we used a little bit more leverage throughout, we'd have three times as much now. And it wouldn't have been that much more risk either.

keep our families safe and take a good job for our investors and so on. We had similar attitudes. Yeah. Did it change over the decades? No. Warren still cares more about the safety of his personal shelters than he cares about anything else. If we used a little bit more leverage throughout, we'd have three times as much now. And it wouldn't have been that much more risk either.

And we just never wanted to give them at least a chance of screwing up our basic shelter position.

And we just never wanted to give them at least a chance of screwing up our basic shelter position.

No, I think it would have worked fine. Does Warren think that? Very easy. The situation lends itself to, if you were intelligent, just milking it out.

No, I think it would have worked fine. Does Warren think that? Very easy. The situation lends itself to, if you were intelligent, just milking it out.

It's automatically leveraged. You open a new store with no capital, of course it's leveraged. Who wouldn't want a business with no inventories?

It's automatically leveraged. You open a new store with no capital, of course it's leveraged. Who wouldn't want a business with no inventories?

A lot of people now do it who manufacture something that is terribly strong, and they're just forcing the suppliers to carry all the inventory.

A lot of people now do it who manufacture something that is terribly strong, and they're just forcing the suppliers to carry all the inventory.

It helps if you like one another and enjoy working together. We do. Yeah. But I don't use any one formula. A lot of partnerships that work well for a long time happen because one's good at one thing and one's good at another. They just naturally divide it. And each one likes what he's doing.

It helps if you like one another and enjoy working together. We do. Yeah. But I don't use any one formula. A lot of partnerships that work well for a long time happen because one's good at one thing and one's good at another. They just naturally divide it. And each one likes what he's doing.

Now, in Costco's case, they had Jeff Brotman, who's very smart, but not a retailer, and Jim Senegal, and they divided it up. And they had originally agreed that Brotman would be the chairman and CEO, because he was his ID, he founded the whole thing. But Senegal decided, no, I have to be the CEO. So it was a big, unfortunate board meeting, a big internal struggle. And Brotman moved aside.

Now, in Costco's case, they had Jeff Brotman, who's very smart, but not a retailer, and Jim Senegal, and they divided it up. And they had originally agreed that Brotman would be the chairman and CEO, because he was his ID, he founded the whole thing. But Senegal decided, no, I have to be the CEO. So it was a big, unfortunate board meeting, a big internal struggle. And Brotman moved aside.