How could economics not be behavioral? If it isn't behavioral, what the hell is it?
Charlie MungerRead
If all you needed to do is to figure out what company is better than others, everyone would make a lot of money. But that is not the case. They keep raising the prices to the point when the odds change.
Interpretation
What this quote means
Success in business requires more than just identifying good companies; external factors continually change the landscape.
Charlie Munger highlights the complexity of financial markets, illustrating that merely knowing which companies are superior doesn't guarantee success. External factors, such as rising prices and market dynamics, complicate the pursuit of profit, making it clear that investment success relies on deeper analysis and adaptability, not just surface-level insights.
Themes
BusinessInvestingSuccessMarket DynamicsPricing
In practice
Example use cases
During a financial seminar discussing market strategies.
More from Charlie Munger
All quotes βThe world of derivatives is full of holes that very few people are really aware of. It's like hydrogen and oxygen sitting on the corner waiting for a little flame.
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I believe in the discipline of mastering the best that other people have ever figured out. I don't believe in just sitting down and trying to dream it all up yourself. Nobody's that smart.
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Economics is in many respects the queen of the soft sciences. It's expected to be better than the rest. It's my view that economics is better at the multi-disciplinary stuff than the rest of the soft science. And it's also my view that it's still lousy.
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Look at this generation, with all of its electronic devices and multitasking. I will confidently predict less success than Warren, who just focused on reading.
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Economics profession, they've been - they've been confident in various formulas, but economics is not physics. The same formula that works in one decade doesn't work in the next. Economics is a difficult subject.
Charlie MungerRead
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