Charlie Munger

Mark Cuban says the real money is made in a bear market, when prices turn and a buyer has cash ready.

He points to Charlie Munger and Warren Buffett, who he says would go a couple of years without investing at all, and he has tried to do the same. During COVID he started buying as the market fell, and he says he crushed it. He says AI-related stocks are going to the moon, with a lot of debt behind the move, and the approach now is patience: invest a little for fun, hold cash, and wait. When the run turns, he says, that is when the real magic happens and the real money is made.

David Senra, reading Charles R. Morris's The Tycoons, says John D. Rockefeller got the oil refinery by pushing the Clark partners into a breakup and then outbidding them. As the friction grew, the Clarks kept threatening to dissolve the partnership. Rockefeller asked whether they meant it. They said yes. The next day they read a dissolution notice in the local newspaper, and their partner Andrews had sided with Rockefeller. At the auction, the 25-year-old Rockefeller outbid them. The bidding hit $72,000. A partner said the price was too high and handed the refinery over. The next year the refinery had sales of $1.2 million, in the 1860s.

Senra says Rockefeller often paid a fair price, and o

Charlie Munger almost worships reason. Charlie Munger said you can argue that Henry Singleton did too, and certainly Warren Buffett does too. The people Charlie Munger knows that are good feel you have a duty to become as wise as you can by constantly studying and thinking about it.

Positioning happens earlier than decisions and determines which options will be available when the decision arrives. Berkshire Hathaway never found itself forced by circumstances into a series of bad decisions. Buffett and Munger wanted to remain in control no matter what happened in the world. People do not need to be smarter than others to outperform them if they can outposition them.

Investors should find the exceptional few businesses and then concentrate behind them. Buffett's 20-card punch idea illustrates the point well. With only 20 investment opportunities in life, one waits longer, studies harder, and acts only when an opportunity is worth using one of the 20 chances.

Concentrating almost 100% of the playing time on his top seven players allowed them to get better and better during all the extra playing time. John Wooden had the best basketball coaching record in the world and nobody else was even close. Applying the Wooden system by giving power to a Wooden or Buffett works like gangbusters. Investors can find a mini Wooden or a mini Singleton or a mini Buffett and benefit when they have a hell of a run.

David Senra, reading Charlie Munger's account, says Sam Walton beat bigger retailers by first knocking out small-town merchants with a more efficient system, and only then taking on the big chains.

Munger compared him to a prizefighter who wanted a record good enough for the finals, so he went out and fought 42 palookas. The result was knockout after knockout, 42 times. Walton might not have been able to tackle some titans head on at the time. With the better system he broke other small-town merchants, time after time. Then, as he got bigger, he started destroying the big boys.

The strategy was very shrewd. Scale and fanaticism combined to be very powerful.

David Senra says Sam Walton's idea behind Walmart was absurdly simple: buy cheap, sell low every day, and do it with a smile. Making money was only a game, a test of his imagination and expertise to see how far he could drive a business concept. Wall Street had a hard time getting the drift of that.

The passage illustrates Charlie Munger's idea that you should find a simple idea and take it very seriously. Walton wanted to wake up every day, work on Walmart, and change his mind when new information arrived, turning from going left to going right. He was a genius in business with an iron mind, unwilling to compromise carefully thought out principles, and still flexible. If a course did not w

David Senra says Warren Buffett gave Henry Singleton the best operating and capital deployment record in American business. The combined achievements of the top 100 business school graduates would not match Singleton's record, and Buffett called it a crime that business schools did not study him.

Charlie Munger called Singleton a genius and an awesome intellect, put that raw intelligence in the top one one thousandth of one percent, and called him the smartest single human being he had ever known, a lot smarter than Buffett or Munger. The respect came from a very simple reason: Singleton was a genius.

Munger had an up close view of both and separated raw intelligence from time spent thinki

David Senra, reading the book's account, says Henry Singleton compounded Teledyne at an extraordinary 20.4% a year for almost 30 years. A dollar invested with Singleton in 1963 was worth 180 by 1990, when he stepped down. Charlie Munger called Singleton's financial returns a mile higher than anyone else's and utterly ridiculous.

He founded the conglomerate Teledyne in the early 1960s. Conglomerates were the internet stocks of the 1960s, and a large number of them went public, but Singleton ran a very unusual conglomerate. Long before he became popular, he bought over 90% of Teledyne's shares. He avoided dividends, emphasized cash flow over reported earnings, ran a famously decentralized org

David Senra says entrepreneurs chase growth over durability because growth is easy to measure and durability is not. Reading Peter Thiel and Blake Masters, he gives Thiel's test of a great business: the ability to generate cash flows in the future. The value of a business today is the sum of all the money it will make in the future. Most of a tech company's value comes at least 10 to 15 years out. Senra's examples are Apple, a multi-trillion dollar company founded in 1976, 50 years earlier, and NVIDIA, where the value arrived 25 to 30 years in rather than 10 to 15. He had just been reading that Jensen has been running NVIDIA for 33 years.

Charlie Munger thought durability was a first-rate v

David Senra says James J. Hill's advantage was that he understood the railroad as an operating business, not as a financial instrument. James J. Hill is the only person in American history to found a railroad and not go bankrupt. Most of his competitors came from finance or speculation. They were often trying to build railroads to capture land grants, sell bonds, manipulate stock, or reorganize bankrupt systems. Hill came from freight, warehousing, and transportation logistics. When he finally got control of a railroad, he understood the customer, the cargo, the routes, the costs, the bottlenecks, and the economics from the inside.

Reading James McGrath Morris, Senra says the same edge show

David Senra, reading Tae Kim's The Nvidia Way, says Jensen Huang has no five-year plan because he treats strategy as action, not as words. Nvidia does not run a periodic planning cycle. The world is a living thing, so the company plans continuously.

The line is one of the favorites in the book, and it matches Henry Singleton. Senra came to Singleton because Charlie Munger called him the smartest person he ever met, and Warren Buffett said it is a crime that business schools do not study him. Singleton's plan was to stay flexible: come to work every day and steer the boat that day instead of planning far ahead.

Huang shares the stance. The same line is how Michael Bloomberg built his compan

David Senra says the people James Dyson admires are obsessive, impractical, product-driven enthusiasts, and Dyson belongs in that group. Intense interest in any subject is indispensable if you are really going to excel, the line from Charlie Munger, and working only on what you care about that much is an unfair advantage. Many people who reach the top of their fields did exactly that.

Car companies used to be run by people who love cars, knew how to make cars themselves, and were always trying to make them better. Retail companies used to be run by people who love shops. 100 years ago, George Safford Parker was nutty about fountain pens. The same obsession shows up when someone never wants