Poor Charlie's Almanack Summary: Wit & Wisdom of Charlie Munger

This is a book summary of Poor Charlie’s Almanack: The Wit and Wisdom of Charles T. Munger, Expanded Third Edition (Amazon):

Here’s a short video of Charlie Munger and Warren Buffett talking about the book:

Quick Housekeeping:

All content in quotation marks is from the original author unless otherwise stated.
All content is grouped into my own themes (not the author’s chapters).
I’ve added emphasis in bold for readability/skimmability.
For this particular summary, I’ve focused on Charlie Munger’s worldly wisdom and not his investment advice.

Book Summary Contents: Click a link here to jump to a section below

About Poor Charlie’s Almanack
Life Advice & Intense Interest
Worldly Wisdom & Lifelong Learning
Ideology & Iron Prescription
Reality, Complexity, & Paradox
Multidisciplinarity, Synthesis, & Latticework
Mental Models & Checklists
Mental Model Disciplines
25+ Mental Model Examples
25 Psychological Tendencies
10 Investing Principles

Poor Charlie's Almanack Book Charlie Munger

**The Wit & Wisdom of Charlie Munger: Poor Charlie’s Almanack (Book Summary)**

About Poor Charlie’s Almanack

“The real joy of studying Warren and Charlie is not that one can learn a great deal about how to compound money at a high rate for an extended period—though this is certainly a nice side benefit! Rather, by absorbing their teachings, one will gain a far deeper understanding of the human condition, the state of the world, how to think rationally, and, most importantly, how to better lead a life of integrity, happiness, and kindness (here’s a hint: these characteristics are intertwined).” — Whitney Tilson

Introduction by Peter D. Kaufman:

“You may also arrive at a better understanding of life as well, all thanks to the wit, wisdom, speeches, and writings of Charlie Munger—this generation’s answer to Benjamin Franklin. Charlie’s unique worldview, what he calls his ‘multidisciplinary’ approach, is a self-developed model for clear and simple thinking—yet his concepts and models are anything but simplistic. Notice how well Charlie’s thinking stands the test of time: The earliest talk in this collection is almost twenty years old, yet it is as relevant today as the day he first delivered it. As you will soon discover, Charlie’s observations and conclusions are based on fundamental human nature, basic truths, and core principles from a wide range of disciplines.”
“The quotes, talks, and speeches presented here are rooted in the old-fashioned Midwestern values for which Charlie has become known: lifelong learning, intellectual curiosity, sobriety, avoidance of envy and resentment, reliability, learning from the mistakes of others, perseverance, objectivity, willingness to test one’s own beliefs, and many more … Charlie uses humor, inversions (following the directive of the great algebraist, Jacobi, to ‘Invert, always invert’), and paradox to provide sage counsel about life’s roughest challenges.”
“He well knows, and wisely exploits, the traditional role of the storyteller as purveyor of complex and detailed information. As a result. his lessons hang together in a coherent ‘latticework’ of knowledge, available for recall and use when needed.”
“His mental models, drawn from every discipline imaginable, recur repeatedly … They center on fundamental truth, human accomplishment, human foibles, and the arduous path to wisdom.”

Life Advice & Intense Interest

“Above all, live with change and adapt to it.”

On Life Advice:

“Spend each day trying to be a little wiser than you were when you woke up. Discharge your duties faithfully and well.”

“Step-by-step you get ahead, but not necessarily in fast spurts. But you build discipline by preparing for fast spurts. Slug it out one inch at a time, day-by-day, and at the end of the day—if you live long enough—like most people, you will get out of life what you deserve.”
“Life and its various passages can be hard, brutally hard. The three things I have found helpful in coping with its challenges are: Have low expectations. Have a sense of humor. Surround yourself with the love of friends and family.”

On Interest/Passion:

“Intense interest in any subject is indispensable if you’re really going to excel in it. I could force myself to be fairly good in a lot of things, but I couldn’t excel in anything in which I didn’t have an intense interest.”

“You need to have a passionate interest in why things are happening. That cast of mind, kept over long periods, gradually improves your ability to focus on reality. If you don’t have that cast of mind, you’re destined for failure even if you have a high l.Q.”
“I’m passionate about wisdom. I’m passionate about accuracy and some kinds of curiosity. Perhaps I have some streak of generosity in my nature and a desire to serve values that transcend my brief life. But maybe I’m just here to show off. Who knows?”

Worldly Wisdom & Lifelong Learning

“The acquisition of wisdom is a moral duty. It’s not something you do just to advance in life. And there’s a corollary to that idea that is very important. It requires that you’re hooked on lifetime learning.”

On Worldly Wisdom:

“Each of us must figure out his or her own lifestyle … But, whatever you decide, I think it’s a huge mistake not to absorb elementary worldly wisdom if you’re capable of doing it because it makes you better able to serve others, it makes you better able to serve yourself, and it makes life more fun. So if you have an aptitude for doing it, I think you’d be crazy not to. Your life will be enriched—not only financially, but in a host of other ways—if you do.”

“You don’t have to be brilliant, only a little bit wiser than the other guys, on average, for a long, long time.”
“How many insights do you need? Well, I’d argue that you don’t need many in a lifetime.”
“It makes sense to load up on the very few good insights you have instead of pretending to know everything about everything at all times.”

On Lifelong Learning:

“In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time—none, zero.”

“Nothing has served me better in my long life than continuous learning.”
“I constantly see people rise in life who are not the smartest, sometimes not even the most diligent. But they are learning machines. They go to bed every night a little wiser than they were that morning.”
“The game is to keep learning, and I don’t think people are going to keep learning who don’t like the learning process.”
“Just as civilization can progress only when it invents the method of invention, you can progress only when you learn the method of learning.”
“The more basic knowledge you have, the less new knowledge you have to get.”

On Learning from Others:

“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.”

“The more hard lessons you can learn vicariously rather than through your own hard experience, the better.”
“If you go through life making friends with the eminent dead who had the right ideas, I think it will work better for you in life and work better in education.”
“There is no better teacher than history in determining the future … There are answers worth billions of dollars in a $30 history book.”
“I merely sought to learn from my betters a few practical mental tricks that should help me avoid some of the worst miscognitions common in my age cohort, and to pass on my mental tricks only to a few people who could easily learn from me because they already almost knew what I was telling them.”

Ideology & Iron Prescription

“If you want to end up wise, heavy ideology is very likely to prevent that outcome.”

On Ideology:

“Heavy ideology is one of the most extreme distorters of human cognition … If you get a lot of heavy ideology young—and then you start expressing it—you are really locking your brain into a very unfortunate pattern. And you are going to distort your general cognition.”

“You want to be very careful with intense ideology. It presents a big danger for the only mind you’re ever going to have.”
“Intense political animosity should be avoided because it causes much mental malfunction, even in brilliant brains.”
“Professors of superstrong, passionate, political ideology, whether on the left or right, should usually be avoided. So also for students. Best-form multidisciplinarity requires an objectivity such passionate people have lost, and a difficult synthesis is not likely to be achieved by minds in ideological fetters.”

Iron Prescription:

“I have what I call an ‘iron prescription’ that helps me keep sane when I drift toward preferring one intense ideology over another. I feel that I’m not entitled to have an opinion unless I can state the arguments against my position better than the people who are in opposition. I think that I am qualified to speak only when I’ve reached that state.”

Reality, Complexity, & Paradox

“I could already see that real-world problems didn’t neatly lie within territorial boundaries. They jumped right across. And I was dubious of any approach that, when two things were inextricably intertwined and interconnected, would try and think about one thing but not the other.”

On Reality:

“Reality is taking to anyone who will listen … The ethos of hard science does not say ‘take what you wish’ but ‘learn it all to fluency, like it or not.'”

“If there are twenty factors and they interact some, you’ll just have to learn to handle it—because that’s the way the world is.”
“Only an interdisciplinary approach will correctly deal with reality.”
“Reality is always more ridiculous than what I’m going to tell you.”
“The human mind is not constructed so that it works well without having reasons. You’ve got to hang reality on a theoretical structure with reasons. That’s the way it hangs together in usable form so that you’re an effective thinker.”

On Complexity:

“You have to realize the truth of biologist Julian Huxley’s idea that, ‘Life is just one damn relatedness after another.’ So you must have the models, and you must see the relatedness and the effects from the relatedness.”

“What I’m against is being very confident and feeling that you know, for sure, that your particular action will do more good than harm. You’re dealing with highly complex systems wherein everything is interacting with everything else.”
“A rough rule in life is that an organization foolish in one way in dealing with a complex system is all too likely to be foolish in another.”
“The way complex adaptive systems work, and the way mental constructs work, problems frequently become easier to solve through ‘inversion.’ If you turn problems around into reverse, you often think better.”

On Paradox:

“One should recognize reality even when one doesn’t like it, indeed, especially when one doesn’t like it. Also, I think one should cheerfully endure paradox that one can’t remove by good thinking.”

“If the mathematicians can’t get the paradox out of their system when they’re creating it themselves, the poor economists are never going to get rid of paradoxes, nor are any of the rest of us. It doesn’t matter. Life is interesting with some paradox.”

Multidisciplinarity, Synthesis, & Latticework

“The best and most practical wisdom is elementary academic wisdom. But there is one extremely important qualification: You must think in a multidisciplinary manner.”

On a Multidisciplinary Approach:

“When I urge a multidisciplinary approach—that you’ve got to have the main models from a broad array of disciplines and you’ve got to use them all—I’m really asking you to ignore jurisdictional boundaries. And the world isn’t organized that way … If you want to be a good thinker, you must develop a mind that can jump the jurisdictional boundaries.”

“I went through life constantly practicing a multi-disciplinary approach.”
“Without this system of getting the main models and using them together in a multimodular way, you’ll screw up time after time after time.”
“It never ceases to amaze me to see how much territory can be grasped if one merely masters and consistently uses all the obvious and easily learned principles.”
“You must know the big ideas in the big disciplines and use them routinely—aIl of them, not just a few.”
“You’ve got to know all the big ideas in all the disciplines more fundamental than your own. You can never make any explanation that can be made in a more fundamental way in any other way than the most fundamental way.”
“Rational organization of multidisciplinary knowledge is forced by making mandatory (1) full attribution for cross-disciplinary takings and (2) mandatory preference for the most fundamental explanation. This simple idea may appear too obvious to be useful, but there is an old two-part rule that often works wonders in business, science, and elsewhere: (1) Take a simple, basic idea and (2) take it very seriously.”
“It’s kind of fun to sit there and outthink people who are way smarter than you are because you’ve trained yourself to be more objective and multidisciplinary.”
“The happier mental realm I recommend is one from which no one willingly returns.”
“If you skillfully follow the multidisciplinary path, you will never wish to come back. It would be like cutting off your hands.”

On Synthesis:

“We need for best results to have multidisciplinary coverage of immense amplitude, with all needed skills raised to an ever-maintained practice-based fluency, including considerable power of synthesis at boundaries between disciplines.”

“I had an early and extreme multidisciplinary cast of mind. I couldn’t stand reaching for a small idea in my own discipline when there was a big idea right over the fence in somebody else’s discipline. So I just grabbed in all directions for the big ideas that would really work. Nobody taught me to do that; I was just born with that yen. I also was born with a huge craving for synthesis.”
“Once you get into the joys of synthesis, you immediately think, ‘Do these things interact?’ Of course they interact.”
“Whitehead spoke of ‘the fatal unconnectedness of academic disciplines,’ wherein each professor didn’t even know the models of the other disciplines, much less try to synthesize those disciplines with his own. I think there’s a modern name for this approach that Whitehead didn’t like, and that name is ‘bonkers.'”
“Academic psychology, while it is admirable and useful as a list of ingenious and important experiments, lacks intradisciplinary synthesis. In particular, not enough attention is given to lollapalooza effects coming from combinations of psychological tendencies … Second, there is a truly horrible lack of synthesis blending psychology and other academic subjects.”
“People take four courses in economics, go to business school, have all these I.Q. points, and write all these essays, but they can’t synthesize worth a damn.”

On the Latticework:

“What is elementary, worldly wisdom? Well, the first rule is that you can’t really know anything if you just remember isolated facts and try and bang ’em back. If the facts don’t hang together on a latticework of theory, you don’t have them in a useable form.”

“You’ve got to have models in your head. And you’ve got to array your experience—both vicarious and direct—on this latticework of models. You may have noticed students who just try to remember and pound back what is remembered. Well, they fail in school and fail in life.”
“I’ve long believed that a certain system—which almost any intelligent person can learn—works way better than the systems that most people use. What you need is a latticework of mental models in your head. And, with that system, things gradually get to fit together in a way that enhances cognition.”
“You have to learn many things in such a way that they’re in a mental latticework in your head and you automatically use them the rest of your life. If many of you try that, I solemnly promise that one day most will correctly come to think, ‘Somehow I’ve become one of the most effective people in my whole age cohort.’ And, in contrast, if no effort is made toward such multidisciplinarity, many of the brightest of you who choose this course will live in the middle ranks, or in the shallows.”

Mental Models & Checklists

“The first rule is that you’ve got to have multiple models—because if you have just one or two that you’re using, the nature of human psychology is such that you’ll torture reality so that it fits your models, or at least you’ll think it does.”

On Mental Models:

“The models have to come from multiple disciplines—because all the wisdom of the world is not to be found in one little academic department.”

“You don’t have to know it all. Just take in the best big ideas from all these disciplines.”
“Because the really big ideas carry about 95% of the freight, it wasn’t at all hard for me to pick up about 95% of what I needed from all the disciplines and to include use of this knowledge as a standard part of my mental routines. Once you have the ideas, of course, you must continuously practice their use.”
“Fortunately, it isn’t that tough—because eighty or ninety important models will carry about ninety percent of the freight in making you a worldly-wise person. And, of those, only a mere handful really carry very heavy freight.”
“You have to know how the models interact.”
“(To win in) the game of life, get the needed models into your head and think it through forward and backward.”
“Just as a man working with a tool has to know its limitations, a man working with his cognitive apparatus has to know its limitations.”
“‘The man who needs a new machine tool and hasn’t bought it is already paying for it’ … also applies, I believe, to thinking tools. If you don’t have the right thinking tools, you, and the people you seek to help, are already suffering from your easily removable ignorance.”
“When a better tool (idea or approach) comes along, what could be better than to swap it for your old, less useful tool?”
“If a man has a vast set of skills over multiple disciplines, he, by definition, carries multiple tools and, therefore, will limit bad cognitive effects from man-with-a-hammer tendency. Moreover, when he is multidisciplinary enough to absorb from practical psychology the idea that all his life he must fight bad effects from both the tendencies I mentioned, both within himself and from others, he has taken a constructive step on the road to worldly wisdom.”

On Checklists:

“You’ve got to use those tools checklist-style because you’ll miss a lot if you just hope that the right tool is going to pop up unaided whenever you need it. But if you’ve got a full list of tools and go through them in your mind, checklist-style, you will find a lot of answers that you won’t find any other way.”

“How can smart people so often be wrong? They don’t do what I’m telling you to do: use a checklist to be sure you get all the main models and use them together in a multimodular way.”
“You should not only possess wide-ranging elementary wisdom but also go through mental checklist routines in using it. There is no other procedure that will work as well.”
“Take all the main models from psychology and use them as a checklist in reviewing outcomes in complex systems.”
“I was using a simple search engine in my mind to go through checklist-style, and I was using some rough algorithms that work pretty well in a great many complex systems.”

Mental Model Disciplines

“To this day, I have never taken any course, anywhere, in chemistry, economics, psychology, or business.”

Biology & Physiology:

“All of us are programmed by our genetic makeup to be much the same.”

“Biological creatures ordinarily prefer effort minimization in routine activities and don’t like removals of long-enjoyed benefits.”

Science & Engineering:

“The models that come from hard science and engineering are the most reliable models on this Earth.”

“Hard science has, by a wide margin, the best record for both avoiding unidisciplinary folly and making user-friendly a big patch of multidisciplinary domain.”
“The engineering idea of a backup system is a very powerful idea. The engineering idea of breakpoints—that’s a very powerful model, too. The notion of a critical mass—that comes out of physics—is a very powerful model.”

Mathematics & Accounting:

“You’ve got to be able to handle numbers and quantities—basic arithmetic.”

“The great useful model, after compound interest, is the elementary math of permutations and combinations.”
“The Fermat/Pascal system is dramatically consonant with the way that the world works. And it’s fundamental truth. So you simply have to have the technique.”
“If you don’t get this elementary, but mildly unnatural, mathematics of elementary probability into your repertoire, then you go through a long life like a one-legged man in an ass-kicking contest.”
“You have to know enough about (accounting) to understand its limitations—because although accounting is the starting place, it’s only a crude approximation.”

Economics:

“Economics is better at the multidisciplinary stuff than the rest of the soft science.”

“I find it quite useful to think of a free market economy—or partly free market economy—as sort of the equivalent of an ecosystem … Just as in an ecosystem, people who narrowly specialize can get terribly good at occupying some little niche. Just as animals flourish in niches, similarly, people who specialize in the business world—and get very good because they specialize—frequently find good economics that they wouldn’t get any other way.”
“And once we get into microeconomics, we get into the concept of advantages of scale.”
“The great lesson in microeconomics is to discriminate between when technology is going to help you and when it’s going to kill you.”

Psychology:

“Of the models that people ought to have in useful form and don’t, perhaps the most important lie in the area of psychology.”

“I sought good judgment mostly by collecting instances of bad judgment, then pondering ways to avoid such outcomes.”
“All human systems are gamed, for reasons rooted deeply in psychology, and great skill is displayed in the gaming because game theory has so much potential.”
“Psychological knowledge improves persuasive power and, like other power, it can be used for good or ill.”
“The perceptual apparatus of man has shortcuts in it. The brain cannot have unlimited circuitry. So someone who knows how to take advantage of those shortcuts and cause the brain to miscalculate in certain ways can cause you to see things that aren’t there.”
“Psychological tendencies tend to be both numerous and inseparably intertwined, now and forever, as they interplay in life.”
“The elementary part of psychology—the psychology of misjudgment, as I call it—is a terribly important thing to learn. There are about twenty little principles.”
“Man is easily fooled, either by the cleverly thought out manipulation of man, by circumstances occurring by accident, or by very effective manipulation practices that man has stumbled into during ‘practice evolution’ and kept in place because they work so well.”
“Man’s—often wrong but generally useful—psychological tendencies are quite numerous and quite different. The natural consequence of this profusion of tendencies is the grand general principle of social psychology: cognition is ordinarily situation-dependent so that different situations often cause different conclusions, even when the same person is thinking in the same general subject area.”
“In social psychology, the more people learn about the system the less it is true, and this is what gives the system its great value as a preventer of bad outcomes and a driver of good outcomes.”
“I now use a kind of two-track analysis. First, what are the factors that really govern the interests involved, rationally considered? And second, what are the subconscious influences where the brain at a subconscious level is automatically forming conclusions in various ways—which, by and large, are useful—but which often malfunction? One approach is rationality … evaluating the real interest, the real probabilities, and so forth. And the other is to evaluate the psychological factors that cause subconscious conclusions—many of which are wrong.”

25+ Mental Model Examples

For more mental models, check out: 25 Psychological Tendencies from “The Psychology of Human Misjudgment” by Charlie Munger (Speech Summary)

Lollapalooza Effects:

“The most important thing to keep in mind is the idea that especially big forces often come out of these one hundred models. When several models combine, you get lollapalooza effects; this is when two, three, or four forces are all operating in the same direction. And, frequently, you don’t get simple addition. It’s often like a critical mass in physics where you get a nuclear explosion if you get to a certain point of mass—and you don’t get anything much worth seeing if you don’t reach the mass. Sometimes the forces just add like ordinary quantities and sometimes they combine on a breakpoint or critical-mass basis … Really big effects, lollapalooza effects, will often come only from large combinations of factors (factors which reinforce and greatly amplify each other).”

Inversion:

“‘Invert, always invert,’ Jacobi said. He knew that it is in the nature of things that many hard problems are best solved when they are addressed backward … It is not enough to think problems through forward. You must also think in reverse.”

Circle of Competence:

“You have to figure out what your own aptitudes are. If you play games where other people have the aptitudes and you don’t, you’re going to lose. And that’s as close to certain as any prediction that you can make. You have to figure out where you’ve got an edge. And you’ve got to play within your own circle of competence … Rise quite high in life by slowly developing a circle of competence—which results partly from what they were born with and partly from what they slowly develop through work … In effect, you’ve got to know what you know and what you don’t know. What could possibly be more useful in life than that?”

Compound Interest:

“Understanding both the power of compound interest and the difficulty of getting it is the heart and soul of understanding a lot of things.”

Opportunity Cost:

“Opportunity cost is a superpower, to be used by all people who have any hope of getting the right answer.”

Competitive Destruction:

“When technology moves as fast as it does in a civilization like ours, you get a phenomenon that I call competitive destruction. You know, you have the finest buggy whip factory, and, all of a sudden, in comes this little horseless carriage.”

Surfing:

“When these new businesses come in, there are huge advantages for the early birds. And when you’re an early bird, there’s a model that I call ‘surfing’—when a surfer gets up and catches the wave and just stays there, he can go a long, long time.”

Advantages of Scale:

“The very nature of things is that if you get a whole lot of volume through your operation, you get better at processing that volume. That’s an enormous advantage … Being so well known has advantages of scale—what you might call an informational advantage … Occasionally, scaling down and intensifying gives you the big advantage. Bigger is not always better … The great defect of scale, of course, which makes the game interesting—so that the big people don’t always win—is that as you get big, you get the bureaucracy. And with the bureaucracy comes the territoriality—which is again grounded in human nature.”

Incentives & Perverse Incentives:

“As usual in human affairs, what determines the behavior are incentives for the decision maker … getting the incentives right is a very, very important lesson … Appeal to interest and not to reason if you want to change conclusions … Another thing to avoid is being subjected to perverse incentives. You don’t want to be in a perverse incentive system that’s rewarding you if you behave more and more foolishly, or worse and worse. Perverse incentives are so powerful as controllers of human cognition and human behavior that one should avoid their influence.”

Incentive-Caused Bias:

“A natural cognitive drift toward the conclusion that what is good for the professional is good for the client and the wider civilization.”

Man-with-a-Hammer Tendency:

“To a man with only a hammer, every problem tends to look pretty much like a nail.”

Five Ws:

“The five Ws—you had to tell who was going to do what, where, when, and why … If you always tell people why, they’ll understand it better, they’ll consider it more important, and they’ll be more likely to comply. Even if they don’t understand your reason, they’ll be more likely to comply.”

Not Fooling Yourself:

“It is, of course, irritating that extra care in thinking is not all good but also introduces extra error. But most good things have undesired ‘side effects,’ and thinking is no exception. The best defense is that of the best physicists, who systematically criticize themselves to an extreme degree, using a mindset described by Nobel laureate Richard Feynman as follows: ‘The first principle is that you must not fool yourself, and you’re the easiest person to fool.'”

Disconfirming Evidence:

“Darwin paid special attention to disconfirming evidence, particularly when it disconfirmed something he believed and loved. Routines like that are required if a life is to maximize correct thinking … If you can get really good at destroying your own wrong ideas, that is a great gift.”

Deserve What You Want:

“The safest way to try to get what you want is to try to deserve what you want. It’s such a simple idea. It’s the golden rule. You want to deliver to the world what you would buy if you were on the other end.”

Chauffeur Knowledge:

“In this world I think we have two kinds of knowledge: One is Planck knowledge, that of the people who really know. They’ve paid the dues, they have the aptitude. Then we’ve got chauffeur knowledge. They have learned to prattle the talk. They may have a big head of hair. They often have fine timbre in their voices. They make a big impression. But in the end what they’ve got is chauffeur knowledge masquerading as real knowledge.”

Unfairness:

“Tolerating a little unfairness to some to get a greater fairness for all is a model I recommend to all of you.”

Second-Order Thinking:

“Consequences have consequences, and the consequences of the consequences have consequences, and so on.”

Avoid Chemicals/Addiction:

“While susceptibility varies, addiction can happen to any of us through a subtle process where the bonds of degradation are too light to be felt until they are too strong to be broken. And yet, I have yet to meet anyone, in over six decades of life, whose life was worsened by fear and avoidance of such a deceptive pathway to destruction.”

Envy, Resentment, Revenge, & Self-Pity:

“Generally speaking, envy, resentment, revenge and self-pity are disastrous modes of thought. Self-pity can get pretty close to paranoia. And paranoia is one of the very hardest things to reverse. You do not want to drift into self-pity … The best way to avoid envy, recognized by Aristotle, is to plainly deserve the success we get.”

Unreliability:

“Reliability is essential for progress in life and while quantum mechanics is unlearnable for a vast majority, reliability can be learned to great advantage by almost anyone.”

Social Proof:

“Another advantage of scale comes from psychology. The psychologists use the term ‘social proof.’ We are all influenced—subconsciously and, to some extent, consciously—by what we see others do and approve.”

Pavlovian Association:

“If people tell you what you really don’t want to hear—what’s unpleasant—there’s an almost automatic reaction of antipathy. You have to train yourself out of it.”

Serpico Effects:

“If enough people are profiting in a general social climate of doing wrong, then they’ll turn on you and become dangerous enemies if you try and blow the whistle.”

Crowd Folly:

“The tendency of humans, under some circumstances, to resemble lemmings, explains foolish thinking of brilliant men and much foolish behavior.”

Reduce Material Needs:

“Most people will see declining returns (due to inflation). One of the great defenses if you’re worried about inflation is not to have a lot of silly needs in your life—you don’t need a lot of material goods.”