In his own words
Munger on Circle of competence
12 sourced quotes. All themes
“Knowing what you don't know is more useful than being brilliant.”
Captures his oft-repeated stance on the limits of competence; widely cited, exact occasion not pinned to one recording.
“We have three baskets for investing: yes, no, and too tough to understand.”
Frequently quoted from the Berkshire and Wesco meetings; wording varies.
“If something is too hard, we move on to something else. What could be simpler than that?”
“One skill is knowing the edge of your own competency. It's not a competency if you don't know the edge of it. And Warren and I are better at tuning out the standard stupidities. We've left a lot of more talented and diligent people in the dust, just by working hard at eliminating standard error.”
“Whatever you think you know about technology, I think I know less.”
“Our game is to find a few intelligent things to do. It's not to stay up on every damn thing that's going on in the whole world.”
“Microeconomics is what we do, and macroeconomics is what we put up with.”
“Well, I think the great strategy, for the great mass of humanity, is to specialize — nobody wants to go to a doctor that's half-proctologist and half-dentist.”
He noted that he and Buffett deliberately did NOT specialize.
“I regard Alibaba as one of the worst mistakes I ever made. I got charmed with the idea of their position in the Chinese internet, and I didn't stop to realize that it's still a goddamn retailer.”
“Confucius said that real knowledge is knowing the extent of one's ignorance. … Think of somebody who's been a professional tightrope walker for twenty years — and has survived. He couldn't survive as a tightrope walker for twenty years unless he knows exactly what he knows and what he doesn't know. … The survivors know.”
He credits the opening line to Confucius; the tightrope image is his own. Condensed, with elisions marked.
“If you think your IQ is 160 and it's 150, you're a disaster. Much better a guy with a 130 that's operating well within himself.”
“At any given time, what we already knew was not going to be enough to take us to the next step. That's what makes it difficult. Think of all the people you know that have tried to take one extra step and have fallen off a cliff.”
On over-reaching beyond what you know.