Charlie Munger’s Timeless Storytelling Skills

“Charlie Munger is magnificent at being able to condense important ideas into very few words,” Warren Buffett once said about his closest friend.

Munger, the billionaire vice chairman of Berkshire Hathaway, died Tuesday at the age of 99. Munger’s fans and followers have flooded social media with reminders of his humor, intellect, and influence.

Munger was an extraordinary storyteller and communicator. His best tips stand the test of his time because of the way he delivered them.

Munger used two time-tested rhetorical vehicles to educate investors: maxims and parables.

Maxims Masked as Mungerisms

In its obituary, The New York Times called Munger Buffett’s “maxim-spouting alter-ego.” Maxims were Munger’s strength, and he used them as brilliantly as his hero, Benjamin Franklin.

The most cited Munger maxims (known as Mungerisms) stand the test of time because they pack volumes of worldly wisdom into short, memorable statements.

Maxims work best when they contain universal truths (or guiding principles) in a tight, concise expression of a short sentence or two. Chief among Munger’s guiding principles:

Spend each day trying to be a little wiser than you were when you woke up.

In just one sentence, Munger captured the core principle he credited for his extraordinary success—continuous learning. Munger once said the world keeps changing, so if you want to keep growing in life and business, be a learning machine.

Here’s another:

Mimicking the herd invites regression to the mean.

In just eight words, Munger captures a complex investing principle using scientific terms to explain a profoundly psychological phenomenon. In short, Munger is saying that following the crowd only guarantees average results.

Munger’s observation complements Warren Buffett’s famous quote, or maxim: “Be greedy when others are fearful and fearful when others are greedy.”

“Charlie is content to swim imperturbably against the tide of popular opinion—indefinitely, if necessary—which is a rare attribute in the average investor,” according to the 2023 updated edition of Poor Charlie’s Almanack. “This lone-wolf aspect of Charlie’s temperament is a rarely appreciated reason why he consistently outperforms the larger investment community.”

Because maxims pack a wallop in a few words, not only are they memorable, they’re more likely to be acted upon. And Warren Buffett is glad he followed one.

In Berkshire Hathaway’s 2015 shareholder letter, Buffett said Munger reframed the way he invests and, as a result, made him and Berkshire shareholders very rich.

“The blueprint he gave me was simple,” Buffett recalls:

Forget what you know about buying fair businesses at wonderful prices; instead, buy wonderful businesses at fair prices.

Buffett said he was initially reluctant to pursue this philosophy because he had enjoyed reasonable success without Munger’s input. “But Charlie never tired of repeating his maxims about business and investing to me, and his logic was irrefutable.”

The brevity of Munger’s quote and the clear contrast between fair businesses and wonderful businesses makes the saying stand out. It’s memorable, easy to grasp, and thought-provoking, all hallmarks of effective communication.

Parables to Live By.

Munger, a voracious reader across multiple disciples, realized that the great teachers in history relied on parables as a powerful educational tool. By distilling complex ideas into short, relatable stories, Munger’s parables illustrated bigger lessons about universal truths.

He deliberately chose existing parables or created his own to highlight the choices people have when faced with decisions.

“My dad often used the forum of the family dinner table to try to educate his children,” recalls daughter Wendy Munger in Poor Charlie’s Almanack. “His favorite educational tools were the Morality Tale, in which someone faced an ethical problem and chose the correct path, and the Downward Spiral Tale, in which someone made the wrong choice and suffered an inevitable series of catastrophic personal and professional losses.”

One of Munger’s principles of investing (and for a successful career) is to stay within your circle of competence; follow your knowledge, passion, and aptitude. According to Munger, staying too far from your area of competence is a recipe for trouble.

One of Munger’s favorite ways of conveying the circle of competence was to wrap it in a short story such as this one:

I’m always being visited by young men who say, I’m practicing law and I don’t like it. I’d rather be a billionaire. How can I do it? Well, I’ll tell you a story. A young man goes to see Mozart. And he says, Mozart, I want to start composing symphonies. And Mozart said, How old are you? And the guy says, 22. Mozart says you’re too young to do symphonies. And the guy says, yes, but you were 10 years old when you were composing symphonies. And Mozart says, yes, but I wasn’t running around asking other people how to do it.

Munger believed that investors who don’t understand opportunities or businesses well enough to make informed decisions are likely to make bad decisions. He also believed the same philosophy applied to career decisions. If you figure out what you’re good at, you’ll have an edge.

Munger was also fond of a parable instructing people to live a meaningful life. Munger’s advice was to write your obituary how you want it to read at your funeral and live your life accordingly.

“That reminds me of a story,” Munger added in a speech at the USC Law School.

The minister said, ‘It’s now time to say something nice about the deceased.’ And nobody came forward, and nobody came forward, and nobody came forward. And finally, one man came up and said, ‘Well, his brother was worse.’ That is not the life you want to have.

Sage advice in the form of a parable.

In another famous maxim, Munger once said, “The best thing a human being can do is to help another human being know more.” Munger was a teacher at heart, and the communication tools he chose to use leave his students and followers much wiser because they know more.