- 1. Poor Charlie's Almanack is a compendium of wisdom and insights from Charlie Munger, the vice chairman of Berkshire Hathaway and a renowned investor, philanthropist, and polymath. This tome, illustrated with engaging graphics and supplemented by Munger's rich anecdotes, transcends mere financial advice, delving into the principles of human behavior, decision-making, and the importance of lifelong learning. Munger emphasizes the value of multidisciplinary thinking and adaptive reasoning, advocating for the integration of knowledge across various fields, such as psychology, economics, and mathematics, into investment and everyday life. The almanack serves as both a tribute to Munger’s intellectual legacy and a guide that challenges readers to cultivate a rational approach to thinking, embrace failure as a teacher, and develop a rigorous framework for investment decisions grounded in patience and ethical considerations. The book is a treasure trove for aspiring investors and curious minds alike, illustrating Munger’s belief that understanding the psychological biases that govern human behavior is as crucial as having financial acumen, thereby fostering a deeper comprehension of the world around us.
What does Charlie Munger call his approach to decision-making?
A) Investment framework
B) Business principles system
C) Latticework of mental models
D) Critical thinking method
- 2. What is Munger's famous rule about opportunities?
A) Wait for the fat pitch
B) Buy low, sell high
C) Diversify always
D) Follow the trend
- 3. What does Munger mean by 'circle of competence'?
A) Follow industry experts
B) Specialize in one field
C) Expand your knowledge constantly
D) Stick to what you understand
- 4. Which academic discipline does Munger consider essential for investors?
A) Accounting
B) Economics
C) Mathematics
D) Psychology
- 5. What is Munger's view on diversification?
A) Equal weight all investments
B) Concentrated bets on best ideas
C) Extreme diversification
D) Diversify across asset classes
- 6. What does Munger call the tendency to avoid admitting mistakes?
A) Stubbornness
B) Denial
C) Pride
D) Overconfidence
- 7. Which mental model comes from physics?
A) Opportunity cost
B) Supply and demand
C) Inertia
D) Margin of safety
- 8. What is Munger's approach to reading?
A) Read widely across disciplines
B) Follow current bestsellers
C) Focus on financial literature
D) Read only proven classics
- 9. What is Munger's view on envy?
A) It's particularly destructive
B) It's irrelevant to success
C) It's natural but manageable
D) It's motivating
- 10. Which principle suggests preparing for difficult times?
A) Hedging strategies
B) Diversification
C) Margin of safety
D) Risk management
- 11. What does Munger call the tendency to follow the crowd?
A) Social proof
B) Groupthink
C) Conformity bias
D) Herd mentality
- 12. What is Munger's advice about avoiding trouble?
A) Know what you want to avoid
B) Always be cautious
C) Follow established rules
D) Trust your instincts
- 13. Which company did Munger serve as vice chairman alongside Warren Buffett?
A) Wesco Financial
B) Goldman Sachs
C) Blue Chip Stamps
D) Berkshire Hathaway
- 14. Which concept from physics does Munger apply to human systems?
A) Critical mass
B) Quantum mechanics
C) Relativity
D) Thermodynamics
- 15. Which mental model comes from biology?
A) Natural selection
B) Compound interest
C) Supply and demand
D) Margin of safety
- 16. Which concept describes avoiding what doesn't work?
A) Optimization
B) Specialization
C) Maximization
D) Inversion
- 17. Which discipline helps understand complex systems?
A) Music theory
B) Literature
C) Art history
D) Engineering
- 18. What is Munger's approach to mistakes?
A) Hide them
B) Blame others
C) Learn from them
D) Ignore them
- 19. Which mental model comes from chemistry?
A) Leverage
B) Gravity
C) Friction
D) Catalysis
- 20. Which psychological tendency makes us favor first conclusions?
A) Halo effect
B) First conclusion bias
C) Availability heuristic
D) Recency effect
- 21. What is Munger's view on patience?
A) Overrated quality
B) Essential virtue
C) Situationally dependent
D) Sign of weakness
- 22. Which mental model helps understand cause and effect?
A) Emotional intelligence
B) Systems thinking
C) Lateral thinking
D) Creative thinking
- 23. Which concept describes disproportionate results from small inputs?
A) Domino effect
B) Snowball effect
C) Butterfly effect
D) Lollapalooza effect
- 24. Which psychological tendency makes us overvalue our possessions?
A) Endowment effect
B) Neglect of probability
C) Framing effect
D) Sunk cost fallacy
- 25. What does Munger consider the key to success?
A) Networking
B) Luck
C) Rationality
D) Intelligence
- 26. What does Munger mean by 'invert, always invert'?
A) Avoid consensus thinking
B) Reverse investments
C) Change opinions frequently
D) Look at problems backwards
- 27. What is Munger's approach to reading and learning?
A) Multidisciplinary reading
B) Study academic research
C) Focus on finance only
D) Read current news primarily
- 28. Which discipline helps understand incentives according to Munger?
A) History
B) Philosophy
C) Psychology
D) Economics
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