- 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) Critical thinking method
B) Investment framework
C) Business principles system
D) Latticework of mental models
- 2. What is Munger's famous rule about opportunities?
A) Diversify always
B) Follow the trend
C) Buy low, sell high
D) Wait for the fat pitch
- 3. What does Munger mean by 'circle of competence'?
A) Stick to what you understand
B) Expand your knowledge constantly
C) Specialize in one field
D) Follow industry experts
- 4. Which academic discipline does Munger consider essential for investors?
A) Economics
B) Accounting
C) Mathematics
D) Psychology
- 5. What is Munger's view on diversification?
A) Equal weight all investments
B) Extreme diversification
C) Diversify across asset classes
D) Concentrated bets on best ideas
- 6. What does Munger call the tendency to avoid admitting mistakes?
A) Stubbornness
B) Denial
C) Overconfidence
D) Pride
- 7. Which mental model comes from physics?
A) Inertia
B) Opportunity cost
C) Margin of safety
D) Supply and demand
- 8. What is Munger's approach to reading?
A) Read widely across disciplines
B) Follow current bestsellers
C) Read only proven classics
D) Focus on financial literature
- 9. What is Munger's view on envy?
A) It's motivating
B) It's natural but manageable
C) It's particularly destructive
D) It's irrelevant to success
- 10. Which principle suggests preparing for difficult times?
A) Diversification
B) Risk management
C) Hedging strategies
D) Margin of safety
- 11. What does Munger call the tendency to follow the crowd?
A) Herd mentality
B) Conformity bias
C) Groupthink
D) Social proof
- 12. What is Munger's advice about avoiding trouble?
A) Always be cautious
B) Know what you want to avoid
C) Trust your instincts
D) Follow established rules
- 13. Which company did Munger serve as vice chairman alongside Warren Buffett?
A) Berkshire Hathaway
B) Wesco Financial
C) Goldman Sachs
D) Blue Chip Stamps
- 14. Which concept from physics does Munger apply to human systems?
A) Quantum mechanics
B) Relativity
C) Thermodynamics
D) Critical mass
- 15. Which mental model comes from biology?
A) Margin of safety
B) Natural selection
C) Compound interest
D) Supply and demand
- 16. Which concept describes avoiding what doesn't work?
A) Inversion
B) Specialization
C) Maximization
D) Optimization
- 17. Which discipline helps understand complex systems?
A) Music theory
B) Engineering
C) Art history
D) Literature
- 18. What is Munger's approach to mistakes?
A) Ignore them
B) Blame others
C) Hide them
D) Learn from them
- 19. Which mental model comes from chemistry?
A) Friction
B) Leverage
C) Catalysis
D) Gravity
- 20. Which psychological tendency makes us favor first conclusions?
A) Halo effect
B) First conclusion bias
C) Recency effect
D) Availability heuristic
- 21. What is Munger's view on patience?
A) Essential virtue
B) Situationally dependent
C) Overrated quality
D) Sign of weakness
- 22. Which mental model helps understand cause and effect?
A) Systems thinking
B) Lateral thinking
C) Creative thinking
D) Emotional intelligence
- 23. Which concept describes disproportionate results from small inputs?
A) Snowball effect
B) Lollapalooza effect
C) Domino effect
D) Butterfly effect
- 24. Which psychological tendency makes us overvalue our possessions?
A) Endowment effect
B) Framing effect
C) Sunk cost fallacy
D) Neglect of probability
- 25. What does Munger consider the key to success?
A) Luck
B) Intelligence
C) Networking
D) Rationality
- 26. What does Munger mean by 'invert, always invert'?
A) Look at problems backwards
B) Change opinions frequently
C) Reverse investments
D) Avoid consensus thinking
- 27. What is Munger's approach to reading and learning?
A) Multidisciplinary reading
B) Read current news primarily
C) Focus on finance only
D) Study academic research
- 28. Which discipline helps understand incentives according to Munger?
A) Economics
B) History
C) Philosophy
D) Psychology
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