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