Charlie Munger's Closing Act || Q&A Transcript (2023)
"It’s certainly a peculiar example of one life," said Munger. "It’s interesting that a man who started out to be a lawyer ended up with an identity that’s more like a guru."
CNBC’s Becky Quick visited Charlie Munger at his home on November 14, 2023 — and filmed what turned out to be one of the final interviews of his long life. All in all, it’s a remarkably reflective celebration of Charlie’s unique outlook on business and life — including rare thoughts on reading fiction, capital punishment, and much more.
A parting gift, of sorts, that we can pore over and study for years to come.
Note: This interview is much longer than the ones I typically transcribe and annotate each month. As such, I’ve kept the footnotes to a minimum in the interest of time and space.
Becky Quick: First of all, I just want to thank you for inviting us to your home today and for hosting us here. We appreciate it.
Charlie Munger: I hope it will be interesting. It’s certainly a peculiar example of one life. It’s interesting that a man who started out to be a lawyer ended up with an identity that’s more like a guru’s than a lawyer’s.
I called you a lawyer once and I think that was the most irritated you’ve ever been with me — because that was how you started things, but you really have studied every field out there and tried to take things from different studies and different models in life. Did you go about doing that intentionally?
Of course. I could see the power of it.
When did you figure it out?
Well, it came naturally to me. I was what I would call naturally arrogant. I wasn’t that good a mind, you know? I was in the top 1%, but no prodigy. I never would’ve succeeded in a field that required a mind to be that of a prodigy. But it was a much better mind than ordinary people had — and I recognized that quite early. I just played the hand I was dealt in order to get as much advantage as I could.
When did you recognize that? Were you a child still?
Very young. When I was taking courses in grade school, I was often revising the textbook in the course in my head to make it more correct — because I realized the professor was doing it wrong.
(Laughs) What kind of things would you recognize that they were doing wrong?
They had some crazy ideas. For instance, my Latin teacher was a maladjusted woman who was a devoted follower of Sigmund Freud. I recognized that Sigmund Freud was a horse’s ass when I first read him when I was in high school. And, of course, it was an odd little boy whose Latin teacher is teaching him Freud. She was peculiar and so was I. I bought the complete writings of Sigmund Freud from the American Library — it was one big book — and I went through it very laboriously. And I realized he was a goddamn lunatic. (Laughs) So I decided [that] I wasn’t going to learn that from my Latin teacher.
That’s what I went through all my life, trying to turn every teacher into my Latin teacher. Just a poor fellow who hadn’t quite learned to understand it right yet. Now, I didn’t always succeed. I had some very unusual teachers.
The best teacher I had in my life was Lon Fuller.1 He was the best contracts teacher in any law school. Contracts is the best subject in every law school — at least I think it is — because it integrates so beautifully with the new doctrine of economics that came along with Adam Smith and all those people. I could see the integration — and so could this Lon Fuller who was a damn contracts teacher. He had been the leading contracts teacher in some other law school — that’s what got him to Harvard by transfer, which was rare in those days.
Also, I could see in Harvard Law School something very interesting. When I went to Harvard Law School, [it was] in the immediate aftermath of a long, long range in which 15 professors handled 1,500 graduate students. This is unheard of. Nobody had ever done anything like that. It just morphed into that system and it did it early. And, of course, when you have a system like that, it really helps to have a few big ideas that are strewn through the system that are useful and [to have] some professor that sees it.
That’s what Lon Fuller did. He really saw the whole damn [thing]. He integrated law and economics, is what he did to some extent. The reason he did is he wanted to know: Why do we have these goddamn contracts that so obviously make modern civilization work? He didn’t explain exactly why, but I can sort of explain why to myself after hearing Lon Fuller. Well, that’s an ideal teacher.
You had this idea of mental models before you got to him, though.
Yes, I just naturally came to it — but it was very much a Lon Fuller [kind of] thing. I was just awestruck by Lon Fuller. I have never been awestruck by any other teacher in my whole life, including some gifted mathematicians and physicists who did some remarkable things. But Fuller really, really had an impact [on me]. He really changed my life. He almost made me a law professor. I considered being a law professor and I knew I’d be pretty good at it.
Did you keep in touch with him for a long time after law school?
I never kept in touch with him. He was so remote a figure to me. He was like Moses coming down from the mountaintop. I was pleased he was there for [my years at Harvard]. And he put it all in a book. I didn’t need Lon Fuller. (Laughs) That’s the way I handled almost all of my teachers. I didn’t need ‘em.
Let’s talk about Benjamin Franklin. He’s one of the framers of our nation. He very famously gave out —
And he was a prodigy.
And he was a prodigy. He trained himself in lots of different disciplines.
He self-trained himself with, like, two years of grade school education. This is a very remarkable thing. And, when he found late in life that he needed something like algebra, he went back and pulled down the textbook and taught himself algebra.
He was very much a self-educated man — and that was very much an interesting story for that reason. How could a man who taught himself everything — like Latin — go into so many different fields and be the top guy in the whole country?
And weren’t we lucky to have him?
Yes.
All those five or six people whom we now consider the Founding Fathers have worn pretty well.
You found Ben Franklin when? How young were you when you first came across what Ben Franklin had done?
I think high school.
And that’s when you started modeling yourself after some of the things he —
I don’t know when I started modeling myself after Ben Franklin — but I certainly tried to model myself a little bit. I liked the mixture of financial life and regular life. But I couldn’t copy [him], I didn’t have any musical ability.
Franklin played four different musical instruments. One of which he invented.2 This is a lot of musical ability that the gods simply left out of me — so I can't do it. So I never made any effort to imitate Franklin’s musical ability. But any other ability he had, of course, I tried to imitate.
You started out in college at the University of Michigan. You were young when you went there because you had skipped some time in grade school. You went for mathematics. Why did you choose mathematics?
Because I could get an A in it without doing any work.