The Philanthropy of Knowledge

“Charlie [Munger] said that we have a moral duty to try to get smarter every day. At his heart, Charlie was one of the most profoundly dedicated teachers I’ve ever known.”

“There is not a single person — in any profession — who’s life would not go better from trying to internalize some of [Charlie Munger’s] teachings,” Berkshire Hathaway director Chris Davis recently told Barron’s Andy Serwer.

Three years ago today, I started this newsletter. I hit publish and sent out the first issue to a subscriber list of zero. It was a bit like shouting into the void. An overnight success story, Kingswell was not.

Happily, though, readers eventually began to trickle in and that once empty subscriber list now numbers more than 7,000 of the brightest men and women around. Many thanks to everyone here for your support along the way!

In some respects, Kingswell remains a most unusual corner of the Substack world — what with its rather narrow focus on Berkshire Hathaway and the teachings of Warren Buffett and Charlie Munger. (I do occasionally stray outside those lines.)

But I think the above statement from Davis sums up what I’m trying to do here pretty well. Only by peering deeply into their example can we ever hope to “internalize” those lessons into our own minds and lives. That’s the goal, anyway.

I don’t flatter myself as someone of especially keen insight or intellect, but I do enjoy seeking out and absorbing wisdom from those who do reach such a level. And, in light of Munger’s passing in 2023 and Buffett’s own advancing age, there’s no time to waste. Kingswell’s focus will likely expand somewhat in the coming years, but (for now) I’m all in on documenting and studying the closing chapters of the Buffett and Munger era.

---

---

“The world [lost] one of the great teachers,” continued Davis. “Charlie said that we have a moral duty to try to get smarter every day. At his heart, Charlie was one of the most profoundly dedicated teachers I’ve ever known.”

Teaching and investing don’t always go hand in hand. A good teacher must openly share ideas and knowledge with students. The average investor, on the other hand, often hoards his or her findings for personal profit. And there’s nothing wrong with that — but it does make you appreciate those rare investing masterminds who are more concerned with contributing to the sum of human knowledge than in adding another zero to their net worth.

“Business, for [Benjamin] Franklin, was a means of being able to be free of day-to-day work so that he could pursue and share wisdom,” said Davis. “And I would say that was Charlie’s life, too. His financial freedom allowed him to continue to pursue this vast range of interests — and then to share that wisdom across all disciplines.”

In Jordan Peterson’s new series on The Gospels, he makes much the same point while discussing the Parable of the Sower. “There are two kinds of professors,” he said. “There are professors who cling to their ideas and want credit for them. If they have an idea, they guard it [because] they feel that everybody is going to steal it. The capability of those people to generate ideas plummets across time.”

“Then you have the other sort,” he continued, “who just gives every idea away. And the consequence of that is that he gets a tremendous amount of positive feedback and enthusiasm on the part of others. If I share an idea with you and you’re enthusiastic about that — and I regard that as rewarding — my brain will increase the number of resources devoted to the system that generated that idea. If you give things away and you get a positive social consequence of that, the source of the idea itself is going to make itself more manifest — and that is the well that never runs dry.”

Benjamin Graham did that when he not only shared the principles of investing with his students, but walked them through analyses of real-life, contemporary businesses that could be put into action as soon as they walked out of the classroom.

Lorimer Davidson did it when, instead of telling a college-aged Warren Buffett to scram when he showed up at GEICO headquarters on a Saturday afternoon, he spent several hours telling the inquisitive young man all about the insurance industry.

Warren Buffett and Charlie Munger, through their countless letters, speeches, interviews, Q&A sessions, and more. Never stopping to worry that they might be creating new competition for themselves or making their own lives harder. They didn’t have to speak out against the Efficient Market Hypothesis — or whatever the latest bit of wretched excess that has reared its ugly head on Wall Street. Most people would keep quiet, profit in private, and leave others to their misery.

But that spirit of abundance — the unwavering belief that good ideas do indeed grow on trees (and will keep re-growing in the future) — is what separates an exemplary teacher from a run-of-the-mill one.

“If some of you make your investment style more like Berkshire Hathaway’s,” Charlie once said, “you will be unlikely to have cause for regret. Instead, Berkshire will have cause for regret as it faces more intelligent investment competition. But Berkshire won’t actually regret any disadvantage from your enlightenment. We only want what success we can get despite encouraging others to share our general views about reality.”

---

A few more of the best lines from that Chris Davis interview with Barron’s…

✨ “The inside is the same as the outside [at Berkshire Hathaway]. Gandhi said, ‘Happiness is when what you do, what you say, and what you think are all the same.’ That is a profound representation of the culture at Berkshire. Everything that has happened since I went into the tent was exactly what was there from the outside. It was a translucent tent.”

✨ “The stewardship culture is really the essential value system of Berkshire Hathaway. And a big part of the board is just being watchdogs — vigilant and nurturing — doing anything we can not to interfere with that culture and promote it.”

✨ “Banking itself — making a spread on money — is one of the world’s oldest professions, so it’s a difficult model to obsolete. A lot of innovation has been thrown at financial services and banking over the last fifty years — the invention of the money market fund, the asset-backed security, the internet, the ATM — and yet, somehow, banks sort of powered through this.”

• While discussing the banking industry, Davis dropped his funniest line: “Think of Mr. Potter in It’s A Wonderful Life. He was a villain — but if you were an investor, he was your friend.”

✨ “If I’m forced to wear a label, I’d prefer the label of value [investing] because it makes clear that we have a price discipline at the heart of what we do and that buying things that we think are undervalued is the core part of what we do.”