Uncommon Sense: Charlie Munger & The Curmudgeon's Breakfast
“People should take way less than they are worth when they are favored by life.”
On the latest episode of the Richer, Wiser, Happier podcast, Howard Marks briefly dissects the life and career of Charlie Munger — and how, in particular, his toolkit of mental models allowed him to harness his own brilliance to extraordinary effect.
Charlie did not hoard wisdom for his own benefit, but shared it freely with the world — usually in frank, unfiltered fashion.
“That was Charlie,” said Marks. “Very smart, incredibly thoughtful in interior life, [and] very outspoken. You know, he said exactly what he thought all the time, regardless of who he was saying it to or what it was. He was a good, kind person — but he was the furthest thing from PC that you ever met.”
“He would just say what he thought was right.”
That little synopsis captures well my favorite side of Charlie Munger: the brave truth teller, unafraid to deliver unpopular messages and intellectual broadsides.
On at least a few occasions, Charlie addressed the Stanford Law School Directors College, an educational conference for corporate board members. And if the attendees expected a relaxing two-day “vacation” out in Palo Alto, they were dead wrong.
He dubbed his speeches there the “curmudgeon’s breakfast” in wry acknowledgement that no punches would be pulled when discussing the excess and folly of the industry.
Unfortunately, I could only find brief reports from his early-to-mid-2000s keynote speeches at the Directors College. But, just from the scant records that survived, this was Charlie cranked up to eleven (in Spinal Tap parlance).
If Stanford wanted a speaker to massage the egos of any power brokers in attendance, Charlie was not their man. Instead, he leveled incisive criticism at the crowd on topics ranging from executive compensation to governmental regulation — with the targets of said criticism often sitting right there in front of him.
A newspaper account of his 2004 address paints quite the picture:
[Charlie Munger] took potshots at proxy-advice firm Institutional Shareholder Services, whose vice chairman Jamie Heard was in the audience; at trial lawyer Bill Lerach, also a keynote speaker; and at public pension funds and the unions that, in Munger’s mind, control them. He argued against initiatives that SEC chairman William Donaldson pleaded for in his speech [the day before]. And, without naming names, he scolded corporate directors, who made up the bulk of the audience.
Oh, to be a fly on that wall and to hear Charlie at his Charliest.
Absent a time machine, the following summary is pretty much the next best thing…
The curmudgeon’s breakfast was not a place to make friends.
Charlie Munger used the platform to preach accountability and condemn ethical decay at the highest levels of business, taking direct aim at…
Corporate directors: Charlie all but called them spineless rubber stamps, arguing that CEOs could (and would) bring any proposal or demand to the board and receive nothing short of sycophantic approval.
“It’s like belching at a party to raise any objection,” he said.
He also suggested that the securities industry desperately needed ethical standards akin to the military’s “conduct unbecoming an officer” clause. And hammered home the point as only Charlie could. “People ought to know that banging stewardesses on the corporate airplane is conduct unbecoming,” he said. “But it’s not going to happen.”