August Turak

Author Consultant Speaker

Charlie Munger's Valentine: Why Finding True Love Is Like Picking Great Stocks

What I found in my extended attempts to complete my stunted education, was that, plugging along with only ordinary will…my ability to serve everything I loved was enhanced far beyond my deserts. – Charlie Munger


The Valentine’s Day episode of This American Life on NPR chronicled the extraordinary things that people will do for love. One spurned woman was so broken hearted when her ex-boyfriend refused to return her calls that she left his phone number on restroom walls imploring other women to intercede for her. So many of her sympathetic sisters rallied to her side that he did call: Only to angrily demand that she stop leaving his phone number on restroom walls.

As the saying goes, I can relate. As a callow, love-sick youth pushing 30, I inundated a young woman with mail ordered Teddy Bears trying to get her to go out with me. She eventually did, but only to make it perfectly clear that one Teddy Bear from me was too many and a million not enough. It still holds pride of place as my shortest date, and I can only pray that she didn’t take out her considerable ire on all those blameless Teddy Bears.

Time heals all wounds and the woman on This American Life now finds her story as amusing as I find mine. But I was struck by the lesson she drew from the experience. She had always believed that if she wanted something bad enough and worked hard enough that she would eventually get it. But she now believes that this formula doesn’t apply to love.

However I am fairly certain that Charlie Munger, Warren Buffett’s longtime partner and sometime guru would firmly disagree. In 1994 Munger gave a speech at the University of Southern California, Marshall School of Business, ostensibly on stock picking. He began by saying that he was playing a “minor trick” on his audience because he considered “the art of stock picking” to be merely a “subdivision of the art of worldly wisdom.”

He then invoked what psychologists call “Grandma's Rule:” If his audience wanted to enjoy the “dessert” of his stock picking prowess they would first have eat their “carrots” by ingesting his “remedial worldly wisdom.” According to Munger, success whether in leadership, stock picking, or your love life is merely a by-product of this worldly wisdom. So how does Munger define worldly wisdom?

“You’ve got to have models in your head. And you’ve got to array your experience- both vicarious and direct- on this latticework of models. You may have noticed students who just try to remember and pound back what is remembered. Well, they fail in school and fail in life. You’ve got to hang experience on a latticework of models… And the models must come from multiple disciplines – because all the wisdom of the world is not to be found in one little academic department.”

Munger then introduces the inter-disciplinary models that we must have to be “really good” at anything: including what he refers to as a “narrow art like stock picking.”

Check out Munger’s speech for all his models, but for the purpose of this Valentine’s Day discussion on the narrow art of love, let’s focus on a model he calls “elementary mathematics;” especially probability theory.

According to Munger, “If you don’t get this elementary, but mildly unnatural, mathematics of probability into your repertoire, then you go through a long life like a one-legged man in an ass-kicking contest. You’re giving a huge advantage to everybody else.”

It is her failure to master elementary probability theory that leads the woman from This American Life into the error that effort is unrelated to love. Probability theory can tell us almost exactly how many cars will turn left at a given stop sign. What it can’t tell us is which cars will turn left. Similarly, probability theory predicts that if the woman from This American Life wants love bad enough and works hard enough she will almost certainly find it. What probability theory however cannot guarantee is that all the work in the world will get her one unique person—her ex-boyfriend.

Without the benefit of Munger’s probability model, she ends up jumping to the conclusion that romantic love must belong to a unique model or no model at all. And since at the end of the show she is described as “still single,” it is highly probable that her logical error has reduced her to the romantic version of Munger’s one-legged woman in an ass kicking contest. She may be giving up Munger’s “huge advantage” to those who still believe that working at love increases the probability of finding it.

I remain however sympathetic. After my disastrous and exceedingly expensive Teddy Bear Affair I was also convinced that love was impervious to hard work and determination. Luckily, I was rescued from my mistake by sales. Selling is a “numbers game” that relies on the latticework of probability. No matter how bad I wanted it or how hard I worked I could never be sure that any particular prospect would buy. But if I worked hard enough I discovered that in all probability someone would buy. Once I had internalized this model, I merely followed Munger’s advice. I arrayed another experience, romance, on his latticework of probability and went back to work (though I gave up on the Teddy Bears.)

Louis R. Mobley, my mentor and the founder of the IBM Executive School in 1956, insisted that great leaders don’t know different things they think in utterly different ways. Success is not a matter of what you think but how you think. I’m a huge fan of Charlie Munger’s. Like Mobley, Munger’s success doesn’t rely on thinking but on thinking about thought (One of Munger’s talks is called Practical Thought about Practical Thought). Also like Mobley, Munger has a knack for connecting what most would consider the “useless” pursuit of wisdom for the sake of wisdom to practical things like stock picking and affairs of the heart.

The more you read Munger the more you realize that worldly wisdom is not optional. It is a necessity. He constantly urges us to aim higher by serving the things we love rather than just life’s narrow subsets like business or making money. He reads constantly on diverse topics looking for more and better models, and likes to quote Mark Twain: “The man who doesn’t read great books has no advantage over the man who can’t read them.”

Munger was asked, in light of the spectacular success that he and Buffett have enjoyed at Berkshire Hathaway, why more people don’t copy their model of worldly wisdom.

“I don’t know,” Munger replied. “It’s not that hard. So I just don’t know.”

And if you think he’s just being modest when he says acquiring worldly wisdom is not that hard, Munger, who never graduated from college, almost boasts, “To this day, I have never taken a course anywhere, in chemistry, economics, psychology, or business.”

Take Charlie Munger’s Valentine’s Day message to heart. Acquire worldly wisdom and use it only to serve the things you love. If you do, there is a high probability that you will succeed in life beyond your dreams and far beyond your deserts.

A Special Valentine’s Day thanks to a Texas reader, Ryan McElroy, for giving me Poor Charlie’s Almanack: The Wit and Wisdom of Charles T. Munger. It was the inspiration for this article and I expect many more…


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