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Charlie Munger on Building Resilience

As I read through one of Charlie Munger ( Trades , Portfolio )'s biographies, I become more and more impressed not only with his track record, but with the attitude that Munger had when facing some very harsh adversities during his life. As you may be aware of, Munger suffered the loss of a son to a disease and had his left eye removed as a result of a surgery complication. These adversities have the potential to develop into some undesired patterns such as depression or self-pity, and I believe that these lessons are not only valuable for investing, but also for life itself.

"Another thing, of course, is that life will have terrible blows in it, horrible blows, unfair blows. It doesn't matter. And some people recover and others don't. And there I think the attitude of Epictetus is the best. He thought that every missed chance in life was an opportunity to behave well, every missed chance in life was an opportunity to learn something, and that your duty was not to be submerged in self-pity, but to utilize the terrible blow in constructive fashion. That is a very good idea."

"Generally speaking, envy, resentment, revenge and self-pity are disastrous modes of thoughts. Self-pity gets fairly close to paranoia, and paranoia is one of the very hardest things to reverse. You do not want to drift into self-pity. ... Self-pity will not improve the situation."

"A lot of people with high IQs are terrible investors because they've got terrible temperaments. And that is why we say that having a certain kind of temperament is more important than brains. You need to keep raw irrational emotion under control. You need patience and discipline and an ability to take losses and adversity without going crazy. You need an ability to not be driven crazy by extreme success."

I believe that the last quote is very representative of the attitude that we should have as investors. Investing indeed requires some number crunching, but the most important (and challenging) part relies on controlling our attitude and emotions. As Munger mentions, it is the ability to recognise that we will make mistakes, that we must learn from them and move on. Another important point is to avoid comparisons and to achieve personal goals investing, whether that is beating other investors, the market, or any of these. Charlie Munger (Trades, Portfolio) has set a great example that we can copy, as he recommends, so that we also achieve superior results.About GuruFocus: GuruFocus.com tracks the stocks picks and portfolio holdings of the world's best investors. This value investing site offers stock screeners and valuation tools. And publishes daily articles tracking the latest moves of the world's best investors. GuruFocus also provides promising stock ideas in 3 monthly newsletters sent to Premium Members .

This article first appeared on GuruFocus .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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