Warren Buffett’s right-hand man, Charlie Munger, on what it takes to be an extraordinary investor.
It’s all about knowing your limits, Munger recently told Jason Zweig of the Wall Street Journal:
Confucius said that real knowledge is knowing the extent of one’s ignorance. Aristotle and Socrates said the same thing. Is it a skill that can be taught or learned? It probably can, if you have enough of a stake riding on the outcome. Some people are extraordinarily good at knowing the limits of their knowledge, because they have to be.
*** Munger uses the analogy of a tightrope walker:
Think of somebody who’s been a professional tightrope walker for 20 years – and has survived. He couldn’t survive as a tightrope walker for 20 years unless he knows exactly what he knows and what he doesn’t know. He’s worked so hard at it, because he knows if he gets it wrong he won’t survive. The survivors know.
Knowing what you don’t know is more useful than being brilliant.