Poor Charlie’s Almanack

Welcome to my Poor Charlie’s Almanack book summary!

One-Sentence-Summary: Speeches by the famous investor Charlie Munger, starting in the 90’s – when he was 60+ years old – focusing on the incompleteness of education and the importance of having various mental models from various disciplines to best solve problems.

I’ve finished reading Poor Charlie’s Almanack by Charles T. Munger. Page: 431

booboo real-time book rating: ★★★★☆ (percentage of books with this rating: 34%)

“..appeal to interest and not to reason if you want to change conclusions.” (p. 250) I think this is actually from Ben Franklin.

While the entire book demonstrated Charlie’s immense knowledge and high IQ, the last chapter solidified it – not a good thing. Charlie’s understanding of the world allows him to weave together different ideas, big words, and historical characters with ease, in turn allowing only the most deft of readers to follow along. For example, he mentions the death of a Kitty Genovese when talking about Social-proof tendency without giving additional details before moving to the next paragraph. My ‘understanding’ was low, but the overall idea of the book, somehting still not taken in by educational institutions at large, probably becuase it’s a smart person idea and most teachers, in my experience, are not smart.

Mental Models

A mentla model is how one discipline would sovle a problem. Pilots use checkliests. Economists use human incentive. There are hundreds and Charlie suggests having a hundred is essential to become a superior problem solver which has effects on many areas of life and reality.

This exercise is freehand to organize the existing mental models that I currently have top-of-mine.

These are the most common:

Human Incentive – Humans, mostly, act by personal incentive.

Darwinina – Survival of the fittest

Rationality from economics

Follow the money

Backward Thinking – Always look at problems backwards to fowards. Invert.

Second (and third) order effects

What if the opposite were true?

Compounding and Taxes

If you have 15% returns for 30 years and pay a one-time tax of 35% at the end, that brings your yearly retrns to 13.3%. The more often you pay tax, say yearly or every few years when you sell, that would bring you net returns to below 10% even if you’re beating the market. And those few percentage points matter greatly over the long run. This one is obvous and hurts me. I sold vaoius stocks like Netflix after earnign 100% in a year or two (sold around $450 I think) and now it’s $1,000+ so double mistake.

This blog will contain both my summary and review of the book Poor Charlie’s Almanack.

As I read the book, you will find my in-progress Poor Charlie’s Almanack review and book summary notes below.

“Charlie treats financial reports and their underlying accounting with a Midwestern dose of skepticism. At best, they are merely the beginning of a proper calculation of intricate valuation, not the end.” (p. 56) Speaking as a prior CPA, he was ahead of his time on this one, very wise, and still true, if not truer, today.

You are reading my book review and summary by Charles T. Munger. Be sure to check out my digital bookshelf for 300+ book summaries.

The Contrarian View

For all of his successes, Berkshire Hathaway had some enormous failures. I consider the biggest one selling of his airline stocks (really, any stock at all) in April 2020 just before they recovered and lost out on $3 billion. (Not comparing myself to Warren/Munger, but..) I bought ~$30k in March 2020 and sold one year later for $70k.

Many would attribute his greatest mistake to failing to invest in technology. He said since day one that he doesn’t invest in things he doesn’t understand, and he doesn’t understand technology. That’s consistency and may have helped him avoid other problems. With that said, he was a close friend of Bill Gates, but he missed out on Microsoft. Also, on Amazon (which he admitted was a mistake). BH entered Apple late (you could say?), their only tech investment, which unsurprisingly turned out to be their best investment.

They were also famously not fans of Bitcoin. While consistent, clearly a mistake at least up to 2026.

“‘Keep your eyes wide open before marriage and half shut thereafter.'” (p. 351)

Did you know I’m an author? I wrote four books on real estate investing, travel, and language learning.

Interesting concept – The stock market is a pari mutuel system where your returns shrink with increasing “betters” on the same stock (the betters decide on the odds based on their “bets”), and the “house” (brokerage) never loses becuase of their auto-cut. This is unlike traditional betting, where the house sets the probabilities, and they could, in theory, lose.

“..tendencies demonstrated by social psychology paradocially grow weaker as more people learn them..” (p. 170) This works for n=1. As long as you know the jewelry or car dealership is offering you a free water in exchange for an increase proability of a purchase, you are more likely to resist the underly psychological trick.

Munger as a Relative

I found it very interesting the stories from close family members to start the book. Munger did not seem like all that nice of a guy/father. He told his (I think) step son to go back to get his paper in the middle of a storm requiring a boat when he forgot it. On one hand he said to confess early your error, that’s a good thing and you won’t be punished, but we’re got hte prior story and then on another occasion, a child dropped the keys into a 5 foot lake and Munger told him to get them and don’t come home until you find them. Some inconsistency. I also found it interesting on many occasions when he was described as beign distant was covered up in his parenting through signs and singals that you had to interpeet. I dont’ think so. I think that’s just bad fathering if you have to inerpret everything. One of the relativews that siad Munger never once has one of those father-son/daughter talks. That’s a bad thing. It shouldn’t be covered up his style of parenting because that stule of partneting is not desirable.

“..the safest way to try to get what you wnat is to try to deserve what you want.” (p. 289)

New Words!

Stentorian (adj.) – loud and powerful (his voice is stentorian)

Esoteric (adj.) – understood by only a small group with specialized knowledge (Munger would constantly refer to esoterica to subtly hint at his intelligence.)

Assiduous (adj.) – showing great care (She would assiduously review the schoolchildren’s math homework to ensure she didn’t make errors in her corrections.)

Denizen (n.) – occupant of a particular place (the denizens under the bridge have a long history going back to Jack Black’s time and probably before)

Didactic (adj.) – instructing with a moral purpose (The uncle preferred didactic lessons for his nephews)

Misanthrope (n.) – a person who dislikes humankind and avoids society (Anthropic, the AI company, paradoxically communicates in a misanthropic manner.)

Daft (adj.) – silly questions (The boy constantly asked daft question after daft question.)

Yore (n.) – of times in the past (The anecdote carried the confident ignorance of yore.)

Thanks for visiting and thanks to Charles T. Munger for writing Poor Charlie’s Almanack!

Date Started: Thursday, April 23, 2026

Date Finished: Friday, May 29, 2026 (35 days)

Year Originally Published: 2005