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Josh Wolfe @wolfejosh
, 7 tweets, 3 min read Read on Twitter
1/ A great HACK to learn how TO do something––

––is to study how NOT TO do it.

1/x or -x
"man muss immer umkehren"
Invert, Always Invert
was the advice of Charlie Munger adopted from mathematician Carl Jacobi to flip problems on their head...
2/ One of my all-time favorite speeches is Charlie Munger (1986) adding on to the inverting wisdom of a prior Johnny Carson commencement.

Carson told students he could not them how to be HAPPY–
–but he could help them ensure a life of MISERY...
3/ For a life of. misery Johnny Carson advises:
1) Ingesting chemicals in an effort to alter mood or perception;
2) Envy; and
3) Resentment.

For happiness:
INVERT and do the OPPOSITE.

In the same logic Munger advises

*BE UNRELIABLE...
4/ Munger further advises for misery:

*ONLY learn from your own personal experience (not others, nor books)

*GIVE UP + DONT GET UP when you face adversity...
5/ Finally be CLOSE MINDED and do not test your own ideas or change your mind...

**Of course you must invert all this. For a life of happiness + meaning...
6/ I was reminded of this timeless technique in a 32 year old speech while reading this very good piece..

"How To Fail As a New Engineering Manager" by @hashbrown1

blog.usejournal.com/how-to-fail-as…
@hashbrown1 7/ BTW - here is the original letter Charlie Munger sent to Johnny Carson letting him know he used his speech as inspiration and Johnny Carson's reply letter back to him.

(Grateful for excerpts from Poor Charlie's Almanack + Seeking Wisdom)
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1/ This is the moment many believers became skeptics. Appears it may have been a fraud —a magic trick used to bail out relatives, stuck it to investors who got duped along with customers who put down deposits and gave their cash + trust —and lost both.
2/ Here is the anatomy of how suckers get duped.
3/ If you are an inventor, engineer, scientists, investor who truly wants to bring new + risky technology to markets with honesty & integrity—and see how bad actors (like Theranos) can ruin it for good actors—you can’t watch or read the two above threads—and not be appalled.
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1/ Less than 2 months ago I speculated on something very improbable but very important...
2/ And TODAY the head of China says...
3/ I mean...
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1/ One word Apple CEO Tim Cook does not mention: Huawei...
2/ Coincidentally I tweeted this out this AM before Apple’s lower guidance & China blame
3/ Zoom in and it the data was already hinting...right in front of us.

Better to make OBSERVATIONS than PREDICTIONS
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Related threads

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During the Internet bubble (1997-2001) prices went up because of FOMO (e.g. people terrified of having less wealth than their brother in law or neighbor), but prices went down because the companies driving it couldn't generate enough cash which triggered a negative feedback loop.
Eventually the supply of new believers with cash disappears and a drop in price causes HODLers to fear being poorer than their brother in law. Feedback loops caused by FOMO work in both directions and once started follow a path which is impossible to predict with any certainty.
Shorting a phenomenon like a bubble driven by FOMO based on just on valuation creates a massive risk of being right far too early. When in doubt, watch cash and cash flow. Anyone who lived through 2002 and 2003 and was paying attention became a believer in the importance of cash.
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X : Why do you go on about cups of tea?
Me : Bizarre. I like a cup of tea.
X : It's just boiled water with leaves.
Me : Very Douglas Adams. It's more than that, to me anyway.
X : I don't understand.
...
Me : Have you ever been to Hawaii, driven a Porsche or flown in a private jet?
X : Yes
Me : I haven't.
X : So?
Me : Have you ever been so poor you had to forgo eating to pay a bill, found yourself homeless, borrowed from others as you had nothing left.
X : No
Me : I have.
...
X : I don't understand.
Me : Has life been good to you?
X : I've worked hard.
Me : You've never suffered any hardship?
X : No
Me : Well you have. The joy I get from just sitting on the bank of a river having a cup of tea is probably joy you could never imagine.
...
Read 6 tweets
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“Charlie Munger has read more broadly and has had another 22 years to read further. He always a broader reader than I was and so has this ability to call on these references. Its it’s kind of silly to think that we can reinvent all the wisdom in the world. " Howard Marks
“I probably know Howard Marks as well as I know anybody. He is a very smart man. You have to believe in the tooth fairy to believe [Bernie Madoff] was having those figures by the methods he claimed to use. You wouldn’t have gotten that one by Marks for 2 seconds." Charlie Munger
"I was fortunate to have one of my occasional lunches with Charlie Munger. As it ended and I got up to go, he said something about investing that I keep going back to: “It’s not supposed to be easy. Anyone who finds it easy is stupid.” Howard Marks
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Charlie Munger: "[Jeremy Siegel] is comparing apples to elephants in trying to make accurate projections about the future.” Also: mungerisms.blogspot.com/2009/09/munger…
One of the most valuable behavioral investing edges is harvesting alpha from other investors which use accounting ratios based on accounting "earnings" instead of free cash flow. The investor must do actual work though instead of finding a # on a web site. knowledge.wharton.upenn.edu/article/siegel…
No one explains this source of investing outperformance from focusing on cash flow rather than earnings better than Michael Mauboussin. expectationsinvesting.com/pdf/earnings.p…
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Charlie Munger Trilogy: A Lesson on Elementary, Worldly Wisdom As It Relates To Investment Management & Business, USC 1994. old.ycombinator.com/munger.html The Psychology of Human Misjudgement, Harvard 1995 …ffettmungerwisdom.files.wordpress.com/2013/01/munger… USC Commencement Speech, 2007 google.com/amp/s/genius.c…
Charlie Munger's second trilogy:

Harvard Westlake School 2010 csinvesting.org/wp-content/upl…

Investment Practices of Leading Charitable Foundations. 1998 valuewalk.com/wp-content/upl…

Academic Economics fs.blog/2015/03/charli… UCSB 2003
What? You want to read more from Munger?

Dueling views of reform
sfgate.com/business/netwo…

Stanford: law.stanford.edu/stanford-lawye…

The Best of Charlie Munger: 1994-2011
valueplays.net/wp-content/upl…
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1/ One of the most underappreciated ways to increase your intelligence and avoid mental mistakes is to use a strategy known as inversion.
2/ Inversion is when you consider the opposite of what you want. Usually we ask how TO DO something. Instead, ask how TO NOT DO it.
3/ This shift in perspective can reveal fundamental errors that often get overlooked. Once spotted, you can avoid them or plan for them.
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