The Wisdom of Charlie Munger

Business brain, episode 506 for Wednesday, December 6, 2023. Greetings, folks, and welcome to Business Brain, the show where we take an idea or three, we crunch through them, we dissect them, we analyze them such that we are each tuning our business brains every time we get together here. Sponsors for this episode include shopify.com businessbrain, where you're go to sign up for your $1 per month trial, and fastmail.com businessbrain, where you get 10% off your first year of my favorite email service that I use. We'll talk more in depth about those in a little bit. For now, here in Durham, New Hampshire.

I'm Dave Hamilton and I'm out here in Lafayette, California. I'm Shannon Jean. How goes it, man?

It comes and it goes, you know, it's chronic. Yeah, yeah.

Chronically comes and goes like a rash.

Yeah. Hey, I wanted to talk about live streaming today, Shannon, because we've had, well, collectively and individually, we've had some experiences with live streaming. In fact, this episode is the first episode we are recording on while live streaming on YouTube, Facebook, X, Twitter and LinkedIn.

It's terrific.

Yeah, we'll see how it goes.

Maybe. Maybe.

Right? We'll see how it goes.

Yeah. That's great. Yeah. So I did, you know, I had recorded my first spaces last week up on the X platform. It was kind of interesting. The one thing I would say, my experience was great. I was talking to Joe Portsmouth with, he's great copyright guy, training people how to write better content and create, you know, things that connect you with your customers. And we, he and I got connected talking about my reverse storytelling.

Oh, yeah.

Concept that we've talked about here that I've kind of started calling future casting so I could make it sound a little fancier.

Do you have futurecasting.com?

I do not have futurecasting.com because it's taken by somebody else. But if, but if you go to sjtips.com, that's my initials, sjtips.com you can see all about future casting. And actually, I'll send, you know, if you sign up, I could send you a, you know, a worksheet, talks all about it.

Yeah.

And you'll see Dave's nice quote up there. So it's just great when you have good, good people you can lean on. But the one thing that, that kind of messed us up was we were promoting this link because the way it works on X is you get this, okay, I'm going to do this show.

Yep.

Going to be on this date. You get this link, and you're promoting the link, you know, throughout the week ahead up to this. This event.

Right, right, right, sure.

And so we. We go to get started, and it didn't work. So Joe has, you know, he had to make a new link. And so here you start this new show that nobody has the link.

Right. That's kind of like what we're doing with this episode here. Yeah, yeah.

But this is practice, and we were hoping that, you know, you'd connect with more people.

Yeah.

So, you know, yes, we did have people coming in, and thank goodness my kids watched or listened somewhere. There was a few people there. But I think the key is. The key takeaway is you want to have your technology set up. You want to practice and be sure that especially if you've been building up on that link and sending, I mean, Joe. I have like 300 followers. Joe has like $50,000. So we. We missed out connecting on that. But the good news is he's going to promote it in his newsletter and we're going to record in other spaces sometime. So it's pretty cool. I enjoyed it and I look forward to it. It's kind of like this. I enjoyed, you know, a chance to interact with everybody, which is the reason I do this stuff.

Yeah, yeah, yeah. It's. It's interesting. Obviously, this is an audio show. Is our intention that it remains a primarily audio show, but as I found with some of my other podcasts releasing the. The Talking Heads video, essentially, some people like it. Some people like it. Right. And. And it, you know, so now you will be able. On Facebook and YouTube and, and X and all of that stuff, too, and LinkedIn, and if there's anywhere else that you want it to appear, let us know@feedbackusinessbrain show because that way we'll get it out there. But it is. While I'm used to doing this with macgeekab, we've been doing it with video for years now.

Right.

It is bizarre having this conversation with you and being able to see you. Yeah. Like, it does. I've noticed that it changes the dynamic a little bit.

Yeah, it does. Yeah, it does. Hopefully for the better, right?

Hopefully. Yeah.

Because you're, you're, you know, getting that. Those visual cues and, and little things like that, which are a little tougher y. Now we've, you know, I, I don't want to say we've mastered it, but I'm certainly a lot better than I was, you know, 505 episodes ago. Sure. But yeah, the video's cool. And my kids always have said the same thing. They're like, you guys should be on YouTube doing this as well. And I've kind of.

They're not wrong.

Yeah, they're not wrong.

They're not wrong.

Because I, because I mean, I, I, I will say it's probably not for me. I'm not the guy that's going to watch the talking Heads, but some people like it and it's great. I'm happy to connect with you any way I can.

All right. You know, when I started podcasting or really any of my businesses, having an online store was the farthest thing from my mind. And I'm sure that's true for many of you. And now I'm selling merch and all kinds of things in our Shopify store because it's so easy with Shopify. Shopify is the global commerce platform that helps you sell at every stage of your business. From the launcher online shop stage. Right. Like where we all kind of start, even though we didn't even expect to start there, to the first real life store stage, or, you know, we just hit a million orders stage. Shopify is there to help you grow. And, and whether you're selling shipping supplies or promoting productivity programs like we do here, Shopify helps you sell everywhere. From their all in one e commerce platform to their in person pos wherever and whatever you're selling, Shopify's got you covered. And you can sell more with less thanks to Shopify Magic, your AI powered all star. What I love about Shopify is it doesn't matter how big or small your business is, right? All of us, you start small. But no matter how big you want to grow, Shopify gives you everything you need to take control and take your business to the next level. This is why Shopify is the global force behind Allbirds, Rothy's and Brooklyn and and millions of other entrepreneurs of every size across 175 countries. And you can sign up for a $1 per month trial period at shopify.com/business brain, all lowercase. Go to shopify.com businessbrain now to grow your business, no matter what stage you're in. Shopify.com businessbrain and our thanks to Shopify for sponsoring this episode. All right, now let's chat about something we all use but rarely think about. Email, right? It's our digital heartbeat connecting us with the world. But let's be honest, managing emails can sometimes feel like a choreography. Enter our sponsor, Fastmail, our email savior for the past 20 years. Right. They're not your ordinary email provider. With Fastmail, it's all about privacy at the core. No ads, zero tracking, just your emails in their purest form. Fast Mail brings a whole new dimension to email management. It combines your calendar, your email and your contacts into one seamless app. And you can do it all online on a web interface too. And the features? Top notch. They've got masked email, which helps you keep your real address secret. Scheduled send puts you in charge of your send times. And the snooze function lets you tackle emails on your schedule. And their plan options are as diverse as you Our listener base. Right. Tailored for both personal and business use. Solopreneurs Large companies. If you're thinking about making the switch, Fast Mail makes it a breeze with their straightforward import and export tools. When I migrated about seven years ago from Gmail, I just went into Fast Mail, logged it into my Gmail account and I went to sleep and then I woke up and all my mail, everything was migrated over to Fast Mail. Really amazing. It's been a game changer. Fast Mail has streamlined my email process, enhanced my privacy, and overall just made email more enjoyable. So if you're looking for an email provider that combines privacy, efficiency and customization, Fast Mail is your go to. To get started, visit fastmail.com businessbrain to snag 10% off your first year. And don't forget to follow them on Facebook, X Mastodon and LinkedIn. Fastmail.com businessbrain fastmail redefining the email experience for you. And our thanks to fastmail for sponsoring this episode. All right, Shannon. About a week and a half ago, I think now, Charlie Munger passed away. He was the business partner, co founder of Berkshire Hathaway or I guess business partner, business partner of Warren Buffett. They acquired Berkshire Hathaway and grew it from changed it from what it was into.

Furniture store.

Yeah, exactly. Right? Yeah, essentially. Yeah.

Yeah.

He I found an article that talked about three parenting lessons that he wanted his kids to hold on to until their hundredth birthdays. He passed away at the age of 99. He didn't quite make it. But there were some interesting lessons in here. The first one really kind of harkens back to a show that we did not that long ago where he talks about this was Charlie's father was a lawyer and one of his best friends was somebody named Grant McFadden who was Omaha's pioneer Ford dealer. And he was also a client. He was, he says he was, you know, a self made man really, really kind and full of integrity. And then his dad had another client who was this pompous, unfair and difficult person. And one day Charlie asked his dad, why do you do so much work for Mr. Pompous instead of doing more work for, you know, the wonderful people like. Like Grant? And he says, well, Grant treats his employees right, his customers right. And his problems right. He doesn't have enough remunerative. Remunerative law business to keep you, his son, in Coca Cola. But Mr. Pompous is a walking minefield of wonderful legal business. And there's an interesting lesson there. Right. You might need to sell your services to an unreasonable blowhard, especially if that's what it takes to feed your family. But you want to run your own life like the, The. The guy, like this Grant McFadden guy. And I thought that was a good lesson.

It is. And I think it also kind of backs up this concept we've talked about a lot, is that no matter what business you're in, we're in the problem solving business.

Yeah.

And if this Grant character there didn't have as many problems to solve, as an attorney, you're looking for people that have problems to solve. And the guy who's the pompous doesn't treat people right. Maybe he's not the most straight shooter in the world. Cutting corners. Well, that's your legal bread and butter.

Bread and butter.

And so the sooner you kind of embrace this concept that. That we're all in the problem solving business, that's it. Because without those problems, there is no business.

Right.

And. And you get your team, you know, around that concept, because every, you know, I could just remember people just complaining one thing after another, said, hey, that's what we get paid to do.

We.

Solving these people's problems.

So like Munger says, one of my favorite attorneys who I actually ran quite a bit of work. Not that we have a lot of work for attorneys, which I suppose speaks to my character. Yes. But I remember he was a client of mine. At first I helped him with his computers, and then when I needed an attorney, I reached out to him and obviously helped. And I was dealing with this scenario where someone was not being reasonable and I had to file suit against. It was terrible. Like, I just. I couldn't. It was. I couldn't even fathom that I was in this position. And I remembered saying to him, gosh, I just. They're just being so unreasonable. Like, why don't they just see the logic here? And he laughed and he says, I make my Living off of unreasonable people. It's like, yeah. Oh. So lesson lesson number two from Charlie Munger was always return a borrowed car with a full tank of gas. And he shares the story. On the last day of a family ski vacation, they were driving back to the airport to, you know, drop off the car and make the. Make their flight. And he noticed that his dad took a 10 minute detour to gas up the car, which had a half a tank of gas. And he asked him, he says, you know, we were running late for our flight. Why did you take that detour? And his dad was, you know, flabbergasted that he would even ask. He says, charlie, when you borrow a man's car, you always return it with a full tank of gas. And Charlie took that lesson to heart. And when he was in his freshman year of college at Stanford, a friend of a friend lent him his car. And really the guy didn't even want to lend him his car, but he was convinced to by mutual friends. And he says, you know, that the tank was. He didn't need to drive it very much, but he noticed that the tank was half full. And so he, you know, filled up the tank on this car. He was reminded of his dad's story, and the guy noticed. And he says they've become great friends. He was a groomsman at Charlie's wedding. Like, you know, always good to take care of people. It will be remembered. Yeah.

And it, it goes both ways. You know, those little things that you do, it's that reciprocity. You know, someone has loaned you something of value and you, you darn well better, you know, reciprocate. And, you know, I can remember, like, it goes the other way. We had the big Thule rack that you can put on top of your big SUV to carry all the stuff. When we were kid, when our kids were young and had a friend of ours that borrowed our rack. And this big gray box got it back. And when he was taking it off, he goes, oh, you know, this part broke inside, but everything still works fine. So that, that sounds great. It'll be okay. Here you go. Unloaded it, set it down on my driveway. And I was like, okay. I mean, we knew them pretty well, but they weren't super close friends where I could, like, if you did that to me, Dave, I'd be like, hey, what the heck? Bring it up. And I didn't know him that well, so I didn't say anything. But I still remember to today that he broke this thing that I had to go order from the Thule store. Now, the way you would do it, if you're Charlie Munger's dad is. Is. Or you would say, hey, man, this clip on these. This inside latch broke. I've ordered you a new one, as a matter of fact, because they're kind of flimsy. I ordered you two.

Exactly.

So you'd have an extra.

Yep.

And so then that's the way you remember the story. Like, dude, that guy broke this thing and bought me not just one, he bought me two. So in case it happened again in the future.

So I told a story on gig gab recently, the show I do for musicians. I'm a drummer, and I had to go to New York one night of a theater. I don't live in New York. I live in New Hampshire. I had to be out one night of this theater run. And we found this drummer that no one had. We knew of him, but they'd never used him at the theater to sub for me.

Okay.

We had run through, like, nine drummers. Like, no one that we knew that was a known quantity was available on this one night. And we were asking months out, like, you know. Yeah. But anyway, so we bring this guy in. I went out of my way to rehearse the show for him, and I made great notes and, like, got him through the show. Great. And he texts me. Now I'm on the train on the way back from New York, and he's finished the show at the theater. And I'm, you know, mildly curious about how things went. And he's like, hey, it went great, by the way. I moved everything around on your drums. You might want to get there a little early tomorrow. Nice to. To get things set. And I'm like, okay. And so I texted him back. I'm like, what did you, like, did you put. Did you even attempt to put it back? Like, I know you're not going to get it. Exactly. Like, I had it, but what am I dealing with? And he was like, no. And it's like, you know that I'm never going to call you again, right?

Yeah.

Like, there's no chance of this. And it wasn't horrible. I went in, and it took me 20 minutes to, like, rearrange it. But it's just like.

But it's little things, man.

Really? Really.

And it's so easy to flip the script on it.

That's it.

You can make a positive impression on someone, whether it's a customer, an employee. You know, it's almost like the. The two tokens.

Yeah.

Customer service Thing.

Right.

But in the reverse life.

Yeah.

Yeah, in the reverse. So, yeah, you know, you. If something. Oh, wow. Hey, you know, maybe I only drove your car for three miles, but I'm darn sure going to fill up the tank because you loaned it to me and helped me out, all that kind of stuff.

Yeah. It would have been super easy for this drummer to just, like, say, like, I tried to put it back. I know you're gonna have to go through some trouble, but hey, while I was there, I noticed that your piece of, like, muffling gel on the snare drum was a little old, so I. I put a replacement on there for you. Like, anything. That little gesture of I'm acknowledging this.

Yeah. Just even alerting to you to the fact that I know I didn't get it right, but I did the best I could get it back.

Exactly.

That's all it would have taken.

And it would have taken him five minutes to do this.

Yep, that's a great lesson.

The final one from this Charlie Munger article, which we'll link in the Shownotes at Businessbrain show, is from Wendy Munger, his daughter, who said, my dad often used the family dinner table as a forum to try and educate us children. One of his favorite educational tools was the morality tale in which someone faced an ethical problem and had to choose the correct path. I remember a story he told us about a financial officer at one of his companies who made a mistake that resulted in the loss of hundreds of thousands of dollars to the business. Once he realized his mistake, he went directly to the president of the company and told him all about it. And the president said, this was a terrible mistake and we don't ever want you to make another one like this, but people do make mistakes and we can forgive that. You did the right thing, which was to admit your mistake. If you had tried to hide it or cover it up for even a short period of time, you would be out of this company. As it is, we'd like you to stay. What a great lesson.

Like, it really is. And especially for entrepreneurs, business owners, leaders, in any capacity, if you make a mistake, I mean, you need to own it and, you know, demonstrate. Demonstrate to your team, hey, I screwed this up. I didn't handle this correctly. I didn't. If, because everybody is watching you, you.

Know, it will be known right away or later, it doesn't, like, matter. It will be known that you may.

If it wasn't all your fault, I would argue that, you know, super accountability, yeah, really serves you well as A leader. You know, we always. We use that phrase here. If you want to critique, you know, look in the mirror.

In the mirror.

And if you want to compliment, look out the window.

Yeah.

So it's much better if your employees see, wow, Shannon screwed up, but he took the heat for it. He paid for it or somehow and didn't push it out on employees or someone else could. Somebody who working for me that could have been blamed. Don't blame anybody. Just take the heat. Make it a learning lesson and share it a lot amongst your team.

Show your team that you are not infallible because it will give them the freedom to tell you when they've made mistakes. Yes. But it will also give them the freedom to make mistakes in the first place. And you want that. I feel you want that. Yeah.

It builds credibility. It helps to connect and build empathy with your team, because, let's face it, when you're writing, when you're signing someone's check or approving the. The direct deposit, you know that that changes the relationship. So you want to try to connect with them on another level. And it's just a great lesson.

I think so. Yeah.

He did it. It's terrific.

Yeah. Yep. I think so. We're at about the 20 minute mark. I. I want to share this one last thing that comes from Charlie Munger's business partner, a guy named Warren Buffett. And he said he has one piece of advice that is your or one greatest measure of success in life. And if you don't have it, he says, your life is a disaster. And he says that you should look, you should use this as, you know, a retrospective. And he says, if you get to my age in life and nobody thinks well of you, I don't care how big your bank account is, your life is a disaster. And he says, I know a lot of people who have a lot of money and they get testimonial dinners and they get hospital wings named after them, but the truth is that nobody in the world loves them. And he says, because you can't buy love, you know, you only get that by earning it.

And when you sent this to me, I commented, I was like, yeah, that's. I mean, I would argue that, you know, love is the most important thing for all of us.

Right.

Because it's that connection that, you know, that you take, keep with you forever, hopefully. And I would say that I agree with Warren, but it's something the rubric you should use throughout your life. And, you know, well, it goes back.

To your reverse storytelling. Right. Tell the story at the end of your life that you have all these people who love you. Yeah.

Yeah. And you, I. If your kids don't want to be around you. And I know a lot of very successful wealthy people. And, you know, it can be a challenge to connect and not to go all in, even after you've met those, you know, your minimum requirements or whatever it is, and you're successful and you're making a ton of money. You need to be connected with people. And it is just as important, maybe more so, once you've met your needs and paid your bills, that people want to be around you and people think highly of you. And certainly, you know, Warren Buffett is. Is correct and he's got an interesting narrative. We could talk a long time about it, but he's done a great job and his team certainly around him has done a great job of crafting this kind of homey, built, you know, billionaire, because, you know, there's other folks that are worth billions of dollars that nobody.

Likes that don't have the public image that he does.

Yeah, he's done a great job.

He has.

It's super commendable.

So I agree. I agree. Thanks for hanging out with us, folks. Again, like I said earlier, feedback at BusinessBrain show is where we want to hear from you. If you found an interesting article that has an anecdote that we could, like, crunch together to tune our business brains, send it in. Anything else that you want to send in, send it in. Feedbackusinessbrain Show. And do us, do us a big favor and keep on living that charmed life, would you? We'll see you on Friday, I think. Friday, I think so. Casual Friday. That's right. It.