Billionaire Charlie Munger’s ’Psychology of Human Mismanagement’ speech is gold for every investor. Watch

Author and investor Brian Feroldi posted a tribute to the late Charlie Munger on the social media site X (formerly Twitter). He wrote, "RIP Charlie Munger. I'll always remember him for this talk he gave on the Psychology of Human Misjudgement. If you have an hour, it's well worth the time" (sic).

The attached video is a speech by Munger called 'The Psychology of Human Misjudgement' dated June 1995. The speech was given by Munger to Harvard University students and speaks about the framework of decision-making and the factors contributing to misjudgements.

The hour-long audio has been posted on X, watch it here. You can also read a transcript, updated by Munger himself in 2005 here.

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Who is Charles Munger?

Charles Munger, the alter ego, sidekick, and foil to Warren Buffett for almost 60 years as they transformed Berkshire Hathaway Inc. from a failing textile maker into an empire, has died. He was 99.

He died on Tuesday at a California hospital, the company said in a statement. He was a longtime resident of Los Angeles. “Berkshire Hathaway could not have been built to its present status without Charlie’s inspiration, wisdom, and participation," Buffett said in the statement.

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A lawyer by training, Munger (rhymes with “hunger") helped Buffett, who was seven years his junior, craft a philosophy of investing in companies for the long term. Under their management, Berkshire averaged an annual gain of 20% from 1965 through 2022 — roughly twice the pace of the S&P 500 Index. Decades of compounded returns made the pair billionaires and folk heroes to adoring investors.

Munger was vice chairman of Berkshire and one of its biggest shareholders, with stock valued at about $2.2 billion. His overall net worth was about $2.6 billion, according to Forbes.

Also Read: 7 timeless investing lessons from Charlie Munger

Personal Philosophy

Munger was an outspoken critic of corporate misbehavior, faulting as “demented" and “immoral" the compensation packages given to some chief executives. He called Bitcoin “noxious poison," defined cryptocurrency generally as “partly fraud and partly delusion" and warned that much of banking had become “gambling in drag."

“I love his ability to just cut to the heart of things and not care how he says it," said Cole Smead, CEO of Smead Capital Management, a longtime Berkshire investor. “In today’s society, that’s a really unique thing."

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Though Munger aligned with the US Republican Party, and Buffett sided with Democrats, the two often found common ground on issues like the desirability of universal health care and the need for government oversight of the financial system.