Markets are in turmoil.
Investors are crestfallen.
But not shareholders of Berkshire Hathaway.
Not merely because Berkshire is up over 17% for the year and the S&P 500 is down nearly 8%.
(Warren foresaw the storm and tacked to a safe harbor.)
But because of the view seasoned student-shareholders of Berkshire Hathaway learned from Warren and Charlie.
That attitude and philosophy can be found elsewhere.
Read hedge fund letters here
In song:
“Let it rain and thunder.
Let a million firms go under.
I am not concerned with
Stocks and bonds that
I’ve been burned with.” -- “Who Cares?”-- George and Ira Gershwin
In poetry:
“If you can meet with Triumph and Disaster
And treat those two imposters just the same...
Yours is the Earth and everything that’s in it,
And---which is more---you’ll be a Man, my son!” -- “IF---“ -- Rudyard Kipling
In philosophy:
“That which does not kill me makes me stronger.” -- Friedrich Nietzsche
In movies:
“It ain’t how hard you hit. It’s about how hard you can get hit and keep moving forward.” -- Sylvester Stallone as “Rocky Balboa” (2006)
And in this oft-quoted 1994 Commencement Address by Charlie Munger at the USC Law School:
“Life will have terrible blows, horrible blows, unfair blows. It doesn’t matter. Some people recover and others don’t. There I think the attitude of Epictetus is the best. He thought every mischance in life was an opportunity to behave well. Every mischance in life was an opportunity to learn something and your duty was not to be immersed in self-pity, but to utilize the terrible blow in a constructive fashion. That is a very good idea.” -- Charlie Munger
For Charlie’s complete speech, digitally enhanced, go to:
The Terrible, Horrible Unfair Blows
And in his very long life Charlie Munger did truly suffer those terrible, horrible, unfair blows.
While still in his twenties, Charlie lost everything in divorce. He took a room at the University Club, drove a battered yellow Pontiac and soldiered on.
Charlie lost his left eye to a failed cataract surgery. When his right eye was at risk he learned Braille.
When Charlie’s nine-year-old son, Teddy, was stricken with a fatal leukemia Charlie walked the streets “and cried and cried.”
Yet he endured and triumphed, dying a celebrated billionaire-philosopher-philanthropist, a month shy of his 100th birthday.
And in his final interview with Becky Quick, Charlie solemnly recalled Teddy’s passing, but hailed the scientific breakthroughs which assure no child today should ever suffer Teddy’s fate.
The Wisdom of Epictetus
Charlie Munger always viewed the ups and downs of life as but two sides of the same coin that is the common currency of life.
Charlie extolled the principles of the Stoics, the teachings of Greek slave-philosopher, Epictetus, whose cruel master broke the slave’s leg upon a whim, leaving him crippled for life.
“It’s not what happens to you, but how you react to it that matters.” -- Epictetus
“Men are disturbed not by things, but by the view which they have of them.” -- Epictetus
And Charlie has attributed his popularity in China to a Confucian ethic, embraced in “Poor Charlie’s Almanack,” a bestseller in Chinese translation.
“Our greatest glory is not in never falling, but in rising every time we fall.” -- Confucius
“It does not matter how slowly you go as long as you do not stop.” -- Confucius
“It’s basically a Confucian attitude---I think you have a moral duty to become as rational as you can.” -- Charlie Munger
“People in China really do regard Charlie as an example of modern day Confucianism.” -- Li Lu
Grief, Loss & Kübler-Ross
Crestfallen investors might benefit from the great work of Swiss psychiatrist Elizabeth Kübler-Ross, MD, who pioneered our understanding of the inner structure of grief, the human reaction to perceived loss.
Her model divides grief-work into five stages:
- Denial: This is not happening!
- Anger: How dare this happen!
- Bargaining: How can I reverse what has happened?
- Depression: I am crestfallen.
- Acceptance: Nothing to do but move on.
Bookends of Grief-Work
A wise friend bookends these five stages with two more:
- Innocence: I know not loss or grief.
- Enlightenment: I understand that loss and grief are part of life and I must adapt and grow wiser.
And Charlie simplifies that idea in an analogy any child can understand:
“You have to deal with daylight and night. Does that bother you very much? Sometimes it’s night and sometimes it’s daylight. Sometimes it’s a boom and sometimes it’s a bust. I believe in doing as well as you can and keep going as long as they’ll let you.” -- Charlie Munger
To say, in good times and bad, and truly believe:
"This Too Shall Pass" -- Persian Proverb
Full disclosure: longtime student-shareholder of Berkshire Hathaway and VOO
