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  • Writer's pictureTeam Carnelian

Charlie - Our North Star

Updated: Dec 4, 2023

Greetings from Team Carnelian!!!

In the history of mankind, there rarely comes a human being who single handedly & selflessly impacts the lives of millions of fellow humans materially in more than one way. They etch their name in the legends of history and acquire saintly or God like stature. Charie Munger is one such saint who in his lifetime impact millions in getting better as human being and investors. The way Lord Krishna (Guru) navigated Arjuna (disciple) whose learnings are preserved in the Bhagawad Gita, the teachings of Charlie Munger (investment & life guru), will live forever guiding billions in centuries to come.


His passing away has left a vacuum never to be filled by anyone. Our letter this month is a tribute to this humble giant whose life principles will be engraved in our heart forever.


Though, it is an impossible task to comprehend his 99^99 years of learning, here are some of his life & investing wisdoms which deeply inspire us.


We admire Charlie’s multidisciplinary approach, encompassing fundamental human psychology, the basic truths, and his core investing principles. His mantras for success were an aptitude for lifelong learnings, intellectual curiosity, avoidance of envy and resentment, reliability, being rational and objective.


One of his lessons which we took time to understand was “Invert, always, invert” – tell me where I am going die and I will not go there. Many of the problems are best solved when they are addressed backwards. It encourages individuals to look at challenges from a different perspective – by considering the opposite or inverse of the problem at hand.


His mantra for success and a happy life was to avoid what brings misery. He said three things are guarantee to misery

  1. envy and resentment

  2. being unreliable,

  3. not learning from mistake of others.

These are such timeless, deep & wise ideas one can be applied universally to be successful.


Similarly in investing one can achieve success by knowing and avoiding unwanted risks.

He used to mention that when a right opportunity comes to a prepared mind and there is willingness to bet heavily, when the odds are extremely favourable it results into a L.O.L.L.A.P.A.L.O.O.Z.A effect. Congruence of multiple factors acting in one direction resulting in a nonlinear outcome (power of linear compounding resulting in nonlinear outcome). Our Magic basket framework was born & inspired from this wisdom.


Launch of our Shift Strategy was again influenced by this thinking. We will always remain indebted to him for putting this in our mindset.


Similarly, he is known as a silent partner of the legend investor Warren Buffet and is known for his truth and bluntness. His insight helped Buffet move from a pure Benjamin Graham – style investing of looking for Cigar Butts to focus on great businesses like Coke, Apple, Gillette. In Buffet’s word, his greatest lesson from Charlie is “A great business at a fair price is superior to a fair business at a great price.” Our Marwari upbringing oriented us towards buying cheaper businesses initially. It is only repetitive reading and experience; we too have imbibed this philosophy into our investing. We are far more comfortable buying good business at decent price than before.


He used to simplify complex investing process with mental models involving multiple disciplines and their interconnectedness. Most people are trained only in one model and are at a serious disadvantage to people equipped to deal with a muti-disciplinary model. Humorously he used to mention, if you don’t learn multiple models, you go through a long life like a one-legged man in an ass kicking-contest. As mentioned by him, simplicity is the result of long, hard work, not the starting point. He had an aptitude to ignore unwanted details and focus on right parameters to arrive at a rational decision. This is very hard to achieve but we have created our own frameworks and are always striving towards making things simple for ourselves and our clients.


He emphasised importance of simplicity, temperament, patience, and curiosity. Most importantly he emphasised the importance of reading and used to mention: In my whole life (99^99), I have known no wise people who did not read all the time – none, zero. While it will be hard to match his level of reading, we have culture of reading and encourage every team member to read all the time. Asking questions is first step towards learning is our own internal mantra.


One can go on and on about his wisdom, wit, and richness of life. He was one with Buddha, Confucius if we can find many more (idea being he combination of multiple big figures). Lifelong he played a significant role of both student and teacher.Though we do not have Charlie any more on this planet, his life and legend will always live on. We will always remain grateful to him for impacting us in so many ways. May his soul Rest in Peace.

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