Charlie Munger

[BigRedBuster]

Since we talk about business and economy a lot.   
 

I laughed at the quote in this tweet. 

[BigRedBuster]

 

[BigRedBuster]

 

[TGHusker]

Wise words here:

Munger on Self-Pity: "Generally speaking, envy, resentment, revenge, and self-pity are disastrous modes of thought. Self-pity gets pretty close to paranoia… Every time you find your drifting into self-pity, I don’t care what the cause, your child could be dying from cancer, self-pity is not going to improve the situation. It’s a ridiculous way to behave. 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 that every mischance in life was an opportunity to behave well. Every mischance in life was an opportunity to learn something and that 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."

[ZRod]

16 hours ago, BigRedBuster said:

Since we talk about business and economy a lot.   
 

I laughed at the quote in this tweet. 

Charlie and I think a lot alike, but I'm poor 

 

The first time I learned what EBIT was I thought it was the stupidest metric I'd ever heard of. It's like telling a host at the party that you made enough cookie dough for everyone to have one cookie, but you don't tell them your kid ate 25% of it before you baked them. Like what's the point?

[BigRedBuster]

6 minutes ago, ZRod said:

Charlie and I think a lot alike, but I'm poor 

 

The first time I learned what EBIT was I thought it was the stupidest metric I'd ever heard of. It's like telling a host at the party that you made enough cookie dough for everyone to have one cookie, but you don't tell them your kid ate 25% of it before you baked them. Like what's the point?

It has its place, just like many accounting measurements.  The problem I have with it (and I think Charlie's point) is that investment bankers GREATLY over exaggerate its importance in investing.  Sometimes it appears that they ONLY look at that.  It's stupid and disgusting when it can negatively affect how they handle a company.

[TGHusker]

2 hours ago, BigRedBuster said:

It has its place, just like many accounting measurements.  The problem I have with it (and I think Charlie's point) is that investment bankers GREATLY over exaggerate its importance in investing.  Sometimes it appears that they ONLY look at that.  It's stupid and disgusting when it can negatively affect how they handle a company.

More like:   We are the best 3-9 team ever.  Or  We look the best in one score losses ever.   Or  We have a better recruiting record than all other Big 10 West schools.  

That is the "Before".   What is the 'after" result.  

 

As a corporate credit manager, I want to know the bottom line - period.   I want to know the 'after' not the 'before'.   A company can look good EBITDA wise but that doesn't tell the whole story. 

 

 

Earnings Before Interest, Taxes, Depreciation, and Amortisation,

[BigRedBuster]

52 minutes ago, TGHusker said:

More like:   We are the best 3-9 team ever.  Or  We look the best in one score losses ever.   Or  We have a better recruiting record than all other Big 10 West schools.  

That is the "Before".   What is the 'after" result.  

 

As a corporate credit manager, I want to know the bottom line - period.   I want to know the 'after' not the 'before'.   A company can look good EBITDA wise but that doesn't tell the whole story. 

 

 

Earnings Before Interest, Taxes, Depreciation, and Amortisation,

It really is a measurement that only means something to someone looking to buy a company and have no debt.  What would the company had earned if it had no debt and just off of operations.  It has it's value.  It's just way over weighted on decisions.  I much prefer Charlie and Warren's way of looking at a company.

[BigRedBuster]

I really wish I was intellectual enough to read books like this as much as people like him. 
 

But, instead I read this message board.