Charlie Munger Book Recommendations
Investing legend Charlie Munger is a voracious reader. He cites books from a range of disciplines, including physics, sociology, history, ethics and theology.
He emphasizes the importance of reading broadly across disciplines, to build a "latticework" of mental models. These books, from a variety of disciplines, may seem unrelated to investing, but can help you understand the world around you better.
1. Critical Thinking
Munger is famous for being a lifelong learner and reading widely. His extensive list of books includes history, autobiographies, psychology, and economics textbooks. He believes that understanding the economy as a whole is critical to investing and business success.
One of the most important things to remember is that not every idea or belief is correct. Rather than taking an extreme view of any topic, it’s important to think critically and consider the pros and cons of each argument. This is why Munger recommends a few books on logic and reasoning.
In this compilation of speeches, Munger talks about various subjects including decision-making and human misjudgment. The book also covers several topics related to investment philosophies and practices. This is a good option for anyone interested in learning about the general ideas that led to Charlie Munger’s success alongside Warren Buffett at Berkshire Hathaway.
2. Decision Making
Throughout his career, value investor and Berkshire Hathaway vice chairman Charlie Munger has encouraged others to develop mental models – or frameworks that simplify and clarify complex problems and situations. He has also spoken about the importance of gaining wisdom in order to make good decisions and avoid costly mistakes.
This book explores the process of acquiring wisdom through a series of questions and answers. Munger considers this a must-read for anyone seeking wisdom in life.
Behavioral decision research is something that interests Munger, as it provides insights into how managers make judgments and misjudgements. This textbook from Harvard Business School professor Max Bazerman brings together that research with observations of managerial behavior.
3. Mental Models
A mental model is a set of thinking tools that you use to understand life and make decisions. It’s a toolbox that is made up of your unique thinking traits, recollection of past decisions and their outcomes, life lessons, and more. It’s also your best weapon to avoid making bad judgment calls.
This book, or in our case, flash card set, is an essential guide for anyone who wants to improve their ability to think clearly and rationally. Its authors focus on broad thinking concepts rather than a specific field, so you’ll have a well-rounded repertoire to draw from as you solve problems in any area of life.
The book was included on the official list of books to be sold at Berkshire Hathaway’s shareholder meetings in 2010, a selection that Charlie Munger personally blurbed. It’s a useful reference book that breaks 50 mental models down into two or three sections, so you can easily look up a particular concept. It’s also very accessible, with short chapters and clear explanations.
4. The Tao of Investors
Munger is famous for his voracious reading and deep knowledge of a wide range of disciplines. This book compiles many of his quotes in a simple and concise format, making it a good choice for those who are new to investing.
In The Plex explains the philosophy behind one of the world's most profitable companies, Alphabet (NASDAQ: GOOGL). Learning how the company operates can help investors identify new technologies and businesses that could make money.
A Harvard-trained lawyer, Munger built his law firm into one of the country's top business law firms before turning his attention to outside ventures and investing. His patient approach to life has helped him amass a huge fortune. This book outlines the big ideas that drive his unique worldview.