Berkshire Hathaway  chief Warren Buffett is known the world over for offering up parables and one-liners from his deep well of investing wisdom. But some folks might argue that Buffett isn't the top thinker at Berkshire.

Sure, Buffett's right-hand man Charlie Munger may not have the cozy, down-home touch that Buffett does -- his wisdom comes more like a blaring buzz-saw than a box of chocolates -- but there's no doubt that he measures up to the praise of his fans.

In order to gather some of the greatest Munger-isms out there, I turned to five Fools to offer their favorite of his many gems.


Jason Moser: I like to read. So when I first read this quote from Charlie Munger, it struck a chord:

In my whole life, I have known no wise people who didn't read all the time -- none, zero. You'd be amazed at how much Warren [Buffett] reads -- at how much I read. My children laugh at me. They think I'm a book with a couple of legs sticking out.

I remember as a child how much I enjoyed reading, and I enjoy it even more today. As a father, I've had the chance to watch my daughters learn the joys of reading as well, and I marvel at how well they read already at such young ages.

With technology today, reading seems to be taking a back seat to convenience and speed. If you can't cram it into 140 characters or less, then you've already lost half your audience. But reading is exercise for your brain; it teaches you to think and ask questions. It makes you want to learn more. In any walk of life, no matter what the pursuit, reading makes you better. It's that simple.

Dan Dzombak: My favorite Munger quote ranks as one of my favorites because it is applicable in all areas in life:

A majority of life's errors are caused by forgetting what one is really trying to do.

It is very easy to get distracted from your goals whether they are life goals, investing goals, work goals, health goals, or what have you. Having an intense focus on your goals is one of the keys to success in any pursuit. Its power has been exemplified and emphasized by the likes of Steve Jobs, Warren Buffett, Bill Gates, and countless others. Staying on track requires you to constantly refocus on your goals, say "no" to things that would interrupt your progress, and push forward through good times and bad.

In investing and life, it is very easy to be distracted by the tidal wave of news and content every day. Most of it doesn't matter to your investments, and it takes a singular focus to look past the shiny distractions and focus on what matters.

Scott Phillips: It can be tempting to characterize Charlie Munger as the Mr. Hyde to Warren Buffett's Dr. Jekyll. That may be a little unfair, but while Buffett tries to cajole with some good-natured banter, Munger has little time for such niceties.

The octogenarian polymath is supremely rational and just a little grumpy -- just how we like him -- and it's hard to escape the feeling that he enjoys cutting irrationality down to size. Chief among his recent targets -- and there have been a decent few -- is gold. Or, more precisely, those who would invest in the shiny yellow metal. While Buffett resorted to numbers in his Chairman's letter on the topic, an excerpt of which was published in Fortune, Munger took a characteristically forthright approach, saying:

I don't have the slightest interest in gold. I like understanding what works and what doesn't in human systems. To me that's not optional; that's a moral obligation. If you're capable of understanding the world, you have a moral obligation to become rational. And I don't see how you become rational hoarding gold. Even if it works, you're a jerk.

I guess he won't be counting on an invitation to Barrick Gold's holiday parties any time soon.

Chuck Saletta: Perhaps the most important Charlie Munger quote of all time is this simple one:

Spend less than you make; always be saving something. Put it into a tax-deferred account. Over time, it will begin to amount to something. This is such a no-brainer.

Munger's words of wisdom have the power to turn almost anyone who follows them throughout a career into a millionaire, even if the market goes nowhere for all those decades. As it turns out, even in a prolonged bear market, regularly socking away money into an index fund like the S&P Depository Receipts still trounces what you wind up with from not investing at all.

John Divine: Munger is known for his out-of-the-box thinking, and I think this is a great example:

You're looking for a mispriced gamble. That's what investing is. And you have to know enough to know whether the gamble is mispriced. That's value investing.

It's interesting to hear one of the most successful investors of all time essentially describe himself as an informed gambler. The key word of course is "informed," and when it comes to Munger, that's an understatement. Just because he dropped out of his undergraduate studies doesn't mean the man neglects his research.

His record, even apart from his years with Buffett, is exemplary: Between 1962 and 1975, while the Dow Jones Industrial Average was gaining about 5% per year, Munger's investment firm was more or less quadrupling that. At the end of the period, the Dow had nearly doubled; Munger's portfolio was up more than 1,100%. That's a jockey I'll bet on any day -- a jockey who's gotten very good at finding mispriced gambles.

Heading to Omaha
On May 4, Berkshire Hathaway will be holding its epic annual meeting in Omaha, and the Fool will be there to bring you everything you need to know from this "Woodstock for Capitalists." Simply click here to follow along with all of the Fool's coverage.

The article Charlie Munger's Words to Live By originally appeared on Fool.com.

Matt Koppenheffer owns shares of Berkshire Hathaway. The Motley Fool recommends Berkshire Hathaway. The Motley Fool owns shares of Berkshire Hathaway. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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