Importance Of Simplicity
Charlie Munger

Importance Of Simplicity By Charlie Munger

Charlie Munger has a section on the importance of simplicity. Bevelin advised: “Turn complicated problems into simple ones. Break down a problem into its components, but look at the problem holistically.”

  1. Keeping things as simple as possible, but no more so, is a constant theme in munger’s public statements. In  a joint letter to shareholders, munger and Buffett once wrote: “Simplicity has a way of improving performance through enabling us to better understand what we are doing.”

  2. By focusing of finding decisions and bets that are easy, avoiding what is hard, and stripping away anything that is extraneous, Munger believes that an investor can make better decisions. By “tuning out folly” and swatting away unimportant things “So your mind isn’t cluttered with them… you’re better able to pick up a few sensible things to do,” said munger.

  3. Focus enables both simplicity and clarity thought, which in munger’s view leads to a more positive investing result.

If something is too hard, we move on to something else. What could be simpler than that?- Charlie Munger 

 

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