American billionaire investor Charlie Munger has just passed away in California, a few weeks before his hundredth birthday, which would have taken place on January 1, 2024.

Warren Buffett’s right-hand man, Mr. Munger was famous for never having taken an economics or finance course. He studied law at Harvard University, then co-founded the law firm Munger, Tolles

Vice chairman of Berkshire Hathaway since 1978, Charlie Munger was known for his colorful, controversial, funny, or simply brilliant statements. Here are some of them, along with some context.

Here Munger debunked a stubborn myth in finance: that inflation prevents us from getting rich. Of course, if you live in Argentina and inflation is 100% per year, that’s a problem. But overall stock market returns in developed countries have historically been 5% more than inflation on average for centuries, for as long as manuscript records exist in archives in France and England. And even if the purchasing power of a dollar decreases over time, the standard of living of the population has constantly improved for several generations. In short, Munger urged us to stop seeing inflation as a destructive force in our lives.

We often think that greed runs the world, but Charlie Munger targeted envy as the main culprit. We may have everything, but if our neighbor or our brother-in-law has more than us, we will not be satisfied. Munger liked to say that he was successful in his life because he didn’t let envy define his career, and that he was happy to get rich in the long run and let others try to succeed. ‘get rich quickly. The happiest people don’t necessarily have everything, he said. They just appreciate what they have.

Charlie Munger was not a great admirer of economic forecasts, which he rarely ventured to make. Decades spent following the markets had inoculated him against predictions of all kinds. That hasn’t served him badly: $40 invested in Berkshire Hathaway stock in the late 1970s would be worth $546,869 today.

The world works best when it is propelled by necessity and improvement, not by the past and recriminations.

One of his worst business moves, he said, was investing in Chinese online retailer Alibaba, whose stock market value has collapsed 75% since its peak in 2021. On the other hand , one of the investments that made him most proud was buying millions of dollars worth of Bank of America and Wells Fargo stock in March 2009, at the height of the financial crisis, in the investment account from a Los Angeles hospital where he was in charge of the finances. “It was a once-in-40-years opportunity,” Munger said afterward.

The person who spends $980 a month to drive a car of the year is really spending $170,000. This is the amount she would have in her investment account after 10 years assuming annual returns of 7%. Munger doesn’t tell us what to do or what to choose. He tells us how to calculate.

Munger is not putting on white gloves here to say that investing correctly is first and foremost a question of behavior. Stock markets around the world sometimes fall. It can not be helped. What’s the point of panicking? Humans have a hard time dealing with pain, he said. So we rush to the jar of aspirin. In investing, this hurts returns and makes us poorer in the long term. The sooner we realize this, the sooner we can let our investments work in peace. No matter what the market does.

Have a good rest, Mr. Munger.