San Francisco Chronicle - (Sunday)
BILLIONAIRE’S 2005 BOOK FINDS AN AUDIENCE IN S.F.
‘Poor Charlie’s Almanack’: Charles T. Munger’s sage advice resonates with today’s tech set
Every once in a while, the staff at the San Francisco Public Library notices a surge in interest for an older book in their collection. One such spike happened in the fall, when all of a sudden there were 65 holds on the library’s single copy of the 13yearold nonfiction title “Poor Charlie’s Almanack: The Wit and Wisdom of Charles T. Munger.” The library scrambled to buy more copies, but the book was out of print, forcing them to order from a specialty vendor in the Midwest. The book’s popularity hasn’t waned in the months since: as of this writing, there are 24 holds on the library’s 15 copies.
The book — a collection of speeches and wisdom from billionaire Berkshire Hathaway Vice Chairman Charlie Munger — is a favorite among investors and entrepreneurs across the world. But the book’s message of developing practical decisionmaking skills and new mental models is especially attractive to the “work smarter not harder,” optimizationobsessed Bay Area tech world.
“It’s at the point now where I hear about it like once a month,” said Austen Allred, cofounder and CEO of the Lambda School, an online computer science course based in San Francisco where students pay only after they’ve landed a job. Allred discovered the book after reading as much as he could about investing, which led to Warren Buffett, and finally Munger. “It’s just so practical and so folksy that it’s so relatable, but at the same time, it’s so wise,” he said. He’s not the biggest fan of the book’s aesthetics — the 548page tome has the dimensions of a coffeetable book, and is interspersed with caricatures and frequent sidebars — but it’s worth it, he said. “It’s the worst format in the world; I hate the size of the book, I hate trying to read it, but it’s just wisdom without pretension is how I would describe it.”
For decades, there’s been an obsession with Buffett and Munger. The pair’s selfmade success has created a mystique around the two Omaha, Neb., natives, spawning an endless stream of online fascination: What are their daily routines? Their advice for Millennials? What does Buffett order at McDonald’s? But while Buffett is the more visible of the two, via his annual shareholder letters and media appearances, Munger is relatively mysterious. At shareholder meetings, when Buffett asks whether Munger has anything to say to the adoring crowd, Munger is famous for usually declaring that he has “nothing to add.”
But Munger hasn’t been silent all these years, often giving speeches at places like Harvard and USC. Peter Kaufman, a Southern California executive and friend of Munger’s, got Munger’s permission to collect his talks and other wisdom as a book, which came out in 2005. “This book is something of a publishing miracle — never advertised, yet year after year selling many thousands of copies from its internet site,” Buffett notes on the book’s site. Two expanded editions followed, and the book was so popular that a Chinese translation was released in 2010.
The book has been Ryan Petersen’s favorite for several years. Like Allred, Petersen was a fan of Buffett’s, but after attending a Berkshire Hathaway shareholder conference, “I thought Munger was funnier and more interesting than Buffett, so I started to get very interested in Charlie,” he said. He liked Munger’s view that one should familiarize him or herself with the most important ideas in a broad range of disciplines. Petersen went on to start Flexport, a San Francisco freightforwarding startup that was valued at around $3 billion earlier this year. “We’re a freight company, but we’re also an internet company, and a technology
data company, and as we take that data, it’s allowed us to build insurance products. We now have a lending business. We have a customs compliance business for shipping cargo across borders,” Petersen said. “I do attribute quite a bit of that idea to the idea that being able to cross disciplinary boundaries makes you more powerful.”
Munger is a vocal advocate for reading as much as possible, something Petersen took to heart. After reading Munger’s book, he tackled the Great Courses, and he’s now completed over a hundred of them, he said. It may not seem like an obvious choice — “Eww, why would you study physics to be a better investor?” he joked — but he said he now finds himself drawing connections among various disciplines to help him better understand his business. (For those who aren’t ready to shell out the $50 to $60 that “Poor Charlie’s Almanack” typically costs, Peterson recommends starting with Munger’s speeches, easily available online.)
Petersen and Allred aren’t alone in their love of the “Almanack”: The founders of Bay Area startups Stripe, Dropbox and AngelList have also publicly praised it. The book’s success baffles its 95yearold author, who described it as “weird, absolutely weird,” in a phone interview from his home in Los Angeles. When Kaufman suggested a book, Munger wanted to call it “Remedial Worldly Wisdom,” since he criticized the approach to education taught by the universities he was speaking at. (“I’m a little bit of a wise ass,” he said.) They went with “Poor Charlie’s Almanack” at Buffett’s suggestion, as a reference to Benjamin Franklin, and as to not inspire resentment from the schools. “Now I’m so nearly dead that I don’t give a damn about the resentment. I wish the title had been different,” Munger said.
He doesn’t think it’s a tech phenomenon. Instead, he’s noticed that the book is especially popular with “my fellow nerds in India and China,” pointing out that the Chinese edition has outsold the American edition by hundreds of thousands of copies, maybe even millions if you count the illegal ones. “‘Poor Charlie’s Almanack’ was aimed at trying to limit avoidable ignorance of worldly wisdom. And I think for some reason it’s just hugely appreciated by people in India and China and less appreciated here,” he said.
If you read the book, sure, you’ll be more likely to get rich, Munger said. But it’s not a getrichquick manual. Indeed, the book isn’t for everyone, he warned. It’s for the people who are almost there already, who just need a nudge in the right direction. “These people who love that book are in the few people who can be taught,” he said. “Most people have no hope of being improved by ‘Poor Charlie’s Almanack,’ or anything else.”
“It’s just so practical and so folksy that it’s so relatable, but at the same time, it’s so wise.” Austen Allred, cofounderCEO of the Lambda School in S.F.