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You know, the most amazing thing happened to me tonight. I was coming here, on the way to the lecture, and I came in through the parking lot. And you won’t believe what happened. I saw a car with the license plate ARW 357. Can you imagine? Of all the millions of license plates in the state, what was the chance that I would see that particular one tonight? Amazing!

- Richard Feynman

Let me give you an interesting example. The investment world involves an enormous amount of high IQ people trying to be more skillful than normal. You can hardly imagine another activity that gets so much attention. And weird things have happened. Years ago one of our local investment counseling shops, a very big one, they were looking for a way to get an advantage over other investment counseling shops. And they reasoned as follows. We’ve got all these brilliant young people from Wharton and Harvard and so forth and they work so hard trying to understand business and market trends and everything else. And if we just ask each one of our most brilliant men for their single best idea then created a formula with this collection of best ideas, we would outperform averages by a big amount... So they tried it out, and of course it failed utterly.

The interesting thing about this situation is that this is a very intelligent group of people that’s come from all over the world. You’ve got a lot of bright people from China where people tend to average out a little smarter. And the issue is very simple. It’s a simple question. Why did that plausible idea fail? Just think about it for a minute. You’ve all been to fancy educational institutions. I’ll bet you there’s hardly one in the audience who knows why that thing failed. That’s a pretty ridiculous demonstration I’m making. How could you not know that?

Now at a place like Berkshire Hathaway or even the Daily Journal, we’ve done better than average. And now there’s a question, why has that happened? Why has that happened? And the answer is pretty simple. We tried to do less.

We never had the illusion we could just hire a bunch of bright young people and they would know more than anybody about canned soup and aerospace and utilities and so on and so on and so on. We never had that dream.

- Charlie Munger (March 3, 2019)

Nobody should believe that Robinhood's trades are free.

- Charlie Munger (February 24, 2021)

In borrowing money on securities, the federal reserve of the US government decided many decades ago that society had an interest in limiting the degree to which people could use borrowed money in buying securities. They had the example of the 1920s with what was 10 percent margin. That was regarded as contributing to the great crash.

So the government through the fed established margin requirements that said, "I don't care if you're John D. Rockefeller; you're going to have to put up 50 percent of the cost of buying your General Motor stock or whatever it may be." And they said that maybe Mr. Rockefeller doesn't need that, but society needs that. We don't want a bunch of people on thin margins gambling, essentially, in shares where the ripple effects can cause all sorts of problems for society. And that's still a law, but it means nothing anymore, because various derivative instruments have made 10 percent margins of the 1920s look like what a small town banker in Nebraska would regard as conservative compared to what goes on.

- Warren Buffett (1995)

Beware of geeks bearing formulas.

- Warren Buffett