Friday, March 14, 2014

Charlie Munger on Dog Training

Charlie Munger to the left, Warren Buffet to the right.
In a 1995 speech, Charlie Munger, the life-long investment partner of Warren Buffet, talked about the “Psychology of Human Misjudgment.”

Munger's 24-point treatise begins by observing that that there is a dramatic “under-recognition of the power of what psychologists call ‘reinforcement’ and what economists call ‘incentives.’”  Munger notes:

Well you can say, ‘Everybody knows that.’ Well I think I’ve been in the top 5% of my age cohort all my life in understanding the power of incentives, and all my life I’ve underestimated it. And never a year passes but I get some surprise that pushes my limit a little farther.

Read the whole thing!  And, for the record, Munger mentions Skinner 16 times, Pavlov 12, and operant conditioning three times.

And did I mention that both Charlie Munger and Warren Buffet are population men?  True!

Warren Buffet and Charlie Munger will tell you they began to understand the potential danger of runaway population growth at almost exactly the same time as they began to understand compound interest.

Yes indeed, gentlemen, and thanks for the fishes!



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