👋 CMQ Investors,
This is the 62nd edition of Munger Monday. Are you using checklists before you make important decisions?
📘 Why It Matters: Charlie Munger studied what caused the downfall of smart people. Checklists were Munger’s go-to tool for avoiding the same mistakes.
🌍 Real-World Example: In his foreword to Poor Charlie’s Almanack, Li Lu described watching Munger, his investment partner since 2004, constantly collect the causes of failure and turn them into a checklist for decisions.
The clearest example is a speech Munger gave at Harvard in 1995, cataloging 24 distinct psychological tendencies that cause people to make bad decisions.
Li Lu wrote that because of this habit, Munger “has avoided major mistakes in his decision making in his life and in his career,” a discipline he ties directly to Buffett and Berkshire Hathaway’s returns over the past 50 years.
📺 Watch This Video: Charlie Munger outlines a simple, 4-item checklist he uses before making an investment.
📅 Apply It This Week: Outside of investing, where in your life would a simple 5–9 item checklist significantly improve outcomes? Write down the answer.
📝 Franco’s Notes:
The human brain is prone to bias, overconfidence, and blind spots, especially when money is involved. Checklists force rationality by slowing us down. This is why we should always be using them before we buy or sell a stock.
The Bad Business Checklist does exactly this for me.
I built an investment decision-making system using Claude Cowork that incorporates checklists into the decision-making process. 👇
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