The Success Algorithm — Munger Monday #66

👋 CMQ Investors,

This is the 66th edition of Munger Monday. This is a weekly series created exclusively for CMQ Investing subscribers. If you missed last week’s edition, you can read it here.

“The fundamental algorithm of life: repeat what works.” —Charlie Munger

📘 Why It Matters: Charlie Munger believed that rationality came down to figuring out what works, what doesn’t work, and why. The discipline to keep doing what works creates success in all areas of life.

🌎 Real-World Example: Charlie Munger once remarked that Walmart founder Sam Walton “invented practically nothing, but he copied everything anybody else ever did that was smart…”

• Walton obsessively studied the retailing tactics of his competitors, and borrowed the best of what worked.

• In his autobiography, Walton wrote, “most everything I’ve done I’ve copied from someone else.”

• By Walton’s death in 1992, three decades of repeating that formula had grown Walmart to 1,714 stores and $43.8 billion in sales.

🧠 Mental Model (Natural Selection from Biology): Traits that improve reproductive success become more common because successful variants reproduce themselves.

📺 Watch These Videos: Sam Walton, the founder of Walmart, is the focus of this tribute video. It gives you a bit more sense of Sam Walton, the person.

📅 Apply It This Week: Look at your last 5 investing decisions. Which one worked for a clear, repeatable reason, and have you actually repeated it since?

📝 Franco’s Notes:

• “People who say they are rational [should] know how things work, what works and what doesn’t, and why. That’s rationality.” —Charlie Munger

• My caption from when I posted this quote on Instagram is important: One important caveat is that what works now is unlikely to work as well (or at all) forever. This is why you have to continue to try new things, learn new things, and find new winners.

🔗 Related Reading: If this edition resonated, these build on it:

• Charlie Munger uses these mental tricks

• Smart People Fail Without This — Munger Monday #62

• Destroy Your Best-Loved Ideas — Munger Monday #14

• 16 Mental Tricks Charlie Munger Used Repeatedly

• Buffett & Munger: 65 Powerful Mental Models

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