Charlie Munger On Just About Everything – 11/05/2010
by Scott Smith
On who to blame: The academic elites failed us with their utterly asinine ideas of risk control. It was grounded on the idea that all risk took Gaussian distributions, which is just totally wrong. Very high IQ people can be completely useless. And many of them are.
Benjamin Graham used to say, “It’s not the bad investment ideas that fail; it’s the good ideas that get pushed into excess.” And that’s a lot of what happened here.
Some economic distortions come from the masses believing that other people are right. Others come from the need to make a living through behaviour that may be less than socially desirable. I’ve always been sceptical of conventional wisdom. You have to be able to keep your head on when everyone else is losing theirs.