6 Essential Insights on The Future from Warren Buffett and Charlie Munger

“The future will not be as good as the past but it doesn’t have to be.” This statement from Charlie Munger summed up his thoughts on public markets. Public market in the U.S. will not repeat the success of the late 90s in the 21st century.

Successful investors seem to focus on smaller, private markets, where it's more difficult to invest and where there's less competition. It's worth noting that advances in communication technology and the huge amount of capital created in the second half of the 20th century have created a more competitive public market.

Researcher Robin Dunbar says, on average, we can only maintain a trusted social group of one hundred and fifty people. We can change which people, brands, and ideas we trust, but the number stays the same.

We are exposed to an increasing number of brands each year, but with no more trust and attention to hand out. The result is a shift in how companies grow and how marketing works. Warren Buffett shows a change from "push" marketing to "pull" marketing. We are entering a trust shortage. The individuals and brands which are "long trust" will win.

Charlie Munger once commented that "in order to disagree with somebody you must first understand their argument better than they do."

The most common way people lose money is to overestimate how clever they are and how much they know. Even after a fifty-year investing career, both Warren Buffett and Munger read over 500 pages a day and still limited themselves to a small circle of competence where they can explain the other side's argument better than they can.

Not many people have knowledge in their head both through a long life and reading widely, and across private industries, government, etc., to be able to form a broad perspective.

Taking your money and starting from the perspective of how to make a better tire will yield a very different result to asking "how do I maximize returns on capital?"