Univeral Amplifier

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The Munger Philosophy: Taught vs. Applicable Knowledge

As another spring college semester came to a close for me, it was also time for 40,000+ people to come to Omaha to listen to the Oracle of Omaha, Warren Buffett, and his partner, Charlie Munger, discuss everything from life philosophy to investment prescriptions. Normally I’d focus on an investment tip that blew my mind, but I actually want to focus on a quote by Munger that’s more about knowledge in general. The Quote is, “If the gap between value and price is not attractive I go on to something else. I can’t reduce investing to a formula. If you want a formula, you should go back to graduate school. They will give you a lot of formulas that don’t work.”

Charlie Munger Berkshire Hathaway

“formulas that don’t work”

The last part of this quote really hits close to home for me, as a business finance student, and having spent the last 4 months learning those “formulas that don’t work”. The biggest fear for students is always that we are paying too much for education that may do very little for us in the real world. For me, Munger sums this up elegantly with his quote from this years Berkshire Hathaway Stockholder’s Meeting.

So the big questions is what can be done about this disparity between theory and application? How can my paid education resolve the “what is taught vs. what is applicable” dilemma? My best suggestion would be to listen to the Charlie Mungers and Warren Buffetts of the world to make sure schools are teaching applicable knowledge, not just what “needs to be taught”. For me, as an incoming college junior, it is hard to discern between what I’m being taught and what I will need to know. I fully understand that investing fundamentals, or general education fundamentals, are essential to creating a smarter financier/student. But it appears that knowing what is applicable, and works, is the knowledge that makes a practical financier. I think that is what Munger was hinting at with his quote. If I had my way, listening to these great minds to help revamp what is taught in colleges is the key to help reshape the future. We don’t need more business majors, we need more business majors with practical sense… in my opinion.

Teddy Murphy-BloggerThis has been another post by Teddy Murphy. I’m keeping my eye on what’s next.

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