Baltasar Gracián & Charlie Munger
Kindred Spirits Separated by Three Centuries
I suspect most do not know of Baltasar Gracián. Charlie Munger, long-time friend of Warren Buffett, vice chairman of Berkshire Hathaway, and the the so-called book with legs, might have come across Gracián. However, I’ve not been able to find any reference to Gracián by Munger over the years. But still, I think it is likely Munger knew of him. If so, it wouldn’t be a surprise.
In Aubrey Bell’s 1921 book on Gracián, Bell describes a person that seems remarkably Munger-like:
“[Gracián] wrote for the few, but would not have been sorry that the many should applaud what he had written. His place, however, was in the study; for him there was no pleasure like that of ‘reading in a select library’, hungrily devouring the wise and ingenious books of all nations, or that of ‘a learned and discreet conversation with three or four intelligent friends, and not more, for with more all is noise and confusion.’”
Both seem to be kindred spirits to each other. They yearned to teach and improve their fellow man through parable, maxim, and accumulated wisdom. It also seems Gracián possessed the same disdain for authority Munger had. Or, if not disdain, at a minimum, a belief that no person is owed automatic deference based purely on title or position. They told the truth regardless of any real or perceived personal cost.
The Life of Baltasar Gracián
Baltasar Jeronimo Gracián y Morales was born on January 8, 1601, at Belmonte, a village in the neighborhood of Calatayud, Spain. At the age of eighteen he joined the Jesuits and taught at a variety of their colleges. He was apparently quite good. In 1642 he was promoted to become Rector of the Jesuit College at Tarragona.
Gracián towards the end of his life would write several parts to his book El Criticón, which is now considered one of the most influential works in Spanish literature. After he published the second part of El Criticón in 1655, Gracián’s superiors warned him to not publish any more writings. However, Gracián proceeded anyways with the third and final part in 1657. For this act, Gracián’s superiors publicly reprimanded him, stripped him of his duties, and ordered him to remain under house arrest. To top it off, Gracián was denied the use of pen, ink, or paper. He died a short while after his punishments in 1658.
The Art of Worldly Wisdom
Gracián also wrote several other books prior to El Criticón. The Art of Worldly Wisdom (Oráculo Manual y Arte de Prudencia), published in 1647, is the focus of this post. The book consists of 300 maxims along with a paragraph or two of commentary for each. The purpose of the book is to advise and guide the reader on how to live a good life, be a better person, and to advance in the world.
And there are so many excellent maxims. Most are ones we have heard already in one form or another. But the exciting thing for me was to read so many different iterations of timeless bits of wisdom from the perspective of a 17th century Jesuit educator and philosopher. I’ll focus on just one of Gracián’s 300 maxims, perhaps the one that is the most challenging for all humans.
One of the Hardest Things to Do
Wait.
It’s a sign of a noble heart dowered with patience, never to be in a hurry, never to be in a passion. First be master over yourself if you would be master over others. You must pass through the circumference of time before arriving at the centre of opportunity. A wise reserve seasons the aims and matures the means. Time’s crutch effects more than the iron club of Hercules. God Himself chasteneth not with a rod but with time. He spake a great word who said, “Time and I against any two.” Fortune herself rewards waiting with the first prize.
—Baltasar Gracián
In the world of investing, Warren Buffett and Charlie Munger are the embodiment of patience. Of thinking and being prepared before acting. They both knew they would be successful, it was just a matter of time. Both never took undue risk—for example, taking on careless amounts of leverage or debt—to get to their destination more quickly.
Buffett has often used a baseball metaphor to impart the importance of waiting. In the game of investing, you can have an endless number of pitches thrown at you and there is no umpire to call a strike for the pitches you don’t swing at. Thus, it is in the best interest of an investor to wait for the “fat pitch”. It’s even better if you can time your hit when the outfielders are taking a nap!
Additionally, Munger has talked about the difficulty of waiting, especially when you have a lot of cash doing nothing:
“It takes character to sit with all that cash and do nothing. I didn’t get to where I am by going after mediocre opportunities.”
Speaking more fully on what it takes to make a good investment (emphasis mine):
So it takes a mispriced opportunity that we’re smart enough to recognize. And that combination doesn’t occur often. But it doesn’t have to. If you wait for the big opportunity and have the courage and vigor to grasp it firmly when it arrives, how many do you need? For example, take the top 10 business investments Berkshire Hathaway’s ever made. We would be very rich if we’d never done anything else—in two lifetimes.
—Charlie Munger, April 19, 1996, Stanford Law School
More Waiting
In addition to the waiting that occurs before the inevitable fat pitch, there is the waiting that happens after you hit the pitch. Once you’ve committed capital to an investment, the compounding of value and earnings will only happen with yet more waiting.
“A great company keeps working when you’re not. A great company will eventually earn more and more and more while you’re just sitting and doing nothing. And a mediocre company won’t do that. So you’re harnessing a long range force that will help you. It’s very important.” —Charlie Munger
In Summary
Like everything in life, anything that’s worth doing is necessarily going to be hard. Likewise, anything that is easy is not worth doing. Waiting is one of the hardest games out there, and it is perhaps a greater challenge than ever given the near endless distractions available to us. But here’s the thing…
The game of “waiting” now probably offers some of the greatest rewards because it is so much harder now. Furthermore, it’s a mistake to believe that waiting is a passive activity. Boredom and lethargy should not be byproducts of the waiting game.
While we “wait” for whatever opportunity is most important to us, we should be preparing to take advantage of it whenever the time comes. We should strive to learn something new everyday; continue to hone and expand our circles of competence; and make ourselves useful to society and to family, to new acquaintances and old friends. Sometimes just soldier on in the face of adversity.
As Munger put it most simply, “You make your money by the waiting.”
One can take the word “money” literally, but I believe it is also a metaphor that applies to most things in life. The “waiting”—and all it entails—is hard and worth it in the end.
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Sources and Further Reading
Gracián, Baltasar. The Art of Worldly Wisdom. Translated by Joseph Jacobs, published by Macmillan in New York, 1904.
Bell, Aubrey F. G. Baltasar Gracián. Oxford University Press, 1921.
Brown, Andrew. “Baltasar Gracián: Critic of an Oppressive Age”, The Epoch Times, October 3, 2022.
“Charlie Munger: Wit and Wisdom From The World’s Most Irreverent Billionaire”, Farnam Street blog.
“Sit On Your Ass”, Investment Master Class, January 23, 2020.
Saab, Geoff. “Thank you, Charlie”, Low Risk Rules, December 4, 2023.
Disclaimers
The content of this publication is for entertainment and educational purposes only and should not be considered a recommendation to buy or sell any particular security. The opinions expressed herein are those of Douglas Ott in his personal capacity and are subject to change without notice. Consider the investment objectives, risks, and expenses before investing.
Investment strategies managed by Andvari Associates LLC, Doug’s employer, may have a position in the securities or assets discussed in any of its writings. Doug himself may have a position in the securities or assets discussed in any of his writings. Securities mentioned may not be representative of Andvari’s or Doug’s current or future investments. Andvari or Doug may re-evaluate their holdings in any mentioned securities and may buy, sell or cover certain positions without notice.
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