The Power of Trust
The late Charlie Munger, Warren Buffett’s lifelong business partner, once said, “The highest form that civilization can reach is a seamless web of deserved trust.” Without trust, the world as we know it would grind to a halt. We often speak of trust in currency, but trust itself is a currency that keeps the world moving. From asking someone at a café to watch our belongings to entering into complex societal and economic agreements—both written and unwritten, spoken and unspoken—trust is what makes our lives possible.
Trust is commonly defined as confidence that a person or entity will act honestly, fairly, and dependably. But it goes much deeper than that. Trust is multifaceted. When we buy a sandwich from a street vendor in a foreign country, we trust that it will be not only delicious and satisfying but also fresh and reasonably priced.
On a much more personal level, we might entrust the care of our loved ones to a nanny, teacher, or doctor. We believe they will do the right thing even when no one is watching. More than that, we trust them to act with integrity and competence, even if we ourselves are not equipped to evaluate their actions fully.
Every year, at investor events for well-established corporations, I speak with shareholders who have held their shares for decades. Their stories often share a common thread: at some point, they decided that the company, with its culture and leadership, was worthy of their trust. They may not have understood every detail of the company’s operations—few people do. But they had an intuitive sense that their investment would be in good hands, allowing them to place a portion of their hard-earned savings into the company’s stock.
Patients of doctors, clients of investment advisors, and countless others face similar situations. They can ask all the questions they want, but ultimately, the most important question is about trust. When they get that right, life feels easy, light, and effortless.
In a world where almost everything seems to have a price tag, trust stands apart—it can’t be bought or sold. We all want to trust and be trusted, but as Charlie Munger wisely noted, the only way to earn trust is to deserve it.
Having worked with families for two decades, investing their savings and managing their inheritances, I’ve spent a great deal of time reflecting on trust—both the trust they place in me and the trust I extend on their behalf when investing in businesses. In the end, it could be simpler than we think: when we are in the presence of someone truly trustworthy, we might just know.
Disclosure:
Blue Infinitas Capital, LLC is a registered investment adviser. The information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.