During the 2019 Daily Journal Annual Meeting Charlie Munger made some great admissions about his inability to successfully exit stock positions saying:
“I don’t like even looking for exits. I’m looking for holds.”
He was asked the question:
Question: How do you think about downside protection and how do you know when to exit an investment?
Here’s his response:
Charlie Munger: Well you’re not talking to a great exiter. My Berkshire I bought it in 1966. (Laughter) My Costco, I bought… I mean I’ve been a good picker. But other people know more about exiting. I’m trying never to have to exit. So you’re talking to the wrong… I think there are working styles of investments that work well with constant exits. It just hasn’t happened been my forte. So I’m no good at exits. I don’t like even looking for exits. I’m looking for holds.
Think of the pleasure I’ve got from watching Costco march ahead. Such an utter meritocracy and it does so well. Why would I trade that experience for a series of transactions that make me a little… In the first place, I’d be less rich not more after taxes. The second place is it’s a much less satisfactory life than rooting for people I like and admire. So I say find Costco’s, not good exits.
You can watch the entire meeting here:
(Source: YouTube)
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