Charles Munger: One Filter That’s Very Useful For Investors

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During the 1997 Berkshire Hathaway Shareholder Meeting, Warren Buffett and Charlie Munger were asked their thoughts on calculating intrinsic value. Here’s Munger’s response: I would argue that one filter that’s useful in investing is the simple idea of opportunity cost. If you have one opportunity that you already have available in large quantity and you like it better than 98% … Read More

Charles Munger: Civilized People Don’t Buy Gold

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Here’s some classic Munger wisdom on ‘gold’ as an investment: “I think gold is a great thing to sow into your garments if you’re a Jewish family in Vienna in 1939 but, I think civilized people don’t buy gold, they invest in productive businesses.” (Source: YouTube)

Charles Munger – I Frequently Sit In A Room And Converse With Dead People While The People Around Me Are Irritated

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Here’s a great compilation on reading habits and books by Warren Buffett and Charles Munger. Our favorite quote from the video is when Munger is asked how he was able to concentrate and balance his reading with so many children around when his family was younger. His response is: “I have the kind of mind that if I want to … Read More

Charles Munger: Investing In Shares Is Much Easier Than Investing In Real Estate, Here’s Why

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Here’s a great little video in which Charles Munger is discussing why investing in shares is better than investing in real estate. Munger says: “The trouble with real estate is that everybody else understands it, and the people who you’re dealing with and competed with, they’ve specialized in a little twelve blocks or a little industry. They know more about … Read More

Charlie Munger: I Made Four Or Five Hundred Million Dollars From Two Decisions, With Almost No Risk

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In this short interview Charles Munger explains how he made four or five hundred million dollars from just two decisions: “I talked about patience. I read Barron’s for fifty years. In fifty years I found one investment opportunity in Barron’s. I made about $80 Million, with almost no risk. I took the $80 Million and gave it to Li Lu … Read More

Charles Munger: A Parody About The Great Recession

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One of the best articles ever written about the ‘Great Recession’ is Charles Munger’s – Parody Describing The Contributions of Wantmore, Tweakmore, Totalscum, Countwrong, and Obvilious To The Tragic ‘Great Recession’ in Boneheadia and The Thoughts of Some People Relating To The Disaster. While the entire article is six pages long it’s a must read for all investors. Here’s an … Read More

Charles Munger: The Trouble With Economists & Economics

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Some years ago Shane Parrish at Farnam Street did a podcast in which he read the full text of Charlie Munger’s presentation – Academic Economics: Strengths and Weaknesses, after Considering Interdisciplinary Needs. It’s a must listen to for all investors. Here’s an excerpt from Munger’s presentation: 3) Physics Envy The third weakness that I find in economics is what I call … Read More

Charlie Munger: Moral Investing – We Could See It Was Like Putting $100 Million In A Bushel Basket And Setting It On Fire As We Walked Away

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Here’s a great video with Charles Munger and Warren Buffett at the 2005 Berkshire Hathaway shareholder meeting in which they discuss the moral distinction between buying a stock and a company. Here’s an excerpt from the video: CHARLIE MUNGER: Yeah. I think he’s asking in part, are there some businesses we won’t have as subsidiaries in Berkshire even though they’re … Read More

Charlie Munger: That Decision Has Cost Me Now About $5 Billion

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Here’s a great recent interview with Charlie Munger & Li Lui in which Munger recalls one of his greatest investment mistakes that cost him $5 Billion. Here’s his recollection: Munger: Let’s take a simple question. As I said in that book. They offered me three hundred shares in Belridge Oil, which I bought because I had the money on hand. They … Read More

Charlie Munger On Telsa and Elon Musk

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We’ve just been watching a great recent interview with Charlie Munger in which he was asked his thoughts on Telsa and Elon Musk. Here’s his response: Munger: Well it’s already created more significance than anybody would have predicted and its founder is bold and brilliant and swings for the fences. Of course people like that get some remarkable results and … Read More

Charlie Munger: Look For Businesses Using The Cancer Surgery Formula

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In a 1995 edition of The Outstanding Investor Digest, Charlie Munger recounted the types of business models that he and Warren Buffett like to invest in. Most noteworthy is what he calls the ‘cancer surgery formula’ model saying: “I’ve had many friends in the sick-business-fix-up-game over a long lifetime. And they practically all use the following formula — I call … Read More

Charles Munger: “If You Won’t Attack A Problem While It’s Solvable And Wait Until It’s Unfixable, You Can Argue That You’re So Damn Foolish That You Deserve The Problem”

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While not specifically an investing book, The Art of the Good Life: Clear Thinking for Business and a Better Life, by Rolf Dobelli provides some great lessons for investors. There’s one passage in particular titled – Reality Doesn’t Care About Your Feelings; or, Why Every False Step Improves Your Life – which basically says – we all make investing mistakes, what’s important however is … Read More

Charles Munger: The Secret Ingredients That Make Berkshire, And The Daily Journal, So Successful

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We’ve just been watching the 2017 Daily Journal Annual Meeting in which Charlie Munger, at 12:18 on the video below, discloses some of the secret ingredients that have made Berkshire and The Daily Journal successful. Here’s an excerpt from the meeting where Munger is speaking about DJCO’s software business: When I was a lawyer, there was a saying that I’ve … Read More

Charlie Munger: The First Rule Of Value Investing

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Here’s a great interview with Charlie Munger and Yahoo Finance Editor-In-Chief Andy Serwer. During the interview Munger discusses the first rule of value investing: Value investing has changed over the years, but the fundamental way its disciples think about it hasn’t, according to Berkshire Hathaway (BRK.A, BRK.B) vice chair Charlie Munger. “It’s gotten hard in the United States to find easy … Read More

Charlie Munger: The Stock Picking Industry Is Four Or Five Percent Super-Rational, Disciplined People, And The Rest Of Them Are Sort Of Like Faith-Healers Or Shamans

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One of the best resources for investors are the Daily Journal Annual Meetings chaired by Charles Munger. During the 2015 Annual Meeting Munger was asked the following question regarding indexing and what it might lead to: “Indexing has grown a lot in the last thirty years or so as a form of investment management for a lot of good reasons. You … Read More

Charlie Munger: The Parable Of Basicland

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Several years ago, Charles Munger wrote a great piece called – Basically, It’s Over – A parable about how one nation came to financial ruin. Munger provides a cautionary warning through the story of a fictional place called ‘Basicland’. A large, unpopulated island in the Pacific Ocean that is rich in all nature’s bounty except coal, oil and natural gas. It’s … Read More

Charlie Munger Can Be Merciless If He Believes He Has Caught Someone In An Act Of Silly Self-Deception

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One of the most commonly used terms in the world of investing is – Cost of Capital. According to the Harvard Business Review website: – “The cost of capital is simply the return expected by those who provide capital for the business”. Warren Buffett provides his own explanation for the cost of capital in his Berkshire Hathaway owners manual as: “We … Read More

14 Of Charlie Munger’s Funniest Quotes

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Charlie Munger is known for his quick wit and sense of humor, and one of the best sources of Munger’s humorous quotes is Poor Charlie’s Almanack. Here are fourteen of Munger’s funniest quotes from the book: 1. I’d rather throw a viper down my shirt front than hire a compensation consultant. 2. When asked at a cocktail party whether he … Read More

Charlie Munger: The Importance of Planck Knowledge or Knowledgeable Investing

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Warren Buffett has often been quoted on the importance of knowledgeable investing and equally important – knowing what you don’t know. Two of his most famous quotes on the subject are: “What counts for most people in investing is not how much they know, but rather how realistically they define what they don’t know.” And: “There is nothing wrong with … Read More