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- Remembering Charlie Munger
One year ago this week, we saw the passing of the great Charlie Munger at 99 years old.
My own relationship with Charlie Munger is an interesting one.
I have always been familiar with his incredible success as an investor with his partner, Warren Buffett. My career and training were built on more trading-focused strategies, so I had never really spent much time learning more about him.
If anything, I felt that his more bombastic comments lacked an open-mindedness that I think is important to have as an investor.
Interestingly, that view hasn't changed, but I have dived into learning more about him in the last few years, and I am BLOWN AWAY!
While his controversial, off-the-cuff comments may have put me off, his wisdom, breadth, and insightfulness are extraordinary.
As we have learned more about the quotes of the greatest investors in history, Munger stands out as the #GOAT (Greatest-of-all-Time) regarding his pithy insights.
In honor of the passing of the most significant investment quote master of all time, we thought we would share some of our favorites today. Enjoy!
A great business at a fair price is superior to a fair business at a great price.
This is our favorite Charlie Munger quote of all time and makes a point that we have made Buffett and him. We think they are the greatest GROWTH investors of all time, and value is only a tiny part of it.
Every single one of their most successful investments went up not because it was cheap but because it grew.
If there is ONE piece of advice you could take from Munger – this is it.
If something is too hard, we move on to something else. What could be simpler than that?
This is a piece of advice that is hard for investors to embrace sometimes.
It seems “smarter” to work on something complicated. That does not mean it is more likely to make you more money!
One of our rules is that if we can't explain an idea to one of our non-investor friends or family, we move on to the next idea that is easier to understand.
Had we done this earlier in our career, we would have made a lot more money and saved many headaches!
We both (Charlie Munger and Warren Buffett) insist on a lot of time being available almost every day to just sit and think. That is very uncommon in American business. We read and think.
This is not just great advice for trading and investing but also for life.
In addition to my morning prayers, I like to take a period (10 minutes) where I visualize the tasks I want to accomplish and what my "perfect day" would be like today.
This allows me to prioritize and attack the day with a plan.
Develop into a lifelong self-learner through voracious reading; cultivate curiosity and strive to become a little wiser every day.
Most information used to be available in books, but now it is mostly online.
Some investors brag about how they avoid specific sources of information to be able to tune out the "noise." If you need to avoid being distracted by information, the problem is with your process, not the information.
We read everything we can that could have valuable information about our investments. Sometimes, knowing the wrong information that is popular is more valuable than knowing the correct information that is unknown.
Avoid crazy at all costs.
This reminds me of another statement we heard from Munger once but couldn't find the quote – "I don't know how I would react in a period of distress, and I do everything in my power to never find out.”
I don't know about you, but I wish someone had told me that when I was twenty years old; I would have taken it to heart. I also would have made much more money and saved me much stress.
All I want to know is where I'm going to die so I'll never go there.
This one pretty much sums Charlie up in one simple quote!
Rest-in-Peace Charlie Munger and THANK YOU for your wisdom.
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