As the great friend & business partner of Warren Buffett, Buffett openly admits to learning a lot from Charlie Munger, so I’m sure you will too by reading this post.
Majority of these quotes have been taken from interviews with Charlie Munger throughout the years, mainly at the Berkshire Hathaway Annual Meeting. Munger also did a legendary talk called the Psychology of Human Misjudgement which he discussed many of the psychological biases we have. Enjoy!
1. “It’s better to Buy a Wonderful Company at a FAIR Price than a Fair Company at a Wonderful Price.”
Warren Buffett uses this quote a lot but he openly admits Charlie Munger influenced his thinking on this when investing into companies such as Apple.
Use the arrows (left/right) to scroll through the image gallery above.
Alternatively, scroll down to read incredible insights behind each quote.
2. “Be a Continuous Learning Machine”
Charlie Munger is a strong advocate of being a “CONTINUOUS LEARNING MACHINE” , for him this is a common trait of all successful people. He is a voracious reader along with Warren Buffett, Bill gates & many other hugely successful billionaires. As the old saying goes “We are old too soon & wise too late”
3. “Secret to Happiness? Lower Your Expectations”
Charlie Munger is a thought leader on not just investing but life. He noticed the psychological tendency of our expectations to vastly control our happiness. We have all been there, a train late frustrated because you “expected it to be on time” .
Another example is imagine a blind date setup with someone who you believe to be incredible but then it turns out they look or act very different from there pictures & your pre conceptions!
Now maybe the person on the date may not be bad, but because you have been told your meeting someone incredible, you have built your hopes up!
My Solution is to “Prepare for the worst, but hope for the best” and live a life “Free from Expectations”
CHARLIE MUNGER JOKE: “Secret to Happiness in Life is to lower your expectations, This is how I met my Wife, [CROWD GASPS]…She lowered hers! (Punch Line) haha.
4. “It’s like Somebody is trading TURDS & you feel left out” – Munger on Bitcoin
Charlie Munger has long criticized Bitcoin for the bubble like speculation & extreme volatility.
Although his words on Bitcoin & Crypto currencies have gotten slightly less harsh over time.
At the Berkshire Hathaway Annual Meeting 2021, following Warren Buffett’s comments on Bitcoin.
“I like cryptocurrencies a lot less than you do,”
“To me, it’s just dementia.
It’s like somebody else is TRADING TURDS and you decide you can’t be left out.”
At the annual shareholders meeting for Daily Journal in February 2021.
“I don’t think bitcoin is going to end up the medium of exchange for the world. It’s too volatile to serve well as a medium of exchange.
And it’s really kind of an artificial substitute for gold. And since I never buy any gold, I never buy any bitcoin.”
5. “All intelligent investing is value investing who
wants to pay more for a stock than it’s worth”
This was Charlie Munger response when questioned the difference between VALUE INVESTING & GROWTH INVESTING. He came back with the fiery wisdom as usual & stated obvious to a reporter.
Does anyone really wish to pay more for a stock/company than it’s worth? He goes onto say You must VALUE the business in order to value the stock.
Want to learn how to Value Stocks?
Using the Munger & Buffett method but with a modern day twist, join our Investing Strategy Course & Download our Valuation Models to play around with!
More Details here: https://www.motivation2invest.com/stock-research/
6. “The More you SHOUT it Out, the More you POUND it in“
Charlie Munger talks about how the more we publicly talk with a strong opinion on a subject the harder it is to change our mind, when the facts change. This also reinforces our own confirmation Bias.
We look for facts & opinions which reinforce what we already believe. Munger presented a legendary talk called the Psychology of Human Misjudgement where he discussed many of these biases.
7. “Take a Simple Idea & Take it Seriously“
Charlie Munger is a Big fan of simplicity & first principle thinking. This can be applied to many parts of life but notably is Munger and Buffett’s Value investing style which was derived from Benjamin Graham (Father of Value Investing) , who wrote the book the Intelligent investor.
Value investing is simple:
1. Identify Great companies in your Circle of Competence (What you understand)
2. Value company & Buy below fair value
3. Hold Long term.
Seems simple but most hedge funds on Wall Street fail miserably at keeping these principles & being disciplined in the process.
8. “I’m all for Artificial Intelligence, as there is such as shortage of the real thing“
At the Daily Journal annual Meeting 2020, Charlie Munger was asked about Artificial Intelligence & he responded with is usual wittiness & humour! “”I’m all for artificial Intelligence, as there is such as shortage of the real thing” [CROWD LAUGHS HAHAH.
Buffett & Munger have never been a fan of investing into technology as it was out side there “Circle of Competence”, but I don’t believe they are against technology in general. Buffett even invested into Chinese Electric Car Maker (BYD) many years ago on the advice of Munger.
9. “Tell me where i’m going to die, so I don’t go there“
Charlie Mungers usual Humour & Wit at a Berkshire Hathaway Annual Meeting.
10. “Someone will always be getting richer faster than you, this is not a Tragedy“
Charlie Mungers talks about the dangers of FOMO (Fear of Missing out) and how rampant speculation in the Stock Market can cause us to join the heard & eventually get slaughtered. Munger makes many references to the Dot Com Bubble of the late 90’s
11. “Everyone is trying to be smart, i’m just trying NOT to be stupid“
Charlie Mungers loves the concept of “Inversion” when trying to solve a problem. Rather than trying to be the smartest, Munger focuses on trying to “Not be Stupid”
Warren Buffett also talks about their investing style of looking for “One foot hurdles to jump over” rather than “6 foot high”
Legendary Investor Howard Marks, also has a similar philosophy of focusing on minimising risk when investing & let the upside take care of itself.
He uses a great Analogy, how does an amateur Tennis Player win matches? By not hitting losers. Rather than trying to hit “winning shots” powerful, hard shots with high likelihood of missing.
12. “Got to bed Smarter than when you woke up“
Mungers like to be a “Continuous learning machine” staying humble enough to continue learning is actually rather difficult, as we tend to get over confident & use more mental shortcuts as we get older.
13. “Alot of People with HIGH IQ’s are terrible investors, because they have terrible temperaments“
Munger & Buffett often say that “You don’t need a high IQ to be a great investor” , “if you have too many IQ points, you should probably give a few away” [CROWD LAUGHS HAHA]
This is for a few reasons HIGH IQ can result in overconfidence in decisions, arrogance & not wanted to continue to learn. Also investing success is generally based on “Rationality” as Buffett calls it & being a “independent thinker”.
14. “Those who keep learning, keep rising in life“
As mentioned in the previous quote, Munger is a “Continuous Learning Machine” & staying humble enough to learn each day is the goal.
15. “Be Very Patient, but aggressive when it’s time“
Warren Buffett actually talks about this in a Legendary Quote:
“Be Fearful when others are greedy & Greedy when others are Fearful”
Extreme patience is required with the value investing approach then loading up the truck during the rare opportunities (usually stock market crashes)
16. “Rule 1 of Fishing, Fish where the Fish are“
Charlie Munger’s states the obvious as usual, this is also similar to the old wall street quote “Fish where others are not“, to find great stocks we must look where others don’t.
17. “I’m right & your smart, sooner or later you’ll see i’m right“
This is a nice one to try next time you have an argument with a spouse, friend or work colleague.
18. “Always take the high road, it’s less crowded“
This is a witty, humorous but also extremely useful quote about taking the moral high ground during disputes rather than lowering yourself, more great advice from Munger!
There you have the Wit & Wisdom of Charlie Munger brought to you by Motivation 2 Invest & Cheaper than Guru.
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Which Stocks has Charlie Munger been buying?
Dive into his latest trades & Stock Portfolio to find out here:
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