In investment circles arguably two of the most prominent names are Warren Buffet and his Vice Chairman Charlie Munger, of Berkshire Hathway in the USA.
Warren Buffet is well known as the front man, however Charlie Munger preferred to be more behind the scenes. Last week Charlie passed away at age 99 (just a few weeks short of his 100th birthday).
As you are all investors (that’s right, most of you have your super is invested in the share market), I wanted to share some of Charlie’s wonderful tips and famous quotes. Whilst most relate to investing, some are just life advice but as a successful billionaire who lived a long time, there is certainly wisdom in his words.
Munger’s Blueprint for investing:
“Forget what you know about buying fair businesses at wonderful prices; instead, buy wonderful businesses at fair prices.”
The goal is not to find undervalued stocks that will eventually be recognised by the market as winners, but to identify the long-term winners and stick with them. This was a game changer at Berkshire Hathaway as previously Buffet was known for his cigar-butt style of investing – buying struggling companies that should be worth more.
On being curious:
“If you’re going to live a long time, you have to keep learning. What you formerly knew is not enough. If you don’t adapt, you’re like a one-legged man in an ass-kicking contest.”
Charlie was an avid reader and this quote also sums that up:
“In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time – none, zero ... You’d be amazed at how much Warren reads – at how much I read. My children laugh at me. They think I’m a book with a couple of legs sticking out.”
“What you have to learn is to fold early when the odds are against you, or if you have a big edge, back it heavily because you don’t get a big edge often. Opportunity comes, but it doesn’t come often, so seize it when it does come.”
And….my personal favourite:
“The big money is not in the buying or selling, but in the waiting.”
Given the recent volatility, it is timely to remember that investing is often a waiting game.
He was just shy of turning 100 and on the topic of aging he would say:
“The best armour of old age is a well-spent life preceding it.”
So…… my readers, are you living your best life? Have you planned what’s important to you so that you can look forward to feeling comfortable with getting older, knowing you are living well? Vale Charlie Munger.