July 18, 2024

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4 Investment Lessons to Learn From Charlie Munger

2 min read

Key Takeaways

  • Charlie Munger was known as much for his words of advice to younger investors as he was for his business acumen.
  • Munger was known for his extreme buy-and-hold approach, selecting only companies he felt were a sure bet and then holding on to them for years.
  • He felt it was preferable to find “wonderful businesses at fair prices,” which led him to have an extremely non-diversified portfolio of just a handful of companies at any given time.
  • One of Munger’s approaches involved weeding out opportunities that were bad or only decent. He believed that great investment opportunities would only come a few times in an investor’s career.

Billionaire Charles (Charlie) Munger died in Nov. 2023 at 99 after many decades alongside Warren Buffett at the helm of the massive holding corporation Berkshire Hathaway (BRK.A, BRK.B).

Together, Munger and Buffett grew Berkshire from a small textiles firm into a massive and diversified conglomerate with a market capitalization of about $780 billion at the time of Munger’s passing.

Munger was known both for his impressive business acumen and for his generosity in sharing investing advice with a large group of devoted followers and fans. Below, here are four investing lessons from his life that are applicable to investors of all kinds.

“The Big Money Is Not In the Buying and Selling, But In the Waiting.”

Munger and Buffett shared a belief that investment opportunities with true potential are both few and far between as well as worth waiting for.

“The whole secret of investment is to find places where it is safe and wise not to diversify,” Munger had said.

In terms of portfolio management, this means that Munger was not active in daily buys and sells. Rather, he worked hard to identify positions he felt were as close as possible to a sure thing and held them, often for years at a time.

Buffett, famous for maintaining some of the positions in his portfolio for decades, shares this philosophy. At the…

2023-12-02 16:45:22

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