INTRODUCTION In the chronicles of American financial history Charlie Munger will be seen as the proverbial enigma wrapped in a paradox—he is both a mystery and a contradiction at the same time. Warren Buffett said, “Charlie’s most important architectural feat was the design of today’s Berksh...
Munger’s concentrated approach to investing flows from the idea of using your capital on your best ideas. The cost of diversifying is forgoing putting more capital to work in your best idea. Viewed in this manner, a concentrated portfolio is logical – if you have a high conviction your fo...
Becky Quick: How does the Daily Journal plan to handle its investment portfolio after Charlie steps back? Gerry Salzman: Charlie, I think you should answer that. Charlie Munger: Well, I’ll handle it as long as we can, and when I’m gone or sufficiently impaired, we’ll get somebody el...
Second, it creates mental difficulties in capital allocation in a portfolio, especially if the new stock is going to replace an old stock. Selling decisions often experience the commitment and consistency bias acting upon them. If one runs a concentrated portfolio which involves acquiring a substanti...
芒格先生在总结伯克希尔50年成功经验时,提出了采用的是著名篮球教练约翰-伍登的制胜方法,具体就是将几乎所有上场时间分配给七名最优秀的球员,这样对手总是面对他最好的球员,而不是第二好的球员。而且,有了额外的上场时间,最好的球员的进步也比常人更大。巴菲特比伍登更胜一筹,因为技能的锻炼集中在一个人身上,而不...
Munger once said, "The idea of diversification makes sense to a point if you don't know what you're doing." Of course, no one likes to admit any ignorance. However, the more concentrated your portfolio is, the greater the risk of permanent loss of capital if you're w...