As mentioned earlier in this article, Charlie Munger ignored diversification in the traditional sense. Munger was comfortable owningas few as three stocks. Munger’s concentrated approach to investing flows from the idea of using your capital on your best ideas. The cost of diversifying is forgoing...
Social-Proof Tendency: Munger and Buffett have often gone against the crowd in their investment decisions, reflecting their awareness of the social-proof tendency. For example, they avoided investing in technology companies during the dot-com bubble when many others were piling into these stocks. Co...
Of course…if you take the Munger’s, I care about the Munger’s. The Munger’s have three stocks. We have a block of Berkshire, we have a block of Costco, we have a block of Li Lu’s fund, and the rest is dribs and drabs. So am I comfortable? Am I securely rich? You’...
Berkshire has more than three million shareholder accounts. I am charged with writing a letter every year that will be useful to this diverse and ever-changing group of owners, many of whom wish to learn more about their investment. Charlie Munger, for decades my partner in managing Berkshire,...
At breakfast one morning — I followed all the stocks every day — but then I made my plunge. I had roughly this amount of money, so I bought three shares. I don’t remember this precisely, but I think I told my dad in the morning, “Now! Let’s move, Dad.” Pop, I called ...
Charlie Munger: Well, you’d have to have some kind of a rule that just made stocks way less liquid. We have all the real estate we want, all those shopping centers and auto agencies and so forth without having a perfect liquid market. We would have a stock market that was way less...
Charlie Munger, and after all these years, Munger still remembers that three of the stocks were General Electric, Dow Chemical and DuPont. After she bought them, she never touched those stocks again. She didn't pay her investment advisor a penny. After she bought the stocks, she put them ...
To help myself better understand Munger ’s ideas and methods that relate specifically to investing, I created a framework composed of three elements: principles, the right stuff, and variables. This three-part framework is only one type of model that can be used to understand Munger ’s idea...
Buffett has credited Munger with encouraging him to move on from the “cigar-butt strategy” espoused by his mentor Benjamin Graham, which involved buying cheap stocks akin to a discarded cigar where just a single puff of value remained. ...
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