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Recently Vice Chairman of Berkshire Hathaway, Right Hand of Warren Buffet, Charlie Munger passed away at the age of 99.Here are top investment lessons of Charlie Munger, an investor must learn to be successful in his investment journey.
Charlie Munger was a Hamster Breeder at his early stages. Charlie Munger graduated from Harvard Law School and practiced law in Los Angeles and cofounded the law firm Munger, Tolles & Olson which later turned into management of investments in stocks and real estate.
Charlie Munger also served in US Army Air Corps in World War II as second lieutenant. Charlie Munger was a polymath and had in-depth knowledge of different domains such as share market, real estate, law etc.
From 1945 to 1953 his wife was Nancy Huggins and from 1956 to 2010 Nancy Barry was his wife.
His children include Charles T Munger, Emilie Munger Ogden, Molly Munger, Wendy Munger, Barry Munger and Philip Munger.
Life of Charlie Munger was full of adversaries but he never lost hope and faced everything bravely. Very early Charlie Munger got divorced and faced huge social stigma. Charlie Munger’s son was diagnosed with cancer, he paid for all medical expenses but finally lost his son. He got in to huge debts. Charlie Munger lost his one eye during treatment. But even after all these adversaries Charlie Munger stayed cool and calm.
Charlie Munger was a good learner and always used to read books. Due to this his son used to call him as “a book with two legs”. When Charlie Munger lost his one eye and felt that he might lose his other eye too then also he made himself prepared for that situation and started learning Braille script to follow his passion of reading books even in case of losing both eyes. But fortune favours the brave and his second eye remained with him till his last breath.
Charlie Munger was the key person behind the success of Warren Buffet but Warren Buffet was richer than Charlie Munger as Warren Buffet had more stake in Berkshire Hathaway but Charlie Munger sold some of his stakes for donations and philanthropy.
Charlie Munger was a king maker and he converted Berkshire Hathaway from a textile company to a large conglomerate business. Warren Buffet was originally a value investor. Charlie Munger emphasized the worth of growth investing to Warren Buffet which played a main role behind the success of Warren Buffet.
Growth investing means buying say Rs 100 share at the higher price say Rs 110 with belief that the company will grow at even higher pace due to its good fundamentals.
Value investing means buying say Rs 100 share at the lower price say Rs 70 with belief that the share price will grow to Rs 100 due to its good fundamentals.
Charlie Munger preferred to search high quality businesses for investment. High quality business means businesses with highly competitive advantages i.e. moats and business should survive for longer run. Charlie Munger advocated to prefer the quality of businesses of the company over its valuations. In other words, it’s better to buy shares of a good quality company at a higher price than buying shares of an average company at lower prices.
Charlie Munger advocated to invest in businesses which are simple and understandable rather complex businesses for long term survival. Charlie Munger believed that one should invest in a such business which even a fool can run because there might be some instances when an inappropriate leader or manager may get the command of the business and business should survive in that situation as well.
As per Charlie Munger wealth is not made by buying and selling shares frequently rather holding good shares for long run. At the time of his death Charlie Munger had $2.6 Billion of net worth.
Charlie Munger had following holdings:
“THE BEST THING A HUMAN BEING CAN DO IS TO HELP ANOTHER HUMAN BEING KNOW MORE.”
“TAKE A SIMPLE IDEA & TAKE IT SERIOUSLY.”
“THOSE WHO KEEP LEARNING, WILL KEEP RISING IN THE LIFE.”
“WHERE YOU HAVE COMPLEXITY, BY NATURE YOU CAN HAVE FRAUD AND MISTAKES. YOU’LL HAVE MORE OF THAT THAN IN A COMPANY THAT SHOVELS SAND FROM A RIVER AND SELLS IT. THIS WILL ALWAYS BE TRUE OF FINANCIAL COMPANIES, INCLUDING ONES RUN BY GOVERNMENTS. IF YOU WANT ACCURATE NUMBERS FROM FINANCIAL COMPANIES, YOU’RE IN THE WRONG WORLD.”
“TO EXPECT TOTAL RATIONALITY EITHER IN HUMANS OR HUMAN INSTITUTIONS IS EXPECTING WHAT’S NOT GOING TO HAPPEN.”
“IT TAKES THE CHARACTER TO SIT WITH ALL CASH AND TO DO NOTHING. I DIDN’T GET TO WHERE I AM BY GOING AFTER MEDIOCRE OPPORTUNITIES.”
“I AM RIGHT AND YOU ARE SMART, SOONER OR LATER YOU WILL SEE I AM RIGHT”
“IT’S BETTER TO BUY A WONDERFUL COMPANY AT A FAIR PRICE THAN A FAIR COMPANY AT A WONDERFUL PRICE.”
· “BE A CONTINUOUS LEARNING MACHINE”
· “SECRET TO HAPPINESS? LOWER YOUR EXPECTATIONS”
· “ALL INTELLIGENT INVESTING IS VALUE INVESTING WHO WANTS TO PAY MORE FOR A STOCK THAN IT’S WORTH”
· “I’M ALL FOR ARTIFICIAL INTELLIGENCE, AS THERE IS SUCH AS SHORTAGE OF THE REAL THING”
· “TELL ME WHERE I’M GOING TO DIE, SO I DON’T GO THERE”
· “SOMEONE WILL ALWAYS BE GETTING RICHER FASTER THAN YOU, THIS IS NOT A TRAGEDY”
· “GOT TO BED SMARTER THAN WHEN YOU WOKE UP”
· “ALOT OF PEOPLE WITH HIGH IQ’S ARE TERRIBLE INVESTORS, BECAUSE THEY HAVE TERRIBLE TEMPERAMENTS”
“ALWAYS TAKE THE HIGH ROAD, IT’S LESS CROWDED”
LISTEN NOW: Billionaire investor Charlie Munger, the longtime right-hand man and close friend of Warren Buffett, died at age 99, a few weeks shy of what would have been his 100th birthday. Listen and follow the @SquawkCNBC podcast here: https://t.co/gZaa8fjNXK pic.twitter.com/iXMD7CbdCs
— CNBC (@CNBC) December 2, 2023
Charlie Munger was Vice Chairman of Berkshire Hathaway and Right Hand of Warren Buffet.Charlie Munger was a polymath and had in-depth knowledge of different domains such as share market, real estate, law etc
Charlie Munger graduated from Harvard Law School and practiced law in Los Angeles.
Warren Buffet himself stated Charlie Munger as his right hand and best friend in an interview.
Charlie Munger started his earning journey from tuition to Hamster Breeder and then from law firm to a real estate developer and finally share market investment.
Charlie Munger also served in US Army Air Corps in World War II as second lieutenant.
Charlie Munger was Vice Chairman of Berkshire Hathaway and had investment/ holding in several other companies.
Warren Buffet is richer and Charlie Munger’s wealth may be considered as fraction of Buffet’s wealth.
Charlie Munger was the key person behind the success of Warren Buffet but Warren Buffet was richer than Charlie Munger as Warren Buffet had more stake in Berkshire Hathaway but Charlie Munger sold some of his stakes for donations and philanthropy.
At the time of his death Charlie Munger had $2.6 Billion of net worth.
Charlie Munger had following holdings:
His children include Charles T Munger, Emilie Munger Ogden, Molly Munger, Wendy Munger, Barry Munger and Philip Munger.
Growth investing means buying say Rs 100 share at the higher price say Rs 110 with belief that the company will grow at even higher pace due to its good fundamentals.
Value investing means buying say Rs 100 share at the lower price say Rs 70 with belief that the share price will grow to Rs 100 due to its good fundamentals.
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