Here is my list of “Mungerisms”.Over time I have used many of them to my advantage and the rest are in my list as reminders of ways I could improve my condition or as cautions against folly.I hope you too find them just as helpful as I do.
- (1)”Most people are too fretful, they worry to much. Success means being very patient, but aggressive when it’s time.”
(2)”Using [a stock’s] volatility as a measure of risk is nuts. Risk to us is 1) the risk of permanent loss of capital, or 2) the risk of inadequate return. Some great businesses have very volatile returns – for example, See’s [a candy company owned by Berkshire] usually loses money in two quarters of each year – and some terrible businesses can have steady results.”
(3)”I think that, every time you saw the word EBITDA [earnings], you should substitute the word “bullshit” earnings.”
(4)“Warren talks about these discounted cash flows. I’ve never seen him do one.” “It’s true,” replied Buffett. “If the value of a company doesn’t just scream out at you, it’s too close.”
(5)”If you buy something because it’s undervalued, then you have to think about selling it when it approaches your calculation of its intrinsic value. That’s hard. But if you buy a few great companies, then you can sit on your ass. That’s a good thing.”
(6)”We bought a doomed textile mill [Berkshire Hathaway] and a California S&L [Wesco] just before a calamity. Both were bought at a discount to liquidation value.”
(7)”For society, the Internet is wonderful, but for capitalists, it will be a net negative. It will increase efficiency, but lots of things increase efficiency without increasing profits. It is way more likely to make American businesses less profitable than more profitable. This is perfectly obvious, but very little understood.”
(8)”Virtually every investment expert’s public assessment is that he is above average, no matter what is the evidence to the contrary.” Read more of this post
‘Poor Charlie’s Almanack – The Wit and Wisdom of Charles T. Munger’ is a compilation of essays, memoirs, interviews, and speeches regarding Warren Buffett’s closest friend and business partner, Charles T. (Charlie) Munger , edited by Peter D.Kaufman.
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