Charlie Munger’s Quotes = Mungerisms


wealthymatters.com

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. (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

Charlie Munger


wealthymatters.comFor all those who are like who the heck is this Charlie?And there are many who would ask the question where I come from. Charles Thomas (Charlie) Munger is an investment manager. He is Vice-Chairman of Berkshire Hathaway Corporation and Warren Buffett’s long term associate. Munger is also the chairman of Wesco Financial Corporation, based in Pasadena, California. Wesco Financial is an 80.1%-owned subsidiary of Berkshire Hathaway. It began as a savings and loan association, but now controls Precision Steel Corp., CORT Furniture Leasing, Kansas Bankers Surety Company, and other ventures. Wesco Financial has an equity portfolio of over $1.5 billion dollars that is concentrated in Coca-Cola, Wells Fargo, Procter & Gamble, Kraft Foods, US Bancorp, and Goldman Sachs.

Buffett has often publicly stated that he regards Charlie Munger as his partner.  In fact Charlie Munger owns enough Berkshire Hathaway stock to be a bona fide billionaire in his own right. There are many similarities between these two long time friends.However the lesser known Charlie Munger is not a carbon copy of Warren Buffett.There are distinct differences in the way in which the two long -time friends think .Ofcourse what is so fascinationg is how both these people’s thoughts mesh to create a better whole.Also Warren Buffett is known to devote his time almost exclusively to his business, while Charlie Munger, who does not involve himself in the day-to-day operations of Berkshire, is a generalist for whom investment is only one of a broad range of interests.

Charlie Munger is a great admirer of Benjamin Franklin.His thoughts are compiled in a 500 odd pages tomb called “Poor Charlie’s Almanack”.

Charlie Munger believes in thinking about things by inverting. So to understand how to be happy in life, Charlie will study how to make life miserable; to examine how businesses become big and strong, Charlie first studies how businesses decline and die; most people care more about how to succeed in the stock market, Charlie is most concerned about why most have failed in the stock market. Read more of this post

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