Knowledge | Posted by Shwe Zin Win
Billionaire Charles (Charlie) Munger died in Nov. 2023 at 99 after many decades alongside Warren Buffett at the helm of the massive holding corporation Berkshire Hathaway (BRK.A, BRK.B).
Together, Munger and Buffett grew Berkshire from a small textiles firm into a massive and diversified conglomerate with a market capitalization of about $780 billion at the time of Munger's passing.
1. "The Big Money Is Not In the Buying and Selling, But In the Waiting."
"The whole secret of investment is to find places where it is safe and wise not to diversify," Munger had said.
In terms of portfolio management, this means that Munger was not active in daily buys and sells. Rather, he worked hard to identify positions he felt were as close as possible to a sure thing and held them, often for years at a time.
2."Buy Wonderful Businesses at Fair Prices."
A core component of Munger's approach to investing was a belief in the strength of the value investing philosophy.
He is known to have said "Forget what you know about buying fair businesses at wonderful prices. Instead, buy wonderful businesses at fair prices."
3.Great Opportunities Are Rare.
Munger made investment choices under the belief that "life is not just bathing you with unlimited opportunities." Following that perspective, he aimed to weed out as many average or bad investing ideas as possible. Only those ideas surviving strict scrutiny would be considered for implementation.
4."Good Businesses Are Ethical Businesses."
One of Munger's favorite axioms was that "good businesses are ethical businesses," and, conversely, that "a business model that relies on trickery is doomed to fail."
Munger and Buffett developed a reputation for closely analyzing the operations of businesses they were considering making investments in, looking for businesses with both excellent growth potential as well as those that they felt had models that were fair, even-handed, and ethical.
Ref: 4 Investment Lessons to Learn From Charlie Munger (investopedia)
