Charlie Munger
Charlie Munger
Charles Thomas Mungeris an American businessman, lawyer, investor, and philanthropist. He is vice chairman of Berkshire Hathaway, the conglomerate controlled by Warren Buffett; in this capacity, Buffett describes Charlie Munger as “my partner." Munger served as chairman of Wesco Financial Corporation from 1984 through 2011. He is also the chairman of the Daily Journal Corporation, based in Los Angeles, California, and a director of Costco Wholesale Corporation...
NationalityAmerican
ProfessionEntrepreneur
Date of Birth1 January 1924
CountryUnited States of America
You're looking for a mispriced gamble. That's what investing is. And you have to know enough to know whether the gamble is mispriced. That's value investing.
Warren spends 70 hours a week thinking about investing .
Hard work, honesty, if you keep at it, will get you almost anything.
You've got to have models in your head and you've got to array you experience - both vicarious and direct - onto this latticework of mental models.
The idea of excessive diversification is madness. Wide diversification, which necessarily includes investment in mediocre businesses, only guarantees ordinary results.
You must value the business in order to value the stock.
Our job is to find a few intelligent things to do, not to keep up with every damn thing in the world.
All intelligent investing is value investing - acquiring more that you are paying for. You must value the business in order to value the stock.
If you turn on the television, you'll find the mothers of the most obvious criminals that man could ever diagnose, and they all think their sons are innocent. That's simple psychological denial. The reality is too painful to bear, so you just distort it until it's bearable. We all do that to some extent, and it's a common psychological misjudgment that causes terrible problems.
Everyone caved, adopted loose [accounting] standards, and created exotic derivatives linked to theoretical models. As a result, all kinds of earnings, blessed by accountants, are not really being earned. When you reach for the money, it melts away. It was never there. It [accounting for derivatives] is just disgusting. It is a sewer, and if I'm right, there will be hell to pay in due course. All of you will have to prepare to deal with a blow-up of derivative books.
No CEO examining books today understands what the hell is going on.
The stupid and dishonest accountants allowed the genie of totally inappropriate accounting to descend on derivatives books. And once this has happened - people get status, etc. - it's impossible to get it back into the bottle.
We may well have a competitive advantage buying decent businesses at decent prices. But they won't be fabulous businesses and fabulous prices. There's too much competition and money out there, with many buyout specialists.
...Missing out on some opportunity never bothers us. What's wrong with someone getting a little richer than you? It's crazy to worry about this....