Charlie Munger Sounds a Bit Like Your Mom
Charlie Munger's journey from a childhood trading hamsters to becoming a multi-billionaire was marked by an uncommon blend of intellectual rigor, disciplined patience, and incisive wit. His early years, including working for Warren Buffett’s grandfather at Buffett & Son grocery.
But it was not until a dinner party in 1959 that Munger’s fateful connection with Warren Buffett himself began. This partnership, described by Buffett as free of a single disagreement, was profoundly transformative for both.
While Buffett persuaded Munger to leave his law practice for investing, Munger, in turn, honed Buffett’s strategy, steering him away from merely "undervalued cigar butts" towards identifying and acquiring "great businesses at fair prices." Their first joint venture was Blue Chip Stamps. This was a seemingly mundane loyalty program that had a substantial "float" of unredeemed stamps, akin to today’s unused gift cards. That float became a pool of capital that Munger and Buffett used to buy foundational assets like See's Candies and a significant stake in the Washington Post.
Munger’s philosophy, articulated with characteristic bluntness, often circled back to the virtues of patience.
Our 15 best deals show how few deals you need in a lifetime. The people who need a deal every month, by and large, they all crater. Patience and aggressive opportunism is what you need – an odd combination.
— Charlie Munger
A core Munger tenet was that success in investing isn't about constant activity, but about having the discipline to wait for truly compelling opportunities. The pursuit of action, he argued, often leads to self-inflicted wounds.
I know a man who owned his house free and clear, had $5 million of securities and lived on the income from those securities. But this left him a little short of what he wanted, so he said to himself, “I’ll go do a little work to get my return up,” and he sold puts, backed by his entire account. At the time, the highest price was on naked puts on Internet stocks and in due course he lost all of his money and now works in a restaurant.
— Charlie Munger
Munger, who passed away a very rich man, with a net worth of approximately $2.6 billion, lived by the principles he preached. Even today, Berkshire Hathaway maintains a substantial cash reserve of more than $330 million, or about 28% of total assets.
To immerse yourself further in the unique mind of this extraordinary oracle of finance, Poor Charlie’s Almanack: The Essential Wit and Wisdom of Charles T. Munger gathers his speeches and writings into a single compelling volume.
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