Focus on one or two variables: In the businesses he invested in and in the way he gradually built a vast body of knowledge, Munger learnt to focus on the one or two variables which drive success.
Attempting to maximise competing variables is a recipe for disaster. Picking one variable and relentlessly focusing on it, which is an effective strategy, diverges from the norm.
His ideas on how to value companies were all shaped by how the Great Crash and Depression almost destroyed him, and he was always a little afraid of what the market can do. It left him with an aftermath of fear for the rest of his life, and all his methods were designed to keep that at bay.
The Best Charles Munger Books of All-Time (Updated for )
However, Munger says one has to be selective because people who do unwise things in one setting usually proceed to do unwise things in other setting as well. It ought to be taught as a catechism. Our Consistent Compounders Portfolio has only 12 stocks in it. We have five analysts in our team and each is required to dissect only stocks. For obvious reasons, the management teams of these companies do NOT host conference calls where they spill the beans on the real moat of the company.
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As a result, if we can understand the same better than others, we should generate superior results over long periods of time. That being said, it is tough, grindingly hard work — not just because of the many hours spent reading but also because of the time and effort involved in tracking down experts who can provide deep, original insights into the workings of these companies.
The fact that a legend like Charlie Munger traversed a similar path and came out smiling spurs us on. Indian capital markets rise through ranks in global order of 7. Play Slideshow. Rising through it all 19 Jun, Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www. Not making enough money in stocks?
Charlie Munger: Looking Into Graham’s 4 Investment Principles
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- The Best Charles Munger Books of All-Time (Updated for ).
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Share this Comment: Post to Twitter. The core principles of value investing involve finding simple, undervalued core assets and holding on to them as they make money while decoupling rationality and emotion. Many principles and details fall under that, but it can simply be summed up by the ability to find dispassionate variations in the market.
For example, Munger recommends setting aside periods of the day to read and just think. A lot of value investing or decision-making is limiting your own mistakes.
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- Charlie Munger: the Complete Investor by Tren Griffin?
It comes down to not being reactive to situations, but knowing when to wait and when to put a stake in the ground and commit. It also requires a tremendous amount of work.
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The writing does veer into some repetitions, with Griffin often either repeating a quote from Munger or simply re-stating it several times. I think Griffin could have benefited from an editor, but the overall message gets across. Overall: A great read, if not a bit repetitive, on the frameworks of thinking by Charlie Munger. Where can I find it?