Investing Lessons from Charlie Munger


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There is no doubt that Charlie Munger is the world’s best and greatest investor.

His life is more akin to a roller-coaster ride in an American drama film.

Charlie has worked his way up from being a 19-year-old college dropout to becoming Harvard alumni, a successful businessman, and Warren Buffett’s business partner at Berkshire Hathaway.

His investment strategies, opportunistically seeing statistics and graphs, making judgments to invest in, and getting out of it in the appropriate way, deserve all of the credit for his success. Charlie Munger is set to turn 100, and his net worth is close to USD 2.2 billion at the age of 98.

Investing Lessons to learn from Charlie Munger

Being persistent – According to Charlie Munger’s investment technique, one should be persistent in achieving one’s goals. Whatever the problem, an individual must always approach it as an opportunity to learn and grow. Challenging times do not test ability; they test personality, whether you are a winner or a loser. And there is only one winning personality in the stock market – it is a winning personality!

Being truthful – According to Munger, no one can attain success unless they are truthful. In all situations, whether in business or in life, an individual must be honest with his or her thoughts, decisions, clients, and partners. And honesty is valuable in the stock market.

If a person invests in a trustworthy company, the returns are guaranteed to be favourable. Pay-outs will be manipulative if the corporation is not honest with its investors.

Being vivacious – One of Charlie Munger’s pet peeves is self-pity. Given his predicament, Munger could easily have turned to booze or narcotics to distract himself from his problems. He, however, did not. It wasn’t because he didn’t have money, but because he didn’t want to wallow in self-pity. “If anyone can help you through your terrible times…you,” it says Munger in one of his most famous comments. People respond to self-pity with empathy. People’s attention is drawn to self-pity. However, what it does is force an individual to perform at their worst. When it comes to equities trading, all traders and investors must look on the positive side rather than bemoan the circumstance. It was your money that you put up. When you are lucrative, you rejoice. You advance if you are not lucrative. Hanging on the precipice of a chance does not provide a satisfactory solution.

Being disciplined – According to Charlie Munger, the three pillars of investment principles are honesty, discipline, and ethics. A person who follows an honest and disciplined routine in an ethical style of business will undoubtedly empower a large amount of wealth in whatever form – money, knowledge, structure, and so on. This is why, whether a trader or an investor, an individual must discipline himself/herself in a way that will bring sufficient tranquilly despite odd and off conditions in the stock market.

Learn to unlearn – One of the main reasons Munger emphasises reading as a habit is because each book helps an individual perceive old things in a new perspective. According to Munger, there are numerous answers to a problem, and in order to see through each of them, an individual must first unlearn all he or she has learned from previous experiences. Similarly, while creating an investing strategy, an individual must create a new strategy for each new investment that he or she intends to make.

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