Charlie Munger, the right-hand man of Warren Buffett, is often said to be the brains behind many of their company’s investment successes. A conservative and patient investor, Charlie Munger has amassed more than a billion dollars in personal wealth. Besides being an astute investor, Charlie Munger is also well known as a philanthropist, writer and public speaker.
His numerous appearances in the public eye have produced a multitude of wise words that we can all learn from. With that, here are three of his most memorable quotes.
“I constantly see people rise in life who are not the smartest, sometimes not even the most diligent, but they are learning machines. They go to bed every night a little wiser than they were when they got up and boy does that help, particularly when you have a long run ahead of you.”
Munger is a strong believer in life-long learning. He once said that he has never seen an extremely successful person who does not constantly read. Both Warren Buffett and him spend a disproportionate amount of time reading each day, be it newspapers, books or annual reports. His children once joked that Munger is like a book but with legs.
As investors, we must strive to keep on learning each day as well. Knowledge is power and the more we know, the better we will be at investing or anything for that matter. Just thirty minutes of reading each day can go a long way.
“Another thing I think should be avoided is extremely intense ideology because it cabbages up one’s mind. … When you’re young it’s easy to drift into loyalties and when you announce that you’re a loyal member and you start shouting the orthodox ideology out, what you’re doing is pounding it in, pounding it in, and you’re gradually ruining your mind.”
In his USC Law commencement speech in 2007, Munger emphasised the need for people to be adaptable. If we are so fixated on a particular idea, we may not be able to see things in another person’s perspective.
It is no different with investing; investors need to react and adapt to the constantly changing stock market and business world. Being too fixated on a single strategy can limit our options and our returns.
“It’s waiting that helps you as an investor, and a lot of people just can’t stand to wait. If you didn’t get the deferred-gratification gene, you’ve got to work very hard to overcome that.”
Investing requires the investor to have a multitude of qualities. But above all, patience is a key ingredient to an investor’s success. Long-term investing has proven to be the secret behind Munger’s and Buffett’s investing approach.
This is because in the long-term, stocks tend to rise and reflect their true intrinsic value. However, over the short term, the market may not be efficient, and there can be unpredictable stock movements. As such, learning to buy and wait patiently is vital in investing.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.