317- The Best Munger Quotes!

InvestED: The Rule #1 Investing Podcast

Phil Town & Danielle Town

Investing, Business

4.6 • 1.6K Ratings

🗓️ 18 May 2021

⏱️ 32 minutes

🔗️ Recording | iTunes | RSS

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Summary

“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.” — Charlie Munger Munger is the Vice Chairman of the world’s greatest compound interest machine: Berkshire Hathaway, Inc. In the time of his and Warren Buffett’s reign as the leaders of Berkshire, the company has returned roughly 2,000,000% on its initial value. We can learn a lot from Charlie Munger! Charlie Munger once said that “Coca-Cola is the perfect business because it has this gigantic durable competitive advantage, or moat, which gives it predictable cash flow.” This allows us to figure out what the future cash flow will be and value the company today, so we know whether we can buy it on sale or not. Charlie Munger also once stated that “You don’t make money when you buy and you don’t make money when you sell. You make money when you wait.” That assertion is so powerful that it is easy to overlook how critical it is. The whole idea of Rule #1 Investing is buying a stock low, and selling it high. But, the key here is that you’re doing nothing most of the time. When Charlie says, “Wait” he means, “Wait for 5 years if necessary”. If you’ve been given serious money to invest, waiting five years in cash is not a plan; it is a recipe for disaster. Charlie believes there are only a small number of real opportunities to get very high returns with very low risk. Maybe 20 in a lifetime. He said that if you remove the 10 best deals Warren and he ever did, Berkshire would have average market level performance. The only way to get those kinds of returns is to wait and wait for the right opportunity to come along. In today’s podcast, Phil and Danielle explain some of their favorite Charlie Munger quotes, and cover how many of the Rule #1 Investing principles are based on his teachings. Get inspired to invest like the world's greatest investors like Charlie Munger and Warren Buffett with this free guide: https://bit.ly/3fr7VmB Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Hey everybody, this is Phil Town and this is Daniel Town.
0:08.3	Welcome to the invested podcast where we are diving deep into munger and buffet and
0:14.3	what everybody calls value investing but which they say is just investing.
0:17.9	That's right.
0:18.9	Which we totally agree with.
0:21.8	Everybody else is what the fish that the gamblers are hooking, is that right?
0:27.3	Everybody else is the fish that the gamblers are hooking, just making sure I got my gambling
0:32.6	analogy.
0:33.6	It's a really good point that every other, all good investing is value investing.
0:39.1	Essentially, you're not investing if you have risk that you're not going to get your
0:44.4	money back.
0:46.2	That's not investing.
0:47.2	That's gambling.
0:48.2	Well, there's always some risk that you're not going to get your money back.
0:52.0	But minimizing that as much as possible in terms of confidence in your own mind.
1:00.6	Well, yes.
1:01.6	And the confidence in your own mind, I think, comes from an objective criteria rather
1:05.8	than a subjective criteria.
1:08.0	Yeah.
1:09.0	That is, you have to be quite confident that you have estimated its future value to some
1:16.0	degree.
1:17.0	Even if it's just, it'll be more than today.
	...

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