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  • Writer's pictureMandino Tan

Charlie Munger on Investing

Charlie Munger just turned 99 years old on 1st January. He is a business partner of Warren Buffett and the Vice Chairman of Berkshire Hathaway. He is known for his unconventional approach to investing and emphasis on a thorough understanding of a company's operations and management before deciding to invest. Munger has also spoken about the importance of a wide range of knowledge and avoiding behavioural biases in investing. He has been a critical figure in the success of Berkshire Hathaway and is considered one of the most successful and respected investors of all time.

With almost a century of a lifetime, Charlie Munger has shared several tips on investing over the decades. Here are some of his key principles:

  1. Look for companies with solid and ethical management teams: Munger believes that the quality of a company's management is one of the most important factors to consider when investing. He looks for companies with leaders who are honest, competent, and have a long-term perspective.

  2. Focus on simplicity: Munger advises investors to avoid complex and hard-to-understand investments. Instead, he suggests looking for companies with simple and easily understandable business models.

  3. Have a wide range of knowledge: Munger emphasizes the importance of having a broad understanding of different fields to make better investment decisions. He believes that investors should read widely and learn as much as they can about various industries, markets, and economic trends.

  4. Avoid behavioural biases: Munger has discussed the importance of avoiding common behavioural biases such as herd mentality, overconfidence, and emotional decision-making when investing. He advises investors to be objective and logical when analyzing investments.

  5. Be patient: Munger believes that investing is a long-term game and that patience is key to success. He advises investors to avoid making impulsive decisions and to stick with their investments for the long term.

  6. Invest in what you know: Munger suggests that investors focus on industries and companies they understand. It is easier to identify suitable investment opportunities in familiar industries and fields.

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