Charles Thomas Munger, was the co-founder of Berkshire Hathaway alongside Warren Buffett, and a key reason for the company’s success. Better known as Charlie Munger, the late investment guru over the years had a treasure trove of advice for investors looking to make their mark.
One key advice: “Be prepared to act when opportunities arise”.
Quote of the day by Charlie Munger
“A lot of opportunities in life tend to last a short while, due to some temporary inefficiency… For each of us, really good investment opportunities aren’t going to come along too often and won’t last too long, so you’ve got to be ready to act and have a prepared mind.”
What does Charlie Munger’s quote mean?
A transcript from his talk at the Wesco Financial Annual Meeting in May 2003, Munger’s quote stresses two important features to making good investment decisions — patience and preparedness.
Over the years, he has noted that it is harder to have cash on hand and “do nothing”, since major opportunities are few and far between. He encouraged investors to keep a curious mind and prepare for the time when an opportunity presents itself.
He added, describing his and friend and business partner Warren Buffett’s investment philosophy: “If you took our top 15 decisions out, we’d have a pretty average record. It wasn’t hyperactivity, but a hell of a lot of patience. You stuck to your principles and when opportunities came along, you pounced on them with vigor.”
Charlie Munger’s golden words on avoiding major mistakes
According to 95-year-old Warren Buffett, a key advice on avoiding major mistakes he follows was borrowed from Charlie Munger, who believed: “Write your obituary the way you want it written and then live your life accordingly.”
Munger himself shared the advice with CNBC just a few days before his death in November 2023, adding that it is “not a bad idea” to start at the end.
He added, “I’ve written my obituary the way I’ve lived my life, and if you want to pay attention to it, it’s alright with me. And if they want to ignore it, that’s OK with me too. I’ll be dead. I am very good at recognizing unfair advantages, and I got unfair advantages in old age the same way I got unfair advantages in non-old age. And when they came, I just grabbed them: boom, boom, boom.”
Who is Charlie Munger?
Charlie Munger was one of the architects behind Berkshire Hathaway’s success.
Known for his sharp wit, brutal honesty, and no-nonsense thinking, Munger was Warren Buffett’s best friend. He was Buffett’s alter ego, sidekick, and foil for almost 60 years as they transformed Berkshire Hathaway Inc. from a failing textile maker into an empire, worth billions.
A lawyer by training, Munger helped Buffett, who was seven years his junior, craft a philosophy of investing in companies for the long term. Buffett has credited him with shaping Berkshire Hathaway’s investing style and pushing the ‘Oracle of Omaha’ away from cheap “cigar-butt” stocks toward high-quality businesses at fair prices.
Under their management, Berkshire averaged an annual gain of 20% from 1965 through 2022 — roughly twice the pace of the S&P 500 Index. Decades of compounded returns made the pair billionaires and folk heroes to adoring investors.
Munger was vice chairman of Berkshire from 1978 until the day he died at 99 in 2023. He was also among the company’s biggest shareholders, with stock valued at about $2.2 billion. His overall net worth was about $2.6 billion, according to Forbes.
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