Charlie Munger Quotes

I personally don't invest in a lot of companies because I think it would be a conflict of interest and Facebook doesn't typically either.

The average American thinks billionaire investors are going to be right based on some talking head. They invest and they have no backup plan. Americans think these guys are giant risk-takers. The truth is they believe in taking as little risk as humanly possible, for the maximum amount of upside. They're looking for that spread of disproportionate risk-reward.

At one point, I recognized that Warren Buffett, though he had every advantage in learning from Ben Graham, did not copy Ben Graham but, rather, set out on his own path and ran money his way, by his own rules... I also immediately internalized the idea that no school could teach someone how to be a great investor.

Everything I do in investment is just very different.

In order to be a really good investor, you need to be a little bit of a philosopher as well.

Always start at the end before you begin. Professional investors always have an exit strategy before they invest. Knowing your exit strategy is an important investment fundamental.

Intelligent investment is more a matter of mental approach than it is of technique. A sound mental approach toward stock fluctuations is the touchstone of all successful investment under present-day conditions.

The Berkshire-style investors tend to be less diversified than other people. The academics have done a terrible disservice to intelligent investors by glorifying the idea of diversification. Because I just think the whole concept is literally almost insane. It emphasizes feeling good about not having your investment results depart very much from average investment results. But why would you get on the bandwagon like that if somebody didn't make you with a whip and a gun?

We believe that almost all really good investment records will involve relatively little diversification. The basic idea that it was hard to find good investments and that you wanted to be in good investments, and therefore, you'd just find a few of them that you knew a lot about and concentrate on those seemed to me such an obviously good idea. And indeed, it's proven to be an obviously good idea. Yet 98% of the investing world doesn't follow it. That's been good for us.

Investment philosophy is the clear understanding that by owning shares of stocks he owns businesses, not pieces of paper.

Shares are not mere pieces of paper. They represent part ownership of a business. So, when contemplating an investment, think like a prospective owner.

I think there's something to be said for developing the disposition to own stocks without fretting.

There's lots of stocks out there and all you need is a few of 'em. That's been my philosophy.

I've never invested in any airline. I'm an airline manager. I don't invest in airlines. And I always said to the employees of American, 'This is not an appropriate investment. It's a great place to work and it's a great company that does important work. But airlines are not an investment.'

Limits are possibilities. ... Formal restrictions, contrary to what you might think, free you up by allowing you to concentrate on purer ideas. ... You can be crippled by too many choices, especially if you don't know what your goals are.

If stocks are attractive and you don't buy, you don't just look like an idiot, you are an idiot.

Everybody has a different strategy, but everybody agrees that active management does not beat the market.

There is something in people; you might even call it a little bit of a gambling instinct… I tell people investing should be dull. It shouldn't be exciting. Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.

My method for picking stocks has never changed. When businesses go from crappy to semicrappy, there's money to be made.

An investor should act as though he had a lifetime decision card with just twenty punches on it.

The strategy we've adopted precludes our following standard diversification dogma. Many pundits would therefore say the strategy must be riskier than that employed by more conventional investors. We disagree. We believe that a policy of portfolio concentration may well decrease risk if it raises, as it should, both the intensity with which an investor thinks about a business and the comfort-level he must feel with its economic characteristics before buying into it.

Risk can be greatly reduced by concentrating on only a few holdings.

The individual investor should act consistently as an investor and not as a speculator. This means ... that he should be able to justify every purchase he makes and each price he pays by impersonal, objective reasoning that satisfies him that he is getting more than his money's worth for his purchase.

In the world of securities, courage becomes the supreme virtue after adequate knowledge and a tested judgment are at hand.

Good investing is a peculiar balance between the conviction to follow your ideas and the flexibility to recognize when you have made a mistake.