Charlie Munger Quotes

Well, there's always risk in long-term investment.

When you see a 'Shark fight' erupt, we aggressively want to understand what we are committing our money toward.

We regard using [a stock's] volatility as a measure of risk is nuts. Risk to us is 1) the risk of permanent loss of capital, or 2) the risk of inadequate return. Some great businesses have very volatile returns - for example, See's [a candy company owned by Berkshire] usually loses money in two quarters of each year - and some terrible businesses can have steady results.

I have plenty of investments that I wish I'd never made. But the model is to lose money on a lot of investments and then make 1,000X or 10,000X on an investment.

When you have risk aversion in Japan, the normal day-to-day outflows that happen in a normal market environment slow down.

Investors have to ask themselves two questions. How much can we grow our investments? And, can we afford our mistakes?

Between calculated risk and reckless decision-making lies the dividing line between profit and loss.

The last thing you want to do, unless it's a very unusual situation, is to invest money.

I have no complaints about losing money I put in high-risk investments. I did some of that when I had real money; my informed choice, my measured gamble.

I've learned that all investments have risk.

In some industries, we refer to risk taking as 'research and development.' At financial institutions, we often take risk by investing in securities.

It is a tenet of my investment style that, on the subject of common stock investment, maximizing the upside means first and foremost minimizing the downside. The deleterious effect of permanent capital loss on portfolio returns cannot be overstated.

When you take smaller gambles, no one particular deal can be big enough to have a material adverse effect on the company.

Trust me: I know a good investment when I see one.

Just because a company's future is highly uncertain doesn't mean an investment in it is risky. In fact, some of the best potential investments are highly uncertain but have little risk of permanent capital loss.

In my view, the biggest investment risk is not the volatility of prices, but whether you will suffer a permanent loss of capital. Not only is the mere drop in stock prices not risk, but it is an opportunity. Where else do you look for cheap stocks?

Market risk is like taking a plunge into a cool pool ... a lot of people are finding out right now what their risk tolerance is.

It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong

No matter how skillful the trading scheme, over the long haul, abnormal returns are sustained only through abnormal exposure to risk.

The greater the potential for reward in the value portfolio, the less risk there is.

I would rather sustain the penalties resulting from over-conservatism than face the consequences of error, perhaps with permanent capital loss, resulting from the adoption of "New Era" philosophy where trees really do grow to the sky.

If it is hard to imagine that 20% of losses on the stock market, you should never participate

Where you want to be is always in control, never wishing, always trading, and always first and foremost protecting your ass. That's why most people lose money as individual investors or traders because they're not focusing on losing money. They need to focus on the money that they have at risk and how much capital is at risk in any single investment they have. If everyone spent 90 percent of their time on that, not 90 percent of the time on pie-in-the-sky ideas on how much money they're going to make, then they will be incredibly successful investors.

It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.

Risk managers and investment bankers and actually, all kinds of investors took on more risk than they expected. So there was a failure of risk management. There was a failure to recognize how much risk there was in some of these securities that people bought.