This 12 months’s annual meeting of Berkshire Hathaway shareholders kicked off with a video tribute to Berkshire vice chairman and Warren Buffett right-hand man Charlie Munger, who handed away final 12 months at age 99.
The acerbic Munger had sufficient zingers to fill a prolonged reel to the delight of the tens of hundreds of shareholders who piled into the CHI Health Center in Omaha, Nebraska on Saturday.
On speculative web shares: “If you mix raisins with turds, they’re still turds.”
On his outlook for the long run: “If I can be optimistic when I’m nearly dead, surely the rest of you can handle a little inflation.”
Cue the laughter.
Of course, Munger wasn’t simply a fast wit. He was additionally a critical thinker thought-about one of many true nice monetary minds that buyers the world over hoped to study from.
On the ground with hundreds of shareholders on the afternoon earlier than the assembly, I requested a very powerful lesson they’d realized from the late billionaire. Just a few frequent themes emerged.
In a phrase, persistence
When requested the highest lesson he learned from Munger, Luis Lozano of Cancun, Mexico gave a one-word reply: persistence.
Dean Miller of Monticello, Minnesota was keen to elaborate simply a bit. “Probably, the biggest thing is just patience. It’s that time in the market,” he advised me. “And then not taking a quick gain, and then hold out for longer for a better gain. Mostly patience for the long haul.”
Munger was well-known for ready — not solely when it got here to constructing wealth, however for locating enticing investing alternatives.
“We wait for no-brainers. We’re not trying to do the difficult things,” Munger stated on the 2002 assembly. “And we have the patience to wait.”
When it got here to investing in what he considered as nice corporations, Munger shared Buffett’s view that your finest transfer as an investor is holding for the long run.
“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever,” Buffett wrote in his 1988 letter to shareholders.
Buying nice corporations, somewhat than nice values
When citing Munger’s most necessary lessons, a number of shareholders on the ground recalled a key early disagreement between Munger and Buffett.
“I learned that it’s better to buy good businesses at fair prices than pretty bad businesses at really great prices,” stated Jerone Gillespie of Maryland. “I think that’s the same thing that Warren Buffett said was one of the most important lessons that he learned from him.”
Gillespie is spot on. For Buffett, a disciple of worth investor Benjamin Graham, clever investing meant shopping for corporations that have been buying and selling at a low cost to their intrinsic worth. Munger satisfied Buffett to vary his tack.
“Warren, forget about ever buying another company like Berkshire. But now that you control Berkshire, add to it wonderful businesses purchased at fair prices and give up buying fair businesses at wonderful prices,” Buffett recalls Munger telling him in 1965. “In other words, abandon everything you learned from your hero, Ben Graham. It works but only when practiced at small scale.”
Avoiding losers — and cryptocurrency
Munger was well-known for attributing Berkshire’s investing success — in addition to his personal — to avoiding major mistakes.
And when it got here to investments he noticed as losers, one piece of recommendation specifically rings within the thoughts of many Berkshire shareholders like Mary Ankenbrand of Omaha: “Never to invest in bitcoin”
Indeed, a few of Munger’s distaste for cryptocurrency impressed a few of his most colourful commentary over time.
“To me it’s just dementia. I think the people who are professional traders that go into trading cryptocurrencies, it’s just disgusting,” he stated on the 2018 shareholder assembly. “It’s like somebody else is trading turds and you decide, ‘I can’t be left out.'”
For Munger, any funding that did not have identifiable intrinsic worth wasn’t value shopping for.
“It’s stupid because it’s very likely to go to zero,” Munger stated on the 2022 assembly.
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