I don’t think there is an investor who has had a larger impact on me than Charlie Munger. When I first moved to Africa I bought The Poor Charlies Almanack, a large coffee table book, and kept it with me as I moved around the continent. That heavy book was a burden to carry, but I just loved the content too much to leave it behind. When I eventually moved to Cape Town I didn’t have space for it, so it had to remain in Dar Es Salaam. But, after a friend said he was coming to visit, I saw an opportunity and asked him to bring it. He said yes, no doubt thinking it a small paperback. I still laugh thinking about the call I got after he saw this was no paperback, rather a blue behemoth of worldly wisdom that took up half his carry on weight allowance. I still have that book. And I still read it.
There are many great ideas that Charlie Munger is famous for. The ones that I relate to most are three.
- Simplicity in Understanding: The importance of keeping things simple and clear, avoiding unnecessary complexity in investment strategies. I apply this to many aspects of my life. I’ve always paid the price when I complicated processes or thinking in my life. I think humans have a natural tendency to try and meddle with things. We are naturally optimistic, and believe we can improve by addition. It’s true insight to finally realize that simplicity is almost always better.
- Long-term Perspective: Maintain a long-term approach to investing, focusing on sustainable business models and steady growth rather than short-term gains. When I first started investing I tried to play the market. Buying dips and selling on highs. I never performed worse. My best picks have always been stocks I selected for my conviction in them, and held for 5+ years. That’s not even long term either.
- Learning and Adaptability: Just always learn and spend time reading. Your mind must be inquiring. You must be discontent with the status quo. Always investigate, always ask why, and always remain curious.
Finally here is a great video to watch of the legend.