Charlie Munger is a co-chairman of berkshire hathway. It is widely known that he influenced buffet's style of investing. He is also very well known for introducing "latticework of mental models" concept in investing, I consider this concept a best gift from Mr Munger. It is very much useful in investing and also equally useful in general life . I will write separate article on "latticework of mental models" in future.
For successful investing you have to be patiance, disciplined investor. As they say, investment is never risky, but it is investor who is risky. Here I have listed total 8 investment tenets from Mr. Munger.
1. Risk: measure it, avoid it if possible, have a margin of safety, and limit downside.
2. Independence: don't follow the herd, the herd will only do average.
3. Preparation: learning, building mental models, and continual improvement.
4. Humility: acknowledge what you don't know, don't be overconfident, stay within your circle of competence, and watch for errors.
5. Analytic rigor: calculate value before looking at price, and be a business analyst and not a securities analyst.
6. Allocation: consider opportunity costs.
7. Patience: Wait for the right opportunities.
8. Decisiveness: great ideas are rare, so bet big when they come along and when you have confidence in them.
Happy Investing.
No comments:
Post a Comment