Charlie Munger Quotes

I create offbeat advice; I don't follow it. I rarely take third-party advice on my investments.

I really did believe that the most successful investments were the ones that you could own for the long run.

I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.

Diversification has been, and balance, like Wellington, has been so drummed into me, it's part of my personality.

If Warren Buffett could change his mind about investing in airlines, Mohnish Pabrai could change his mind about investing in autos. Pabrai, who has modeled his investment career and fee structure after Buffett's original partnership, counts General Motors, Fiat Chrysler, and Ferrari in his highly concentrated portfolio.

Much like Warren Buffett has said very famously - he doesn't buy technology stocks because he doesn't understand them- I will not buy consumer goods companies because I do not understand them.

As in most subjects relating to money management, there's a wide diversity of opinion on portfolio concentration versus diversification.

Do you really like a particular stock? Put 10% or so of your portfolio on it. Make the idea count … Good [investment] ideas should not be diversified away into meaningless oblivion.

Diversification is something that stock brokers came up with to protect themselves, so they wouldn't get sued for making bad investment choices for clients. Henry Ford never diversified, Bill Gates didn't diversify. The way to get rich is to put your eggs in one basket, but watch that basket very carefully. And make sure you have the right basket.

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 idea of excessive diversification is madness. Wide diversification, which necessarily includes investment in mediocre businesses, only guarantees ordinary results.

You could lose hundreds or thousands one day on paper and gain it all back the next, and it has literally no effect on your immediate future, provided the money you have in the market is money you're investing for the long haul (meaning at least three to five years).

Always keep your portfolio and your risk at your own individual comfortable sleeping point.

Wide diversification is only required when investors do not understand what they are doing.

There's a tendency to look at investments in isolation. Investors focus on the risk of individual securities.

I'm not a money manager, but I can tell you what the conventional wisdom is. The younger you are, the more risk you can take on.

The thing to do with mutual funds is to buy a couple of decent ones, set up an investment plan and then never, ever think about them again, except maybe once a quarter or so when you take a peek at your statements to make sure that you have not accidentally been buying the Fidelity Peace-in-the-Middle-East fund.

Do not buy the hype from Wall St. and the press that stocks always go up. There are long periods when stocks do nothing and other investments are better.

It is important for investors to understand what they do and don't know. Learn to recognize that you cannot possibly know what is going to happen in the future, and any investment plan that is dependent on accurately forecasting where markets will be next year is doomed to failure.

What I'm trying to say is that for the average investor, what I would encourage them to do is to understand that there's inflation and growth. It can go higher and lower and to have four different portfolios essentially that make up your entire portfolio that gets you balanced.

In investing, we intuitively think we should make a number of small bets. A blockbuster strategy is the opposite. It means making fewer huge investments. But it turns out to be safer.

Here is a dirty little secret: Stock-picking is wildly overrated. Sure, it makes for great cocktail party chatter, and what is more fun than delving into a company's new products? But the truth is that individual stocks are riskier than broad indices.

Buy into good, well-researched companies and then wait. Let's call it a sit-on-your-hands investment strategy.

You don't get rewarded for taking risk; you get rewarded for buying cheap assets. And if the assets you bought got pushed up in price simply because they were risky, then you are not going to be rewarded for taking a risk; you are going to be punished for it.