Warren Buffett and Charlie Munger

What learned about investment and life from Warren Buffett and Charlie Munger were from these quotes, notes and ideas. I noted it here and wishing you all find them helpful.

Investment Lessons

  • Book value simply records what was put into the business. The key to calculate value is determining what will come out of the business.
  • Eight or ten in a lifetime, or even one, will get your return.
  • Mistake is made by those who gamble, continuing to gamble when the right thing would be to walk away.
  • Debt is meaningless without looking at the ability to pay.
  • Three wonderful business is more than you need in this life and would serve you much better than 100 average business.
  • To understand the business, it means to be able to have a pretty good idea where it will be in 10 years.
  • Charlie Munger emphasized that they have made money with a wonderful business at a fair price than a fair business at a wonderful price.
  • Developing a temperament of owning securities without fretting. If you focus on the price, you are really saying that you believe the markets knows more than you do. If you think of the value of the business instead of the price, you will sleep better.
  • Successful investing requires not extraordinary intellect but extraordinary discipline.
  • Conduct yourself so that if there is a financial crunch, you’ll get though.
  • Buffett summed with regard to financial calamities: (1) don’t let it wipe you out, and (2) be prepared to take advantage.
  • Easy lending causes more building and higher prices. Eventually, when you have enough new anything, prices will decline.
  • The key is to follow logic rather than emotion. Focus on what is important and knowable rather than on public opinion.
  • To be greedy when others are fearful. If you get scared yourself, then you won’t make a lot of money in securities.
  • Most people would invest better with no daily quotations. Buy a good business, and hold it for a long, long time.

For wealth, spend less than what you make. Know and stay within your circle of competence. The only businesses that matter are the ones you put money in. Keep learning over time. Don’t lose. Insist on a margin of safety.

  • Do what suits your temperament. Do what works better with experience. Do what works and keep doing it. REPEAT WHAT WORKS.
  • If you think about business and buy businesses for less than they’re worth, you’re going to make money.
  • Buffett noted that his first rule is to play tomorrow. That means not going broke no matter what happens. So keep plenty in reserves, and go low on debt.
  • If it’s a good business at a good price, we buy it. There is always going to be bad news out there. We look to buy value. We don’t look to headline.
  • To ignore what you know to listen to someone else who doesn’t know, doesn’t make sense.
  • People will do very well owning good businesses if they don’t pay too much for them.
  • If you don’t find a way to make money while you sleep, you will work until you die.

Life lessons

  • After you have enough for daily life, all that matters is your health and those you love. Likewise in work, what really matters is that you enjoy it and the people with which you work. Charlie Munger said “What good is health? You can’t buy money with it.”
  • The real key is to know what you really want to avoid and give those things a wide berth. Do this and life will go much better.
  • We each receive one body and one mind for a lifetime. You cannot repair them at the age 60. You must maintain them. Develop your mind and good health habits when you are young, and it will enhance your life.
  • Developing good characters and good mental habits and to learn as you go. “Avoid dumb stuff” like going to the race track, risking AIDS, experimenting with cocaine or getting into debts.
  • “I feel terrific. I love what I do. I work for people I love. I have more fun everyday. And I have a good immune system.” – Warren Buffett.
  • If you get to 65 or 70 and the people that you want to have love you actually do love you. You’re a success.

All the best!

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