- Charlie Munger gives investing tips and blasts stock-market gamblers in a newly surfaced interview.
- Warren Buffett's business partner underlines the power of focus, patience, and independent thought.
Charlie Munger offered up investing advice, and complained about degenerate gamblers in the stock market, during a conversation with Todd Combs that was recently uploaded to YouTube.
Warren Buffett's right-hand man and Berkshire Hathaway's 99-year-old vice-chairman spoke to Buffett's investment manager at a "Singleton Prize for CEO Excellence" event in April 2022. He emphasized the importance of focus, patience, and independent thought for anyone hoping to beating the market.
Munger praised the US government for preventing an economic catastrophe during the pandemic, and flagged the enormous threat that nuclear war poses to the world.
Here are Munger's 9 best quotes, lightly edited for length and clarity:
1. "It's perfectly possible to do splendidly well if you have the right temperament. Just go at it over a long time. What I am is a guy who has been able to take moderate obsession and a long attention span and turn them into pretty good results."
2. "I just stay away from the problems that can't be fixed and pick the ones that can – I don't like unlimited failure. I don't want to fish forever and never catch a fish. I have to have some reinforcement. So I pick some things that can be done and do them."
3. "The people who tend to get the best results are these fanatics who just keep searching for the great businesses. The best of them don't expect to find 10 or 20 or 30 — all you need are one or two." (Munger said he knows an investment banker who made early bets on just two stocks, Home Depot and Eli Lilly, and became a billionaire as a result.)
4. "There's huge potential if you can do the compounding correctly, but it's very hard to do. The competition is very, very intense. You have to stay out of the seductive craziness that goes on around you all the time, when there are huge incentive pressures, and we all like to do what other people are doing. None of us wants to move to the North Pole and sit there while making $100 million. We all like to be in a pleasant places like Beverly Hills, having an expensive breakfast."
5. "We have a liquid stock market which is two things at once — it's a place for people who are doing long-term investment rationally to go and make their transactions, and it's a place for another bunch of people to do casino gambling. We mix them up totally. It's an absolutely insane thing for the country. It's like we mixed up running the army with child prostitution. It's ludicrously crazy, but everybody that's making money out of it loves it this way."
6. "They love gambling, and the trouble is, it's like taking heroin. A certain percentage of people when they start just overdo it. It's that addictive. It's absolutely crazy, it's gone berserk. Civilization would have been
a lot better without it." (Munger was calling out excessive hype and reckless speculation in the stock market.)
7. "Now, what earthly good is it for our country to make the casino part of capitalism more and more efficient, and more and more attractive, and more and more seductive? It's an insane public policy. It causes terrible things. You could argue that it caused the Great Depression. And the Great Depression brought in Hitler, who came pretty close to ending the civilized world. So I think this stuff is quite serious, but I don't think we can do much about it."
8. "If we hadn't intervened the way we did, which we've never done on this scale before, we might have had one of the most unholy financial messes. We were headed for something that was going to try and become the Great Depression." (Munger was referring to US authorities' efforts to shore up the economy at the height of the COVID-19 pandemic.)
9. "What are the chances of a really major calamity for the human race in the next 100 years? Certainly it's at least 10%. Flirting as close to nuclear war as we are now with these paranoid rulers is dumb."