Quote of the day by Charlie Munger: ‘Good investment opportunities don’t come often… you’ve got to be prepared to act’
Charles Thomas Munger was a co-founder of Berkshire Hathaway along with Warren Buffett and a major reason for the company’s success. The late investment guru, better known as Charlie Munger, has had a treasure trove of advice for investors looking to make their mark over the years.
An important piece of advice: “Be ready to act when opportunities arise.”
Quote of the day from Charlie Munger
“Many opportunities in life tend to last a short time due to temporary inefficiencies… For each of us, really good investment opportunities will not come along very often and will not last very long, so you must be ready to act and have a prepared mind.”
What does Charlie Munger’s quote mean?
Munger’s remarks, a transcript of his speech at the Wesco Annual Financial Meeting in May 2003, emphasize two important characteristics of making good investment decisions: patience and preparedness.
Over the years, he noted, it has become more difficult to hold cash and “do nothing” because great opportunities are few and far between. He encouraged investors to have a curious mind and prepare for when an opportunity arises.
Explaining his and his friend and business partner Warren Buffett’s investment philosophy, he added: “If you took out our top 15 decisions, we would have a pretty average record. It wasn’t hyperactivity, but it was a great deal of patience. You stuck to your principles and when opportunities arose, you attacked them with great vigor.”
Charlie Munger’s golden words on avoiding big mistakes
According to 95-year-old Warren Buffett, he received important advice about avoiding big mistakes from Charlie Munger; he believed: “Write your obituary the way you want it to be written and live your life accordingly.”
Munger shared the advice with CNBC just days before his death in November 2023, adding that starting at the end was “not a bad idea.”
He added, “I wrote my obituary the way I lived my life, and if you want to pay attention to it, that’s okay with me. And if they want to ignore it, that’s okay with me, too. I’m going to die. I’m very good at spotting unfair advantages, and just as I got unfair advantages in my old age, I got unfair advantages in my old age. And when they came, I caught ’em: boom, boom, boom.”
Who is Charlie Munger?
Charlie Munger was one of the architects behind Berkshire Hathaway’s success.
Known for his sharp intelligence, brutal honesty and logical thinking, Munger was Warren Buffett’s best friend. He was Buffett’s alter ego, sidekick and sidekick for almost 60 years as he transformed Berkshire Hathaway Inc. from a failing textile manufacturer into an empire worth billions.
Trained as a lawyer, Munger helped Buffett, who is seven years younger than him, create a philosophy of long-term investing in companies. Buffett credited him with shaping Berkshire Hathaway’s investment style and steering the ‘Oracle of Omaha’ away from cheap “cigar butt” stocks and toward high-quality businesses at reasonable prices.
Under their management, Berkshire averaged annual gains of 20% from 1965 to 2022; this was roughly twice the pace of the S&P 500 Index. Decades of compound returns have made the duo billionaires and folk heroes of adoring investors.
Munger was vice chairman of Berkshire from 1978 until the day he died in 2023 at age 99. He was also among the company’s largest shareholders, with shares worth approximately $2.2 billion. His overall net worth was approximately $2.6 billion, according to Forbes.
