📖Charlie Munger
Market is a Voting Machine
Short-term prices reflect sentiment; long-term prices reflect value.
In the short run, the market is like a voting machine, tallying up which firms are popular and unpopular. But in the long run, the market is like a weighing machine, assessing the substance of a company.
🏠 Everyday Analogy
📖 Core Interpretation
Charlie Munger emphasizes durable business quality over short-term noise. A strong model, real competitive edge, and disciplined capital allocation matter more than quarterly excitement.
💎 Key Insight：Market efficiency is a long-term phenomenon, not short-term.
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❓ Why It Matters
Without business-quality filters, investors drift toward stories rather than economics. Durable cash generation is what supports long-term valuation.
🎯 How to Practice
Use a checklist covering moat, management, unit economics, and capital allocation; track long-term cash generation instead of quarter-to-quarter noise.
⚠️ Common Pitfalls
Buying narratives instead of cash-generating economics
Overreacting to short-term operating noise
Ignoring management quality and capital allocation
📚 Case Studies
1
Coca‑Cola & the Asian Currency Crisis (1994)
After heavy Coca‑Cola investments, Asian currency turmoil raised fears about earnings and valuation, testing conviction in the brand’s global durability.
✨ Outcome：Berkshire held its stake; Coke’s long‑term performance validated the focus on durable competitive advantages over short‑term macro noise.
2
Coca-Cola Investment Decision (1988)
Charlie Munger employed multiple models, including psychology, brand effects, and economies of scale, to analyze Coca-Cola.
✨ Outcome：Confirm this is an exceptional investment.
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