📖Charlie Munger
Selling is Last Resort
Selling should only happen when the original thesis is broken.
Our favorite holding period is forever. We are satisfied owning wonderful businesses at reasonable prices. To us, selling is an admission of an earlier mistake.
🏠 Everyday Analogy
📖 Core Interpretation
Charlie Munger frames investing as a compounding game. Time amplifies quality and discipline, while unnecessary activity often destroys long-horizon returns.
💎 Key Insight：Frequent selling usually indicates poor buying decisions.
AI Deep Analysis
Get personalized insights and practical guidance through AI conversation
❓ Why It Matters
Short-term noise often forces investors out before value is realized. Long-term discipline increases the odds that fundamentals, not emotions, drive outcomes.
🎯 How to Practice
Extend research and review horizon, reduce unnecessary turnover, and adjust only when intrinsic value, risk, or opportunity cost materially changes.
⚠️ Common Pitfalls
Calling it long term while never reviewing thesis
Overtrading and damaging compounding
Ignoring opportunity cost and alternatives
📚 Case Studies
1
Avoiding Subprime Exposure (2008)
Munger analyzed permutations of mortgage risks, derivatives, and leverage. Concluded many financial firms faced catastrophic tail outcomes and avoided highly leveraged or opaque instruments.
✨ Outcome：Berkshire largely sidestepped the worst subprime losses and instead invested selectively in stronger franchises during the crisis.
2
Long-Term Capital Management Collapse (1998)
Highly leveraged hedge fund faced critical losses as correlated bets backfired, threatening systemic stability and forcing a coordinated bailout.
✨ Outcome：Munger highlighted it as a lesson in the dangers of leverage, correlation, and overconfidence, reinforcing Berkshire’s low-leverage, margin-of-safety philosophy.
See how masters handle real scenarios?
30 real investment dilemmas answered by legendary investors
Explore Scenarios →