📖Charlie Munger

Waiting for the Fat Pitch

🌿 Intermediate★★★★★

The wise investor bets big when the odds are overwhelmingly in their favor.

💬

The wise ones bet heavily when the world offers them that opportunity. They bet big when they have the odds.

— Poor Charlie's Almanack，2005

🏠 Everyday Analogy

Investing is like an expert angler who doesn't cast nets at the sight of water. They wait quietly where the richest schools of fish gather, and once a big fish bites, they reel in with full force. While ordinary anglers frequently change spots, experts patiently hold their ground at the best fishing holes, catching more big fish in a day than others do in a month.

📖 Core Interpretation

Investing does not require frequent action. Wait for exceptional opportunities and then strike with concentrated positions.
💎 Key Insight：Munger believes most investors make too many small bets. Instead, wait for situations where you have massive knowledge advantage and high probability of success, then concentrate your capital. This requires extreme patience — years of waiting — followed by extreme decisiveness. The pattern is: study broadly, wait patiently, act aggressively, then hold.

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❓ Why It Matters

Most of the time, staying put is the right choice. Good opportunities are rare, but they will certainly arise.

🎯 How to Practice

Set strict criteria and do not invest unless they are met; when they are met, have the courage to invest heavily.

🎙️ Master's Voice

Invert, always invert.
Munger borrowed this from mathematician Jacobi. Instead of asking how to succeed, ask how to fail and avoid that. This negative approach often reveals more than positive thinking.

⚔️ Practical Guide

✅ Decision Checklist

  • Have I inverted the problem?
  • What would guarantee failure?
  • Am I avoiding obvious mistakes?

📋 Action Steps

  1. List all ways this investment could fail
  2. Solve problems backwards
  3. Focus on avoiding stupidity first

🚨 Warning Signs

  • Only thinking about upside
  • Ignoring failure modes
  • No pre-mortem analysis

⚠️ Common Pitfalls

✕Waiting requires immense patience.
✕Distinguish between indecision and patient waiting

📚 Case Studies

1
See’s Candies Purchase (1973)
Munger and Buffett waited for a truly exceptional business at a fair price, then bought See’s Candies in 1973 instead of cheaper, mediocre companies.
✨ Outcome：See’s produced huge returns and cash for decades, validating waiting for rare high-quality opportunities.
2
Avoiding Dot‑Com Bubble (1999)
During the late-1990s tech mania, Munger refused to buy overpriced internet stocks, preferring understandable businesses with durable economics despite underperforming in the short term.
✨ Outcome：When the bubble burst in 2000–2002, Berkshire avoided large losses and capital was preserved for better future pitches.

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