Charles Thomas Munger (January 1, 1924 – November 28, 2023) was an American businessman, investor, and philanthropist. He served as vice chairman of Berkshire Hathaway and was Warren Buffett's closest partner for over five decades. Munger was renowned for his multidisciplinary approach to investing, advocating for the use of mental models from various fields including psychology, economics, physics, and biology....
"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."
Short-term prices reflect sentiment; long-term prices reflect value.
Read Full Analysis →"It is in the nature of stock markets to go way down from time to time. There's no system to avoid bad markets. You can't do it unless you try to time the market, which is a deadly idea."
Market downturns are natural and unavoidable.
Read Full Analysis →"The market is always making mountains out of molehills and molehills out of mountains. It overreacts to everything. And the intelligent investor profits from this overreaction."
Market extremes create the best opportunities.
Read Full Analysis →Charlie Munger has 3 key principles on margin of safety. The most important one is "Market is a Voting Machine" — In the short run, the market is like a voting machine, tallying up which firms are popular and unpopular.
Charlie Munger applies margin of safety through several key principles including "Market is a Voting Machine" and "Ignore Market Noise". These principles guide practical investment decisions and have been tested across decades of market cycles.
Charlie Munger's approach to margin of safety is distinguished by a focus on long-term thinking and fundamental analysis. With 3 specific principles in this area, Charlie Munger provides a comprehensive framework that investors at any level can study and apply to improve their decision-making.
