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....
"The idea of excessive diversification is madness. Wide diversification, which necessarily includes investment in mediocre businesses, only guarantees ordinary results."
Following crowds leads to mediocre returns.
Read Full Analysis →"Envy is a really stupid sin because it's the only one you could never possibly have any fun at. There's a lot of pain and no fun. Why would you want to get on that trolley?"
Envy destroys rational investment decision-making.
Read Full Analysis →"The big money is not in the buying and selling, but in the waiting. And the waiting is the hardest part."
Patience is the most profitable temperament.
Read Full Analysis →Charlie Munger has 3 key principles on market psychology. The most important one is "The Folly of Crowds" — The idea of excessive diversification is madness.
Charlie Munger applies market psychology through several key principles including "The Folly of Crowds" and "Envy as Deadly Sin". These principles guide practical investment decisions and have been tested across decades of market cycles.
Charlie Munger's approach to market psychology 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.
