Munger on Intelligent Investing

With markets at record highs – trading at very high valuations – I felt it was timely to revisit investing lessons from Charlie Munger. Sadly, Charlie passed away late last year – just shy of his 100th birthday. Whilst Charlie was an incredible investor – what I loved most was his ability to draw insights from many disciplines – which included the study of psychology, economics, physics, biology, history, architecture among other things. This enabled Charlie to develop a lattice of “mental models” to cut through difficult problems. Over the years, I’ve found Charlie’s insights into investing, business and life not only rare but generally correct. What’s more, they stand the test of time.

When Bad News is Bad News

Last weekend I questioned whether markets could break out to the upside; or perform what trader’s refer to as a “back and fill”. My best guess was the latter. In turns out, things traded ‘per the script’, where the S&P 500 suffered its worst week since March 2023 – giving back 4.20%. The Nasdaq fared far worse – shedding ~6% – led by large losses in popular AI chip stocks. So why are market’s worried? It’s concerns about growth. With a market trading close to ~22x forward earnings – expecting YoY EPS growth of 11% — that’s not consistent with ‘slowdown’ scenario.

Charlie: More than a Brilliant Investor

“The best thing a human being can do is to help another human being know more” – Charlie Munger. Very few things will change your trajectory in life (and/or business) as much as learning and education.The more you dedicate your time to obtaining knowledge – the better you will be. But take it a step further… the pathway your life takes will be a function of the decisions you make. Which begs the question – how does one make higher-quality decisions and/or fewer mistakes? Charlie Munger offered us a framework of mental models to do just that… this will be his real legacy.

For a full list of posts from 2017…