Charlie Munger, business partner of Warren Buffett, recently spoke at the 2019 Daily Journal Annual Meeting. You can watch the full recording here.
Here are my key takeaways:
#1: Fish where the fish are
For Charlie, that means China. High-quality companies in China are currently available for cheaper prices than similar companies in the USA.
Charlie has outsourced his China investments to Li Lu. This is the only time he has ever given money to an external manager.
#3: Don’t be too active
As a value investor, you need to be okay with inactivity. Be a good picker and then hold for a very long time. For example, Charlie has held Berkshire Hathaway and Costco for many decades.
#4: No exit strategy
Charlie does not have an exit strategy or price target for his investments. He rarely sells.
#5: Have a “Too hard” bucket
Charlie has three categories when evaluating investing opportunities: Yes / No / Too hard. Especially the last category solves many problems. Charlie looks for the easy and obvious opportunities, and discards the rest.
#6: Charlie on Stoicism
He admires stoicism and has learned a lot from stoic thinkers. I didn’t expect anything else. In fact, I view Charlie and Warren as modern stoics!
I am fascinated by space and the universe.
Recently I discovered Google Maps Space View. You can access it by going to Satellite view and then zooming all the way out (only on desktop).
You can turn the earth, see where the sun is and what parts of Earth are bright or dark.
As you can see, Earth is nothing else than a cabriolet spaceship, floating through darkness, lit by a burning star.
The Stoics advise us to regularly zoom out and watch things from the cosmic perspective. It helps to see things more clearly and not take ourselves too seriously.
So, sit back and enjoy the ride through darkness!
A passion is a “strong and barely controllable emotion”. The Late Latin word passio litteraly means “suffering” (from Latin pati “to suffer”).
Who enjoys suffering? I don’t.
The use of the word has been declining until 1980, with good reason. Then the trend reversed. It became a mantra of the tech/startup world. You’ve got to “follow your passion” and “be passionate”, they said.
That’s foolish, because passions are toxic.
Anger? Toxic. Overly intense desire for something? Toxic. Obsession? Toxic. Depression? Toxic. Anxiety? Toxic. The list goes on and on.
My aspiration is to live a good life, as proposed by the Stoics. A life in accordance with human nature and the laws of the universe. With a sense of freedom and peace of mind.
“But isn’t passion necessary to achieve great things”, you might ask. No, I don’t believe that.
You can aspire to be useful to as many people as possible. You can work hard and perform your duty. You can be fully engaged in life.
The important thing is to focus on your inner scorecard. And not be attached to things outside of your control.
Apply self-control and don’t become a victim of the emotional roller coaster. Being overly fixated on the past leads to depression. Being overly fixated on the future leads to anxiety. Avoid both.
It’s healthy to reflect on the nature of impermanence, especially our human mortality. The Stoics recommend to prepare for your own death every day.
During one of my daily reflections, I looked it up. Each day, 150,000 humans die. That means that in 2019, more than 50 million people will die.
It’s good to remember that one day, today will be our last day. And one year, this year will be the one on our grave stone.
Remember what Steve Jobs said:
“Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma – which is living with the results of other people’s thinking. Don’t let the noise of other’s opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition.”
Happy 2019, everybody! Don’t waste it.
(I use WeCroak for daily mortality reminders.)
As 2018 is coming to a close, I wanted to take this opportunity to share with you the most important books I have read this year. Enjoy!
My favorite books of 2018
1. The Art of the Good Life by Rolf Dobelli (audio version):
This was the most important book I read in 2018 (I’ve read the original German version). The book was so good that I have read it twice and have scheduled to re-read it at least once a year. It gives very practical recommendations of how to live a better life, and I’ve been able to implement multiple things.
2. A Guide to the Good Life by William B. Irvine (audio version):
It’s a great companion to Rolf Dobelli’s book (see above), and it’s a wonderful introduction to the stoic way of life. I’ve decided to not only read it, but to study it, and to integrate these practices into my life. This little iPhone app is helping me to practice it every day.
3. Sleep Smarter by Shawn Stevenson (audio version):
This book helped me fix my bad sleeping habits. I’m now sleeping more and better! A great companion book is Why We Sleep by Matthew Walker (audio version). A great tool that I use to track my sleep is the Oura Ring. According to Why We Sleep it’s the most accurate sleep tracker available.
What were yours? Let me know on Twitter.
I only recommend books that I liked. I use Audible for (almost) 100% of my book reading. My current audio library contains 455 titles, and counting…