Thursday, January 17, 2013

Munger on Mistakes

Yeah baby!

A fantastic post on Buffett's relatively unknown sidekick - Charlie Munger.
It's a link one should keep going back to...

My favourite:

Munger and Buffett believe that the passage of time is the friend of the investor or business person and impatience his or her enemy. When asked once about whether he was worried about a big drop in the value of Berkshire Munger said in a very direct way:
“Zero.  This is the third time Warren and I have seen our holdings in Berkshire Hathway go down, top tick to bottom tick, by 50%.  I think it’s in the nature of long term shareholding of the normal vicissitudes, of worldly outcomes, of markets that the long-term holder has his quoted value of his stocks go down by say 50%.  In fact you can argue that if you’re not willing to react with equanimity to a market price decline of 50% two or three times a century you’re not fit to be a common shareholder and you deserve the mediocre result you’re going to get compared to the people who do have the temperament, who can be more philosophical about these market fluctuations.”

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