Berkshire Hathaway co-founder and long-time friend of Warren Buffett, legendary investor Charles Thomas Munger has built a following of his own among the community. The late billionaire left behind a treasure trove of tried and tested investing advice over the years.<\/p>\n
Even Buffett (95), dubbed \u2018The Oracle of Omaha\u2019 due to numerous impeccable investment decisions over the years, credits Munger <\/a>for teaching him a few things.<\/p>\n In an obit piece after Munger passed away in November 2023, Bloomberg noted his importance as a \u201cstraight man and scold of corporate excesses\u201d who provided a reality check and balance against Buffett’s <\/a>fame and wealth.<\/p>\n Quote of the Day by Charlie Munger<\/strong><\/p>\n \u201cWe have three baskets for investing: yes, no, and too tough to understand.\u201d<\/p>\n What does Charlie Munger’s quote mean?<\/strong><\/p>\n Throughout his years giving advice, Munger is a staunch advocate for investing only in the sectors and businesses that one understands. Speaking to BBC some years back, Munger also outlined four major checklist <\/a>principles he used before making investment bets: Understanding what you’re investing in, identifying the business’ intrinsic value, examining the company’s management, and putting an offer at the right price. He believed that the first qualifier to making an investment is \u201cto deal with things that we’re capable of understanding\u201d.<\/p>\n According to Munger, one cannot successfully invest in a business and get good returns without understanding what the business does, how it plans to make money, or what market opportunities exist for that business. You must also be aware of its USP, in case of high competition.<\/p>\n This is a belief also shared by Buffett, who feels investors to be aware of what they are getting into. In 2011, he told Bloomberg that he initially \u201cmissed the boat<\/a>\u201d for tech stocks, but he does not regret it because he did not understand the business.<\/p>\n The duo consistently advised investors to focus on businesses and sectors they truly understand by avoiding trends and focusing on value proposition, i.e. well-established companies with a clear growth path.<\/p>\n Master of wit: Who is Charlie Munger?<\/strong><\/p>\n Known for his sharp wit, brutal honesty, and no-nonsense thinking, Munger was one of the architects behind Berkshire Hathaway<\/a> Inc.\u2019s success alongside best friend and business partner Buffett. For almost 60 years the duo transformed the company from a failing textile maker into an empire, worth billions.<\/p>\n A lawyer by training, Munger helped Buffett, who was seven years his junior, craft a philosophy of investing in companies for the long term. Buffett has credited him with shaping Berkshire Hathaway\u2019s investing style and pushing the \u2018Oracle of Omaha<\/a>\u2019 away from cheap \u201ccigar-butt\u201d stocks toward high-quality businesses at fair prices.<\/p>\n