Tribute to Charlie Munger, lawyer and business partner of Warren Buffet.
Charles Thomas (Charlie) Munger was born in 1924 in Omaha, Nebraska. He was a lawyer and investment legend. He was also Warren Buffet's close friend and business partner. They met in 1959 and became close friends. A friendship that would last 60 years.
This friendship evolved into a successful business relationship as they transformed a small textile mill into a multi-billion conglomerate. Today, it is one of the most successful corporations: Berkshire Hathaway, a $631,1 billion conglomerate, and one of the biggest in the world. It is headquartered in Omaha, Nebraska, The United States. Berkshire Hathaway's most important investments are Wells Fargo, Apple Inc., Bank of America, The Coca-Cola Company en American Express.
Charlie, who was still picking winners well into his 90's will also be remembered for his humor. He lived well below his means and believed that anyone who could save could let his money compound over decades. Although that is a winning strategy, most people don't have the luxury of waiting decades.
Charlie, with his business partner Buffett, excelled in making concentrated investments, rather than buying 100 companies. Together, they were able to pick the winners. Charlie called diversification 'diworsification'.
What can you learn from Charlie's successes?
Besides his outrage regarding the development of cryptocurrencies, we can still implement his investment philosophy in this market.
- One of the most important things in my honest opinion is his advice to not buy too many horses to put into your portfolio. Instead, deep dive into a few projects, once you're hooked, follow them up close. For cryptocurrencies, it would mean that you would only need to own projects that have established themselves by now and belong in the top 10 by market capitalization.
- And most importantly: be patient.