Charlie Munger: The Complete Investor (Columbia Business School Publishing)
by Tren Griffin
The four fundamental principles of value investing as created by Ben Graham are as follows: 1. Treat a share of stock as a proportional ownership of the business. Buy at a significant discount to intrinsic value to create a margin of safety. Make a bipolar Mr. Market your servant rather than your master. Be rational, objective, and dispassionate. Part of the benefit of creating a checklist is the process of writing down your ideas. I have always loved the point Buffett made about the importance of making the effort to actually put your ideas in writing. In Buffett’s view, if you cannot write it down, you have not thought it through.
The four fundamental principles of value investing as created by Ben Graham are as follows: 1. Treat a share of stock as a proportional ownership of the business. Buy at a significant discount to intrinsic value to create a margin of safety. Make a bipolar Mr. Market your servant rather than your master. Be rational, objective, and dispassionate.
Part of the benefit of creating a checklist is the process of writing down your ideas. I have always loved the point Buffett made about the importance of making the effort to actually put your ideas in writing. In Buffett’s view, if you cannot write it down, you have not thought it through.
Take the probability of loss times the amount of possible loss from the probability of gain times the amount of possible gain. That is what we’re trying to do. It’s imperfect, but that’s what it’s all about.
This same process explains why Munger has read hundreds of biographies. Learning from the success and failure of others is the fastest way to get smarter and wiser without a lot of pain.
If you cannot accept investing underperformance in the short term in order to achieve long-term investment outperformance, then you are not a candidate for Graham value investing.
"The four fundamental principles of value investing as created by Ben Graham are as follows: 1. Treat a share of stock as a proportional ownership of the business. Buy at a significant discount to intrinsic value to create a margin of safety. Make a bipolar Mr. Market your servant rather than your master. Be rational, objective, and dispassionate."
"Part of the benefit of creating a checklist is the process of writing down your ideas. I have always loved the point Buffett made about the importance of making the effort to actually put your ideas in writing. In Buffett’s view, if you cannot write it down, you have not thought it through."
"Take the probability of loss times the amount of possible loss from the probability of gain times the amount of possible gain. That is what we’re trying to do. It’s imperfect, but that’s what it’s all about."
"This same process explains why Munger has read hundreds of biographies. Learning from the success and failure of others is the fastest way to get smarter and wiser without a lot of pain."
"If you cannot accept investing underperformance in the short term in order to achieve long-term investment outperformance, then you are not a candidate for Graham value investing."
"There are essentially three steps in the process: analyze the business to determine intrinsic value, buy the assets at a significant bargain, and wait."
"Successful Graham value investors spend most of their time reading and thinking, waiting for significant folly to inevitably raise its head."
- →Part of the benefit of creating a checklist is the process of writing down your ideas. I have always loved the point Buffett made about the importance of making the effort to actually put your ideas in writing. In Buffett’s view, if you cannot write it down, you have not thought it through.
- →Munger likes to say that a year in which you do not change your mind on some big idea that is important to you is a wasted year.
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