Charlie Munger’s 10 Rules for Investment Success | Dividends Value

Charlie Munger’s 10 Rules for Investment Success | Dividends Value

Charlie Munger’s 10 Rules for Investment Success

Charlie Munger, Warren Buffett’s friend and partner, is quite an investor in his own right. A recent Motley Fool article “Charlie Munger’s 10 Rules for Investment Success” details Munger’s 10-step investment checklist from his book Poor Charlie’s Almanac. Here are the steps:
  1. Measure risk: All investment evaluations should begin by measuring risk, especially reputational.
  2. Be independent: Only in fairy tales are emperors told they’re naked.
  3. Prepare ahead: The only way to win is to work, work, work, and hope to have a few insights.
  4. Have intellectual humility: Acknowledging what you don’t know is the dawning of wisdom.
  5. Analyze rigorously: Use effective checklists to minimize errors and omissions.
  6. Allocate assets wisely: Proper allocation of capital is an investor’s No. 1 job.
  7. Have patience: Resist the natural human bias to act.
  8. Be decisive: When proper circumstances present themselves, act with decisiveness and conviction.
  9. Be ready for change: Accept unremovable complexity.
  10. Stay focused: Keep it simple and remember what you set out to do.
I am sure each of us can relate to one or more of these. I am particularly drawn to #3 and #5, but #8 is tops with me. I am driven to find that jewel in the rough that was missed by the herd. You can’t beat the head by following it!

About EdR

Tant que les lions n’auront pas leurs propres historiens, les histoires de chasse continueront de glorifier le chasseur. (proverbe africain)

Posted on March 9, 2011, in Charlie Munger, Rules for Investment Success. Bookmark the permalink. Leave a comment.

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