8 famous investing principles of Charlie Munger on his 100th birthday

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Charlie Munger would have turned 100 years old today. Although he came close to reaching this century, it remained just out of reach, as he departed from us on November 28, 2023. The renowned investor left behind an extensive legacy detailing the essential factors behind his success, presented in his distinctive style characterised by straightforwardness and humour.

Who exactly was Charlie Munger? This individual collaborated with Warren Buffett to transform Berkshire Hathaway Inc. into a formidable global investment entity. Munger, a prolific speaker, frequently delved into extensive discussions on investment strategies.

His comprehensive principles of investing are widely deliberated upon by both novice and seasoned investors across the globe. Munger’s investing principles encompass a mixture of rationality, psychology, and a broad curiosity that extends beyond finance, offering applicability to various facets of life. Below are some of his crucial principles: Munger frequently employs the metaphor of Mr Market, portraying him as a manic-depressive entity consistently presenting opportunities to buy or sell a share in a business.

In moments of euphoria, Mr Market may propose prices well beyond the intrinsic value of the business. Conversely, during periods of gloom, he might practically give it away. The crucial approach is one of patience and discipline, choosing to buy only when Mr Market offers a bargain and selling when his actions become irrational.

Munger advocates for investors to concentrate on domains where they possess a profound understanding of the businesses and the competitive environment. This “circle of competence" is cultivated through years of study and hands-on experience. By adhering to your