RIP to a legend⦠[TradeSmith Daily]( 5 Lessons for an Investing Life Well Lived from Charlie Munger
By Lucas Downey, Contributing Editor, TradeSmith Daily The investing world lost a legend on Tuesday. Charlie Munger, Warren Buffettâs right-hand man, passed away at 99 years of age. Anyone whoâs ever sought wisdom about life and markets has surely benefited from Mungerâs timeless down-to-earth quotes and teachings. While we could spend months recounting all of the wisdom Munger offered to the world, today Iâll share five of my favorite lessons from the late vice chairman of Berkshire Hathaway. Lesson No. 1: Never stop learning.
In the 2017 Berkshire Hathaway Annual Meeting, Munger said âI think that a life properly lived is just learn, learn, learn all the time.â In all facets of life, including investing, always focus on developing and nurturing your skills. The best investors, no matter their forte, are on a never-ending quest for education and wisdom. Every setback is an opportunity to grow, and a step closer to the goal. Each lump I take, I get wiser. Each triumph, Iâm better. Never stop learning. RECOMMENDED LINK [âSafeâ Investors Who Donât Get Out of Cash NOW Could Lose Everything Over the Next Six Months](
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[Watch This Video]( Lesson No. 2: Keep reading.
Munger was an avid reader. In his book, Poor Charlieâs Almanack, he wrote, âIn my whole life, I have known no wise people who didnât read all the time — none, zero.â Wisdom is bred through constantly turning pages. Our minds are sponges, soaking up precious tidbits of information that shape our perceptions. As it relates to investing, thereâs no quicker way to sharpen your toolkit than by continuously reading subject matter that inspires you. Learn from past traders and investors and plot your own journey. If youâre into macro trading, read Stanley Druckenmiller. If youâre into long-term investing, learn about Warren Buffett and Peter Lynch. No matter what you read, just keep reading. Lesson No. 3: Have a long-term mindset.
Munger put a lot of focus on the long-term mindset… going for the big buck rather than the quick buck. âThe big money is not in the buying and selling, but in the waiting.â That passage excites me every time I read it. Itâs true. Every single monster winning stock Iâve ever had took years of simply holding. Earlier this week I shared my personal story with Microsoft, [growing a $7,200 investment to $40,000 by doing absolutely nothing](. I can only tell that story because I sat on my hands and waited. Have a long-term mindset. Lesson No. 4: Perfect your âfastball.â
If your curveball stinks but your fastball is promising, donât spend extra time developing the curveball. Instead, master what youâre excelling at, the fastball. Munger stated: âPatience can be learned. Having a long attention span and the ability to concentrate on one thing for a long time is a huge advantage.â Thatâs powerfully true. If your passion is dividend investing, focus there. If itâs trading options, more power to you. If youâre like me and are constantly hunting for the next 10-bagger, concentrate on the best growth businesses growing earnings year after year. Perfect your investing fastball. RECOMMENDED LINK [Is Amazon about to drop? (See here)](
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We only have a select amount of time on this earth. Why not spend every day helping others? Charlie put it simply, âThe best thing a human being can do is to help another human being know more.â Give the gift of knowledge. This right here is what I strive to do here at TradeSmith… we all do. Giving information each week is great, but offering insights thatâll make you a better investor is the best value we can ever offer. Wall Street and the world lost an investing legend this week. But Charlie Mungerâs teachings will empower investors for generations. Charlie exemplified a life dedicated to continuous wisdom. We should all strive to do the same. Your next investing chapter has yet to be written… Just remember to keep it simple. Have a great week! Regards, Lucas Downey,
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Do you have a favorite Charlie Munger witticism that investors should know and live by? Write us at feedback@TradeSmithDaily.com with your thoughts, and weâll look to share them with your fellow readers. Get Instant Access
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