January 22, 2019

Charlie Munger: The Merits Of Long-Term Investing

Short Bio: Charlie Munger is a 95 years old investor and the Vice Chairman of Berkshire Hathaway.

Video duration: 23m51s

Charlie Munger on the merits of long-term investing:

"If you invest the way people gamble in casinos you're not gonna do very well. So ,it's the long-term investment that works best. But if you like the action of investing and sometimes winning, sometimes losing, just like people like the action when they gamble in a casino, those people are not my people. I like the long-term investors who figure out something that's going to work over the long term and buy that."

Charlie Munger highlights a paradox in Chinese behavior when it comes to investing in the markets and the desire to gamble:

"The Chinese do have a long attention span and that is a hugely desirable quality because you you're more likely to get the right answer if you think deeply and hard about a subject for a long time and it's odd there's a group of people who are so good at having a long attention span like to gamble so much which is quite counterproductive."

Interestingly, Munger considers the short-term market players as "gamblers":

"We have a view as to what the intrinsic value is of what is being traded and we only buy it when we think it's worth more than we're paying so we're trying to make a long-term investment by waiting for something to be under priced and then buying it and we don't give a damn about all these gamblers in the market."