5 Lessons for an Investing Life Well Lived from Charlie Munger

By TradeSmith Research Team

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The investing world lost a legend on Tuesday.

Charlie Munger, Warren Buffett’s right-hand man, passed away at 99 years of age.

Anyone who’s ever sought wisdom about life and markets has surely benefited from Munger’s timeless down-to-earth quotes and teachings.

While we could spend months recounting all of the wisdom Munger offered to the world, today I’ll 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 “I think that a life properly lived is just learn, learn, learn all the time.”

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, I’m better.

Never stop learning.

Lesson No. 2: Keep reading.

Munger was an avid reader. In his book, Poor Charlie’s Almanack, he wrote, “In my whole life, I have known no wise people who didn’t read all the time — none, zero.”

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, there’s 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 you’re into macro trading, read Stanley Druckenmiller. If you’re 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.

“The big money is not in the buying and selling, but in the waiting.” That passage excites me every time I read it.

It’s true. Every single monster winning stock I’ve 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 “fastball.”

If your curveball stinks but your fastball is promising, don’t spend extra time developing the curveball. Instead, master what you’re excelling at, the fastball.

Munger stated: “Patience can be learned. Having a long attention span and the ability to concentrate on one thing for a long time is a huge advantage.”

That’s powerfully true. If your passion is dividend investing, focus there. If it’s trading options, more power to you.

If you’re 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.

Lesson No. 5: Give the gift of knowledge.

We only have a select amount of time on this earth. Why not spend every day helping others?

Charlie put it simply, “The best thing a human being can do is to help another human being know more.”

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 that’ll 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 Munger’s 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!


Lucas Downey,
Contributing Editor, TradeSmith Daily