Charlie Munger Fans

Question 1

“One way to create an attractive risk/reward is to limit the downside by investing in situations with a large margin of safety. The upside will take care of itself. In other words look down not up, when making investment decisions” — Joel Greenblatt

Question 2

“A retailer must stay smart, day after day” — Buffett

Question 3

“Nobody buys a farm based on whether they think it’s going to rain next year. You’re buying businesses. Because people can make decisions every second with stocks, they think an investment in stocks is different than an investment in a business. But it isn’t” — Warren Buffett

Question 4

If you understand this, you can make serious money as you may find the purchase price to be a bargain since others may be frightened by what they deem as “risk.”

“Some great businesses have very volatile returns – for example, See’s usually loses money in two quarters of each year – and some terrible businesses can have steady results.”

— Charlie Munger

Question 5

“When we bought See’s Candies, we didn’t know the power of a good brand. Over time we just discovered that we could raise prices 10% a year and no one cared. Learning that changed Berkshire. It was really important.”

— Warren Buffett

Question 6

“Two factors helped to minimize the funds required for operations. First, the product was sold for cash, and that eliminated accounts receivable. Second, the production and distribution cycle was short, which minimized inventories”

— Charlie Munger, on See’s Candy.

Question 7

“Smaller capitalisation stocks, whose shares don’t trade in large volumes, obscure securities, and unique situations are generally ignored. These are precisely the ones that hold the most potential profit for you”

— Joel Greenblatt

Question 8

“The future is never clear; you pay a very high price for a cheery consensus. Uncertainty actually is the friend of the buyer of long term values.”

— Warren Buffett

Why you want to buy neglect

Question 9

Ask yourself why do price targets exist? 🤔 And who’s business model is it? If you are a business owner, they do not exist, so why do Investment Banks use them? Because they make you act, so you pay them commission

Question 10

“The best way to minimize risk is to think.”

— Warren Buffett

Question 11

“Businesses do not meet expectations quarter after quarter and year after year. It just isn’t in the nature of running businesses.”

— Warren Buffett

Question 12

“It’s waiting that helps you as an investor, and a lot of people just can’t stand to wait.” 💯%

— Charlie Munger

Question 13

“My only competitive advantage is patience and slightly superior analytics on the same information that everyone else receives. So far that’s worked out fine and we think it will work out in the future as well” - Pabrai

Question 14

“The biggest challenge for investors is patience and that is in short supply. You can check your stock price 30 times a minute. There’s a lot more data, a lot more ability to crunch numbers and compare people. That works against investors”

— Joel Greenblatt

Question 15

“The stock market is designed to transfer money from the active to the patient”

— Warren Buffett

Question 16

“Have patience. Stocks don’t go up immediately”

— Walter Schloss

Question 17

“It’s not a business that requires extraordinary intellect. It does require extraordinary discipline”

— Warren Buffett

Question 18

“We wait patiently for stock prices to fall into our comfort zone, then buy aggressively and hold for the long term. You can do this in any market but it is much more profitable in markets in which you have an enduring edge and fewer wise competitors”

— Li Lu

Question 19

“You want to own businesses that get stronger and stronger and stronger every year”

— Li Lu

Question 20

“If volatility brings our illiquid holdings down in prices, we stand ready to buy more”

— Li Lu

Question 21

“Most institutional investors can’t deal in illiquid securities. Individual investors often avoid such securities because they can’t stomach high volatility. As a result, it often leads to distortions of price verses value where big opportunities lie”

— Li Lu

Question 22

“Wall Street loves price targets. But a discrete target is rife with problems. Ignoring for a moment, analysts’ tendency for anchoring, herding, and short-termism, there are several issues that arise from any single point estimates. First, they are almost guaranteed to be wrong. Making matters worse, by focusing on just a single (wrong) estimate, we magnify overprecision in our judgment. And at the same time, we completely ignore the full range of possibilities”

—- Chris Pavese

Question 23

“We don’t read brokerage reports of anything of the sort”

– Warren Buffett

Question 24

“The time to buy (retailers) is when everybody knows they are missing comp sales, have inventory issues, etc. You know what, if she knows it, then everyone knows it. This is the time you have to be looking at it and thinking like a contrarian”

— Joel Greenblatt

Question 25

“I do not spend too much time on spending trends when buying retailers. I try to avoid the macro. Do I think the news of the Macro is out there already in the market? Do I think that every article I have read for 4 months is already in the market? Yes” 🎯

— Joel Greenblatt