Money and Finance
From the 2005-2013 collection of Munger notes:
From Munger's Harvard-Westlake talk, which I've posted before:
And a related discussion from this year's Berkshire Annual Meeting (more extensive notes HERE, in case you've missed them):
- Charlie Munger Quote
Found via Seeking Wisdom: "If you've got two suitors who are really eager to have you and one is way the hell better than the other, you do not have to spend much time with the other. And that's the way we filter out buying opportunities." -Charles...
- Seth Klarman Q2 Letter Excerpts
Via ValueWalk: Our team is continually improving at knowing where to look for opportunity. Our analysts are doing some really creative work thinking about structural changes in some companies and industries, which has led to several new public equity...
- A Few Notes From The Berkshire Hathaway Annual Meeting
I'll put up some of the better transcripts that start to appear over the next few days, but until then, here are a few highlights from the notes that I took during the meeting. These are based on my scribbling and aren't exact quotes, just summaries...
- Charlie Munger On Opportunity Cost…
Via Whitney Tilson’s notes from the 2006 Wesco Annual Meeting:It doesn’t matter to Warren where the opportunity is. He has no preconceived ideas about whether Berkshire’s money ought to be in this or that. He’s scanning the world trying to get...
- Averaging Down In A Position
When given the opportunity to average down in a position that I own and want more of I'll normally take the chance when it's the best opportunity available. Averaging down gives you a chance to lower your cost basis in a company that you have...
Money and Finance
Charlie Munger on Opportunity Costs
From the 2005-2013 collection of Munger notes:
..........I just wanted to do the best I could reasonably do with the talent, time and resources I had available. That’s what I was doing then and now. Everything is based on opportunity costs. Academia has done a terrible disservice: they teach in one sentence in first-year economics about opportunity costs, but that’s it. In life, if opportunity A is better than B, and you have only one opportunity, you do A. There’s no one-size-fits-all. If you’re really wise and fortunate, you get to be like Berkshire. We have high opportunity costs. We always have something we like and can buy more of, so that’s what we compare everything to.All of you are in the game of taking the lot you have right now and improving it based on your opportunity costs. Think of how life is simplified if you approach it this way.
From Munger's Harvard-Westlake talk, which I've posted before:
Berkshire Hathaway is constantly kicking off ideas in about two seconds flat. We know we’ve got opportunity X, which is better than the new opportunity. Why do we want to waste two seconds thinking about the new opportunity? Many of you come from places that don’t do that. You’ve got to have one horse, one rabbit, one something or rather, and that rabbit is going to be thinking about something which would be ruled out immediately by an opportunity cost available generally to the place – but, it’s a different department. You have to be diversified and so on and so on. It’s easy to drift into this idea that opportunities don’t matter, you’ve got so many different ways of doing things that are better. It isn’t better...........
The right way to make decisions in practical life is based on your opportunity cost. When you get married, you have to choose the best [spouse] you can find that will have you. The rest of life is the same damn way.
And a related discussion from this year's Berkshire Annual Meeting (more extensive notes HERE, in case you've missed them):
Buffett: Charlie and I view our cost of capital as what can be produced by our second best idea.Munger: I've never heard an intelligent cost of capital discussion. Warren's way of having every dollar retained having to produce at least a dollar of market value is the best way to describe our cost of capital. But that's not what people mean when they say it, especially in business schools. But it's simple; our way is right and their's is wrong.
- Charlie Munger Quote
Found via Seeking Wisdom: "If you've got two suitors who are really eager to have you and one is way the hell better than the other, you do not have to spend much time with the other. And that's the way we filter out buying opportunities." -Charles...
- Seth Klarman Q2 Letter Excerpts
Via ValueWalk: Our team is continually improving at knowing where to look for opportunity. Our analysts are doing some really creative work thinking about structural changes in some companies and industries, which has led to several new public equity...
- A Few Notes From The Berkshire Hathaway Annual Meeting
I'll put up some of the better transcripts that start to appear over the next few days, but until then, here are a few highlights from the notes that I took during the meeting. These are based on my scribbling and aren't exact quotes, just summaries...
- Charlie Munger On Opportunity Cost…
Via Whitney Tilson’s notes from the 2006 Wesco Annual Meeting:It doesn’t matter to Warren where the opportunity is. He has no preconceived ideas about whether Berkshire’s money ought to be in this or that. He’s scanning the world trying to get...
- Averaging Down In A Position
When given the opportunity to average down in a position that I own and want more of I'll normally take the chance when it's the best opportunity available. Averaging down gives you a chance to lower your cost basis in a company that you have...