The investing world lost our Confucius, Charlie Munger, this year. His words of wisdom were the fortune cookies of finance—short and sweet. Perfect sized treats in a world overstuffed with information.
Munger said:
“When you mix raisins and turds, you’ve still got turds.”
“People calculate too much and think too little.”
“A lot of our respected financial institutions are just casinos in drag.”
“Step by step you get ahead, but rarely in fast spurts.”
Munger, with his billions in wealth, put his money where his mouth was, a rarity in a “look at me” Tik Tok world. He lived in the same house for decades, liked his cozy recliner, and was the happiest he’d ever been right up to the very end. He enjoyed his work. And he was generous, sharing advice on what made good investors great. In his mind, it was what’s between the ears that kept investors from finding what they deserved. He dedicated pages upon pages to the subject (see below).
In my father-in-law’s newsletter, Richard C. Young’s Intelligence Report, he signed off each month with the words, “Make it a Good Month.” Because he knew he could offer you every tool in the world you needed to help you make money, but it was up to you to “make it” happen. And many of you did.
Dick’s simple, yet sophisticated phrase, encapsulated what Munger also understood about the investor’s mind. The psychology of the investor is loaded with fear, doubts, concerns, greed, and envy. It can be paralyzed by inertia and hypnotized by hope. As Dick often reminds us, “Hope is not a strategy.” And the “perfect” time seldom comes. “Free coffee tomorrow,” the sign reads.
In my conversations with Dick over a cup of joe, he tells me “Survival Guy, long-term investment success is about temperament.” Investors don’t realize their temperament until the storm hits, they’re seasick and will do crazy things to make it stop.
Which leads me to the investing habits of the fairly wealthy: #1 Y-O-U. You are your greatest advocate. You are the reason we’re here today. You are going to make your dreams come true. But you may need help. A coach, so to speak, who understands who you are. An expert who can help you beat inertia with a plan. As Munger said: “Knowing what you don’t know is more useful than being brilliant.”
Action Line: I believe in Y-O-U. Let’s talk.
Read about all of the Top 10 Investing Habits of the Fairly Wealthy here.
Read Munger’s “The Psychology of Human Misjudgment” here.
Originally posted on Your Survival Guy.
