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Kindle Notes & Highlights
by
Tren Griffin
Read between
February 12 - March 2, 2023
ataraxia, or perfect imperturbability. You see it when Socrates goes on trial, when Nathan Hale is hanged, when Buffett invests in Goldman and when Charlie buys Wells Fargo the day before the bottom tick in March 2009.
ataraxia, or perfect imperturbability. You see it when Socrates goes on trial, when Nathan Hale is hanged, when Buffett invests in Goldman and when Charlie buys Wells Fargo the day before the bottom tick in March 2009.
put your ideas in writing. In Buffett’s view, if you cannot write it down, you have not thought it through.
put your ideas in writing. In Buffett’s view, if you cannot write it down, you have not thought it through.
when creating a successful investing process, complexity is not the investor’s friend.
when creating a successful investing process, complexity is not the investor’s friend.
By “tuning out folly” and swatting away unimportant things “so your mind isn’t cluttered with them … you’re better able to pick up a few sensible things to do,” said Munger.
By “tuning out folly” and swatting away unimportant things “so your mind isn’t cluttered with them … you’re better able to pick up a few sensible things to do,” said Munger.
Focus enables both simplicity and clarity of thought,
Focus enables both simplicity and clarity of thought,
Graham value investing is not about showboating or flouting one’s intelligence. Instead, it is about doing things that are not likely to result in a mistake.
Graham value investing is not about showboating or flouting one’s intelligence. Instead, it is about doing things that are not likely to result in a mistake.
Munger strives to find investments for which a significantly positive outcome is obvious. Because this type of investment is identified only rarely, Munger suggests that one be very patient but also very ready to aggressively invest when the time is right.
Munger strives to find investments for which a significantly positive outcome is obvious. Because this type of investment is identified only rarely, Munger suggests that one be very patient but also very ready to aggressively invest when the time is right.
Graham value investors spend most of their time reading and thinking,
Graham value investors spend most of their time reading and thinking,
Graham value investors wait for mispriced assets to appear rather than predict the future in the short term?”
Graham value investors wait for mispriced assets to appear rather than predict the future in the short term?”
A financial planner provides the greatest value for clients simply by helping investors keep their emotional and psychological dysfunctions under control.
A financial planner provides the greatest value for clients simply by helping investors keep their emotional and psychological dysfunctions under control.
If valuing the business requires understanding how cash flows will change in the future based on factors like rapid technological change, Munger puts that business in the too hard pile
There is a huge difference between what is interesting to learn about and what is useful in making an investment decision.
When speculators spend their time trying to guess what other speculators are trying to guess, the process quickly becomes both circular and absurd.
If you’re an investor, you’re looking on what the asset is going to do; if you’re a speculator, you’re commonly focusing on what the price of the object is going to do, and that’s not our game. —WARREN BUFFETT, OUTSTANDING INVESTOR DIGEST, 1997
Graham value investors price stocks rather than time markets.
If you cannot understand the business, then you cannot determine what you did wrong. If you cannot determine what you did wrong, then you cannot learn. If you cannot learn, you will not know what you’re doing, which is the real cause of risk.
simple rules of thumb called heuristics, which enable them to efficiently make decisions.
Investors operate within what is for the most part a zero-sum game. While it’s true that the value of all companies usually increases over time with economic growth, market outperformance by one investor is necessarily offset by another’s underperformance. —SETH KLARMAN, BAUPOST GROUP LETTER, 2005
Munger likes to say that a year in which you do not change your mind on some big idea that is important to you is a wasted year.
A few major opportunities, clearly recognizable as such, will usually come to one who continuously searches and waits, with a curious mind that loves diagnosis involving multiple variables. And then all that is required is a willingness to bet heavily when the odds are extremely favorable, using resources available as a result of prudence and patience in the past. —CHARLIE MUNGER,
a professor who wrote a scholarly book on gullibility was an investor in the Bernard Madoff Ponzi scheme.
when you buy an asset, it should be the best investment of all the investments that are available to you anywhere.
Do not make decisions while under stress. It’s just that simple.
“When people are uncertain … they don’t look inside themselves for answers—all they see is ambiguity and their own lack of confidence. Instead, they look outside for sources of information that can reduce their uncertainty.
You need to have a passionate interest in why things are happening. That cast of mind, kept over long periods, gradually improves your ability to focus on reality.
have a temperamental advantage that more than compensates for a lack of IQ points.
The best investors are those who have a temperament that is calm and rational.
Most investors think quality, as opposed to price, is the determinant of whether something’s risky. But high quality assets can be risky, and low quality assets can be safe. It’s just a matter of the price paid for them.
—JAMES MONTIER, THE SEVEN IMMUTABLE LAWS OF INVESTING, 2011
You have a limited amount of time and talent and you have to allocate it smartly. —CHARLIE MUNGER, WESCO ANNUAL MEETING, 2011
One competitor is enough to ruin a business running on small margins.
work expands to fill available time,
it’s better to own lots of monopolistic businesses
Intelligent people make decisions based on opportunity costs—in other words, it’s your alternatives that matter. That’s how we make all of our decisions.
Berkshire wants essentially no risk as a starting point.
The way Berkshire deals with risk is by buying what they feel is a conservatively valued asset with no risk at a discount price.
