Don't Do It THIS YEAR | Charlie Munger Warns Investors

다듬은 글

※ 자동 자막 원문(다듬기 전)

01. now who doesn't know Charlie Munger he is without a doubt one of the most respected names in the value investing world at 99 years old he still acts as Vice chairman of famed holding company Berkshire Hathaway and Charlie Munger is Warren Buffett's right-hand man for decades he's also a very successful investor in his own right with a net worth of 2.3 billion dollars and a huge part of his investing success has been down to his rational thinking and his ability to tell it like it is and to our benefit that's something that he's done quite a bit over the past few years so with the stock market falling 20 in 2022 inflation's still really high and interest rates set to continue Rising this year let's take a look at Charlie munger's advice that specifically applies to the investing scenario we all face in the year ahead so probably the most obvious investing challenge we face this year is the fact that it looks like we're going to be investing in a down Market as the S P 500 fell 20 in 2022 due to interest rates being hiked up to four and a half percent now this year it does seem as though interest rates will continue to rise due to the FED reaffirming to meet their target of getting inflation back down to two percent now the first question is should we even be investing right now is it worth considering there might still be tougher times ahead so what is Charlie's approach now Charlie says that economy C booms and downs and you have to live your life through both episodes so you just keep swimming and sometimes the tide is with us and sometimes against but we keep swimming either way so sometimes the economy is working for you and sometimes it's just against you but hey if you are a long-term investor you must not really care if prices go down a lot in the short term now such times must be used and seen as long-term opportunities timing the market is actually not a good idea so if you're invested right now you know your one year return might be questionable but what's your 10-year return going to be Charlie has been saying this stuff consistently for a very long period of time even in an interview of 2008 he shared that he is never worried about the decline in Market as he and Buffett have seen their Holdings in Berkshire go down Thrice from Top tick to bottom tick by 50 percent he says that it's the nature of long-term shareholding with the normal vicissitudes and worldly outcomes and in markets the long-term holder has is coded value of his stock go down by say 50 percent in fact you can argue that if you're not willing to react with Equanimity to a Marketplace decline of fifty percent two or three times a century you're not it to be a common shareholder and you deserve the mediocre result you're going to get there's this straightforward advice of Charlie that has earned him a well-deserving respect for right in Market think about that if you're not willing to react with Equanimity or composure when you see the decline of your Holdings by about 50 of the market you're not fit to be a common shareholder and you deserve to cop bad returns and that's because proper value investing is all about finding good businesses and holding them for a very long period that's the truth behind how most stock market fortunes are made there is no waiting for the best times there is no speculation there's just buying high quality companies staying invested through them through the good times and the bad times and then using those bad times specifically as long-term opportunities to buy but of course being able to do that takes an unbelievable amount of emotional intelligence and you really have to train yourself to get to the point where you genuinely feel indifferent whether the stock market is booming or crashing now the best tips to help with that are firstly to really understand your own strategy so know what it is that you're trying to achieve have a clear goal in your mind and what you need to do to get there and then on top of that you really have to understand the businesses that you've bought and if you can actually commit to a long-term strategy and you understand what you own Charlie said about this odd kind of indifference to the market conditions that treat success and failure just the same you just roll with it sometimes it's going for you and sometimes against you it's all part of the same game just roll with it make smart long-term decisions and take advantage of Market drops and you'll be all right so next time if someone tries to convince you to run away from the stock market or maybe to invest in some fancy new cryptocurrency or to focus on the next 12 months because that's where you're going to make Bank just remember what he said now investment is more about getting more value than you pay for and it's never going to be Obsolete and that's how you're going to be more successful now you can get a whole body of people that don't even know what they're buying value investing can never die we think long term we find high quality businesses and we buy them in moments like what we're seeing right now the rare occasions where the stock market is down a fair chunk but okay let's get a little bit more specific because if we look at our current situation we've got Rising interest rates which are going to make stocks suffer probably again this year and on top of that we've also got persistent inflation to deal with so what's Charlie's specific advice to applying value investing principles in a situation like this how will this all play out and what's the best advice for individual investors to optimally deal with the negative impact of inflation other than owning quality equities now Charlie says that you don't need damn diversification you're lucky if you've got four good assets though the finance professors sell the idea that perfect diversification is professional investment now very few people have enough brains to get 20 good Investments you know sometimes the market is full and sometimes it is against and it may be that you need to do the least bad option while inflation is roaring and rates are rising well that's a tough position for any investor chances are you won't be making 2021 style returns this year with rates of four and a half percent and going up but as Charlie says the lesson from the mongers is just to buy good assets and just stick with them now you don't always need to be chasing you know 20 annual returns every single year that will drive you absolutely insane and remember most of value investing is literally just sitting back and waiting as Charlie and Warren say if you have one or two opportunities a year that's plenty and usually it's the people that overly complicate things by trying to get in on every single deal they're the people that eventually run themselves into a mess so with that said what type of businesses should we actually be keeping our eye on through tough times like this well this is how Charlie sees it He codes that Warren says that at times you have to choose good person or good business and you know this is not politically correct we like businesses that stand a lot of mismanagement and it has a way of staying tough he says it's the reputation of the business that remains if they start tough they stay tough that's probably the number one thing to take away from investing in this kind of environment or really in any kind of environment you want tough businesses you know ones that are very robust they can handle the tough times and still be okay it can handle bad management and still be okay now what does that actually mean well it means firstly that you know the business has an intrinsic durable competitive Advantage it means that it isn't overly reliant on debt hasn't swamped itself with loans that could topple the business it means that the business model works and the company generates healthy profits in any conditions and finally it means also that it's simple as Charlie said you want a business that an idiot could run and it would still be okay because chances are if you're a really long-term share holder at some stage an idiot will run that company but if it's a robust business then it should be able to handle a little bit of mismanagement and that's really important so overall guys they are Charlie monger's tips for investing in 2023 no doubt it will be quite a challenging period but if you can remain emotionally indifferent to the market conditions if you can invest with a long-term mindset if you can be patient for opportunities if you can keep it simple then you've got a pretty good framework to come out ahead in 10 years time so with that said that's it for today if you enjoyed this video don't forget to like And subscribe thank you for watching and I'll see you guys soon