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How Berkshire Hathaway Survived The Financial Crisis

Charlie Munger's thoughts on trying not to be stupid

How the world's most prominent investors reacted before, during and after the financial crisis, should, I believe, form part of ever investors' education. Over these few years, huge fortunes were made and lost, people who looked very clever, suddenly looked very stupid, and people who previously looked stupid suddenly looked very intelligent. Then in the years after, people who looked momentarily very intelligent ended up fading into mediocrity. The crisis even wrongfooted some of the most intelligent, experienced minds on Wall Street. If you’re looking for value stocks, and exclusive access to value-focused hedge fund managers, check out ValueWalk’s exclusive value newsletter, Hidden Value Stocks. Two people who came out of the crisis, not only unscathed but with their reputations significantly enhanced, were Warren Buffett and Charlie Munger. These two billionaires managed to steer Berkshire Hathaway through the crisis successfully and come out the other side bigger than it had ever been before. In January 2010, Charlie Munger gave a talk at the Harvard-Westlake preparatory school about the financial crisis, and why, Berkshire was able to succeed where so many others have failed. The full talk was published in Santangel's Review. Below are some key takeaways; Munger's advice on how to succeed when others are struggling. Berkshire Hathaway and the financial crisis "I think part of the popularity of Berkshire Hathaway is that we look like people who have found a trick. It’s not brilliance. It’s just avoiding stupidity. You say it is the same thing just stated differently -- well, maybe it is the same thing just stated differently. But you understand it better if you go at it the way we do, which is to identify the main stupidities that do bright people in and then organize your patterns for thinking and developments, so you don’t stumble into those stupidities....
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Rupert Hargreaves

Sign up now and get our in-depth FREE e-books on famous investors like Klarman, Dalio, Schloss, Munger Rupert is a committed value investor and regularly writes and invests following the principles set out by Benjamin Graham. Prior to his investing and writing career, Rupert began his career as a proprietary currency trader.Rupert holds qualifications from the Chartered Institute For Securities & Investment and the CFA Society of the UK.Rupert covers everything value investing for ValueWalk

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