Charlie Munger

Charlie Munger: That Decision Has Cost Me Now About $5 Billion

Here’s a great recent interview with Charlie Munger & Li Lui in which Munger recalls one of his greatest investment mistakes that cost him $5 Billion. Here’s his recollection:

Q3 hedge fund letters, conference, scoops etc

Charlie Munger

Munger: Let’s take a simple question.

As I said in that book. They offered me three hundred shares in Belridge Oil, which I bought because I had the money on hand. They offered fifteen hundred more at the same price. Now I had to sell something or borrow the money. So I bought the three hundred and not the fifteen hundred.

That decision has cost me now about $5 Billion. I would be $5 Billion richer if I bought the other fifteen hundred. It’s the contrast. It didn’t inconvenience me in any way to buy the three hundred, it inconvenienced me to buy the other fifteen hundred.

Just the extra contrast made my judgement go sour. It was the dumbest goddam decision. One of the dumbest investment decisions I have ever made in my whole life.

The stock was not overpriced cause it was just a little more inconvenient for me to buy it. But the inconvenience was enough to trigger my mind.

Another problem on that was even worse…

The man who dominated the corporation was eccentric and heavy drinking. But the oilfield wasn’t over-drinking.

I had two different psychological reasons so I made the wrong decision.

I thought too much about how much the man was drinking and too little about how good the oilfield was. I thought too much about my inconvenience and too little about the basic situation.

So I screwed up fairly well!.

That should encourage you people. You can blow the major opportunities of your life, but still get through all right.

You can watch the full interview here:

For more articles like this, check out our recent articles here.

Article by The Acquirer’s Multiple


Saved Articles
X
TextTExtLInkTextTExtLInk

The Life and Career of Charlie Munger

Charlie is more than just Warren Buffett’s friend and Berkshire Hathaway’s Vice Chairman – Buffett has actually credited him with redefining how he looks at investing. Now you can learn from Charlie firsthand via this incredible ebook and over a dozen other famous investor studies by signing up below:

  • Learn from the best and forever change your investing perspective
  • One incredible tidbit of knowledge after another in the page-turning masterpiece of a book
  • Discover the secrets to Charlie’s success and how to apply it to your investing
Never Miss A Story!
Subscribe to ValueWalk Newsletter. We respect your privacy.

Congrats! Are you a smart person?

We have an exclusive targeted & limited time offer for being a sophisticated and loyal reader.

ValueWalkPremium is a website and newsletter on the latest industry news much of which is not in the public domain and obtained via our sources.

We also have 10 years of resources on how to use this information to better your investment process.

Sign up for  today and get our exclusive content for 40% off. This is our second biggest discount ever!!

Use coupon code VIP20 or click on the button below

Limited time offer only ENDS 2/29/2019 or after next 25 subscribers take advantage whichever comes first – please do not share this discount with others

 

0