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Charlie Munger on Warren Buffett's Investing Philosophy & Big Gains | Collection: Charlie Munger #317



[Transcript]

CHARLIE MUNGER: Well, he was an old Graham-Newman follower, and he made a lot of money buying thinly traded securities, who were incredibly cheap statistically. And with small amounts of money, which is what he’s working with, he can find enough of those to earn pretty high returns on capital year after year, after year.


Now occasionally, the market would give him a big security to buy instead of an obscure – and the first one I remember of that kind was American Express, when the salad oil swindle pretty well clobbered that stock for a while. Warren went around, did a lot of research, and decided that it was a minor blip. The market was wrong and he was right. So he bought a big A-rated security and made a lot of money. But mostly, he was buying more obscure securities that were incredibly cheap.


Why Warren Buffett Choose To Work In Omaha?

Well, he always said it was less distracting to be there among all the rumors and action on, in Manhattan. And I would say he was making most of his money in a very solitary fashion, just by sifting a lot of data and thinking a lot. And he could do that as well in Omaha, as he could in Wall Street, in fact better.


 

[YAPSS Takeaway]


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