Collection: Charlie Munger - #218 'I Don't Think I Have a ONE SIZE FIT All Investment'



[Transcript]

BECKY QUICK 00:00

Mickey and Michael Fontenot wrote in, seeking advice for a 22 year old, invest in growth or to get the monthly income from dividends.


They say they have a 22 year old brilliant young neighbor, he’s achieved an internship at Tesla and GE and is currently a student at Purdue. He takes advantage of his neighbor 37 years in the oil field, the neighbor takes advantage of his tech savvy and Reddit and the meme crowd.


His inclination is to advise him to continually slow drip into monthly income and dividend investing as opposed to swinging for the fences in AI and growth stocks. What would you advise, sir?


CHARLIE MUNGER 00:43

Well, I don’t think I have a one size fit all investment.


I think some people are gifted enough that they can invest in hard-to-value difficult things and other people I think would be very wise to have more modest ambitions in terms of what they choose to deal with. So I think you have to figure out your level of skill, or the level of skill your advisor has, and that should enter the equation.


But to everyone who finds the current investment climate hard, and difficult, and somewhat confusing, I would say, “welcome to adult life.” And you're thinking the right way. Of course, it is hard.


It’s going to be way harder for the group that’s graduating from college now. For them to get rich, and stay rich, and so forth is going to be way harder for them than it was for my generation. Think what it cost to own a house in a desirable neighborhood in a city like Los Angeles. It's not a – and I think we’ll probably end up with higher income taxes too, and so on.


No, I think the investment world is plenty hard and I don't think the – In my lifetime, 98 years, it was the ideal time to own a diversified portfolio of common stocks that updated a little by adding the new ones that came in like the Apples and the Alphabets and so forth.


And I’d say people got maybe 10 or 11% if you did that very intelligently before inflation and maybe 8 or 9% after inflation. That was a marvelous return. Now, no other generation in the history of the world ever got returns like that.


And I don’t think the future is going to give the guy graduating from college this year nearly that easy an investment opportunity. I think it’s going to be way harder.


(Source: https://youtu.be/8RxLj9OVqLo)

 

[YAPSS Takeaway]

Find your level of skill and choose investments that best suits you.