Charlie Munger on What are the Traits of Good Investors?

Charlie Munger on What are the Traits of Good Investors? | Caltech 2020【C:C.M Ep.113】 by YAPSS

In this episode, Charlie Munger was asked what are the traits of good investors and how should investing be taught at CalTech?”

YAPSS Takeaway: Good investors have; the combination of patience and aggression, a strong self-awareness on things that they know and things that they don’t know, a good knowing on the edge of their own competency and lastly, they have a great sense in probability.

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Video Transcript:…
Full Video:
This speech is given by Charlie Munger at Caltech on 14th December 2020.

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Business Enquiries:

Interview: So for those of us who can’t only rely on that form of growth Zach Rifkin who’s a bachelor of science 2014 in math asked how do you encourage young mentees to take big bets on big edges and how should this be taught at Caltech

Charlie Munger: Well if you ask how could Caltech teach people how to win chess tournaments or poker tournaments you would find that some people at Caltech are very good at that and others aren’t and if you want to win at those things you better bet on the people that are really very good at it and not everybody is I don’t think Caltech can make great investors out of most people, I think great investors to some extent are like great chess players they’re almost born to be investors

Interviewer: And that’s because of the tolerance for risk is it the patience what are the traits?

Charlie Munger: Obviously you have to know a lot but partly it’s temperament partly it’s deferred gratification you’ve got to be willing to wait it’s a weird good investing requires a weird combination of patience and aggression and not many people have it also has to it requires a big amount of self-awareness and how much you know and how much you don’t know you have to know the edge of your own competency and a lot of brilliant people are no good at knowing the edge of their own competency they think they’re way smarter than they are and of course that’s dangerous and causes trouble so I think Caltech would have a hard time teaching everybody to be a great investor

Interviewer: Could it help people discover that they have that temperament or is this something that you mostly should try on your own

Charlie Munger: I think you find out whether you’ve got the qualities to win at poker by playing poker

Interviewer: That’s a very empirical approach Charlie

Charlie Munger: Yes, but I think it’s right so obviously it helps to know the basic math of Fairmath and Pascal but everybody with any sense knows that stuff but having the temperament where Fairmath and Pascal is as much a part of you as your ear and nose that’s a different kind of a person and I think it’s hard to teach that I have found Warren and I have talked about this in the early days and we talked about our way of doing things which is working so well we found some people got it and they instantly converted our way and did very well and some people no matter how carefully we explained it and no matter how successful they were they could never learn what they could never adapt it either got it fast they didn’t get it at all so that’s my experience

This article is solely for informational purposes only and it should not be construed as a solicitation or offer to buy or sell on any financial securities/instruments, etc. nor anyone should take the content as an investment advise, any opinion expressed in this article are subject to change without prior notice, and its author is under no obligation to keep current of the information herein and accepts no liabilities for any gains, losses of any kind arising from any of the material presented on any post/s and/or article/s published.

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April 2021

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