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Investing tips from Warren Buffett and Charles Munger

Start with the A’s and examine all of them

Munger: Dancing in and out of your favorite companies is not a good idea.

Have to make two decisions right, when to buy and when to sell. Also have to pay taxes along the way. Investing is about valuing businesses. Encourage us to look at inefficiently priced businesses. Built snowball on top of a very long hill, start very young and live a long time. Keep expenses low. Find out what you know and don’t know. Think for yourself.

Munger : First struggle is to get to $100,000. Underspend income grossly to get there quicker.

Valuation is an art. Get a strong enough moat so management less of a factor. Standard Deviation doesn’t tell you anything. Better investor if look back at decisions you make and determine if you make the right decision.

Pick out five to ten companies in which you understand their products, get annual reports, get every news piece on it. Ask what do I not know that I need to know. Talk to competitors and employees. Essentially be a reporter, ask questions like: If you had a silver bullet and could put it into a competitor who would it be and why. In the end you want to write the story, XYZ is worth this much becauseā€¦

Munger: The question why is the most important of all.

Source: Berkshire Hathaway Meeting
Time: 1999

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