The Munger Way

Howard Marks publishes his memos regularly and they contain useful insights into day to day life to investment decision making. They are a must read in the value investor community. His memos warned about dangers of the dot com bubble and the housing bubble before they were happening. So even legendary investor Warren Buffett admitted he immediately reads Howards memo when it is out. Howard Marks: You Bet! Howards latest memo is about uncertainty: You Bet! Annie Dukes Book: Thinking in Bets (I already ordered it) #1 Learn by playing Howard laid the foundation of his investment career when he was a child and early adulthood. He enjoyed playing games like "War" and "Old Maid" and later Bridge, Poker and Blackjack. Now he plays Backgammon and Gin. #2 Think in Bets A bet is a decision about an uncertain future. A winning or losing outcome is the sum of the quality of a decision and luck. Thus a wise decision does not grantee a successful outcome and...

Summary Knowledge is money's made in the mind. It's made with what you see and what other people don't see. - Ken McElroy Look for macro economic factors . Where is work and economic development? Where are the people going to move to? Wayne Gretzky says "you want to go to where the pucks are going". These people create demand for real estate and rentals. Location, location, location and the math : Net Operating Income = Rental Income - Expenses. Charlie Munger recommends to know the location very well, so that you are not victim of a snake oil realtor - yet you do not need to know many locations to get very rich. Real estate investing is timing the market . You buy low and sell high. Yet you have to be educated, prepared, got dept and equity together and property management setup. Right now, there are still deals , but you need to work a lot harder to find and be more experienced to know what to look for. Realtors are working for tips. When there i...

Summary Daily Journal is moving its core business to become a technology company - Daily Journal Technologies . Its software is automating and supporting legal processes for courts. Charlies remarks are that the business is more like building Price Waterhouse Coopers than other Software companies (FANGs). Software for legal processes are consulting heavy, thus costs more time and effort to grow the business. The Daily Journal newspaper business is going to die. Only a few very large newspaper do survive (WSJ, NYT, FT). Thus the shift of DJ to technologies. Index and Quant Investing gives active managed funds a hard time. In future Charlie sees that fewer and better portfolio managers will survive - yet a whole lot average portfolio managers will not. Transcript the meeting should now come to order I'll give you some time to sit down welcome to the Catholic cathedral this is the most amazing place oh you haven't ever seen it should go look at it from the i...