I just came across a long lost clip of Charlie Munger explaining the three things he would do to generate 50% annual returns investing small amounts of money. This clip looks like it was shot on an iPhone 4 but it is Munger at his absolute best. If you want to build real wealth, you need to see it. There is an old saying that it “takes money to make money”. This saying may be true, but the amount of money you need to get started generating high returns is not as much as many would believe, according to Munger.
Charlie Munger is the Vice President of Berkshire Hathaway and Warren Buffett’s business partner. There are three important principles you need to understand if you want to follow Munger’s advice on generating high returns on small sums of money.
The first principle is “Look in the inefficient markets”. Munger is the Vice Chairman of Berkshire Hathaway. As of the making of this video, Berkshire has a market cap approaching $800 billion. That makes Berkshire the 9th largest company in the world by market cap and the biggest non-tech, US based company in the world.
To most people, Berkshire’s massive size would seem like a huge advantage when it comes to investing, right? Well, actually, that’s not the case. Charlie and Warren have repeatedly said that Berkshire’s size is an impediment to generating high investment returns. Because Berkshire has so much money, Warren and Charlie are forced to only focus on large investment opportunities. The odds of these large investment opportunities being mispriced, or to use an investing term, inefficient, are extremely low.
*Disclaimer: Neither this video, not any content produced on this channel should ever be considered investing advice or official financial advice. All content is made for entertainment and educational purposes.
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I can't believe you explained baseball to the non-us audience. Baseball is more popular outside of the US than it is IN the US… :p
hi thank you very much for this excellent video
i wonder if investing in smaller cap companies could be much more risky than instead put the money on bigger companies
is their a risk correlated with size ? kind regards gino
From where does Charlie bring such knowledge… Real Genius
"All you need are three stocks" but the conventional wisdom is to have a diversified portfolio. You seem to suggest that diversification is not necessary. Then you reveal that the three stocks are diversified in themselves. You can have a diversified portfolio with only one stock if you choose a diversified fund
If I had $560k I would invest $100k in tech & $460k into dividend stock with a proven track record to grow with capital appreciation & dividend increase year over year.
Didn’t his father have connections?
You can gain more money, but you cannot gain more time.
In recent weeks a significant portion of the stock market returns is being driven by a handful of companies that have come to be known as the “Magnificent 7” (AAPL, MSFT, NVDA, GOOGL, AMZN, META, TSLA) Which of these stocks do you consider the 'healthiest' in terms of profit and risk? I have about $360k ready money to invest for my eventual retirement.
remember , Warren Buffett's suggested never investing in a company that you don't know anything about..
In recent weeks a significant portion of the stock market returns is being driven by a handful of companies that have come to be known as the “Magnificent 7” (AAPL, MSFT, NVDA, GOOGL, AMZN, META, TSLA) Which of these stocks do you consider the 'healthiest' in terms of profit and risk? I have about $360k ready money to invest for my eventual retirement.
"A small amount of about 10 million dollars." And rambling instead of answering. Not gonna make it through this video.
Munger and Buffett were rich people to start with. I believe they really have a disdain for day trading, because day trading works, and it it opposes their own own strategies of buying monopolies with branding.
When I realized I wasn’t a turtle like my momma taught me and I had hands not paws and I could place stock orders
The problem is that most investors aren't trained at all, and they wouldn't recognize a fat pitch if it hit them in the noggin. But they'll be all over the ultra-high yield and past-their-prime old warhorses going nowhere fast. It's amazing that investing is the one field of analysis where absolutely diametrically opposing advice – diversify or get ultra-concentrated – can be equally taken as the sagest of words.
It’s during the darkest market moments that the biggest opportunities often emerge. When investor confidence is at rock bottom, the stage is usually set for a rebound. If some have made $180K during this crash, which stocks might be next to break out?
Legendary stuff as always. Hoping my channel grows into something even 1% as impactful someday 💸 Just launched!
The stockmarket trend can turn around very quickly. In fact, the indexes often switch from bear market to a bull market when the news and mood of investors is at its lowest point. I read an article of people grossing profits up to $150k during this current market boom, what are the best stocks to buy now or put on a watchlist?
Excellent
HAHAHA. A "long lost" clip of Munger…shot on an iPhone 4. HAHAHAHA. Damn I'm old.
Very stupid idea for the Investor Center to interrupt the video with these clips to make it more entertaining.
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This is quite educational. It's crucial for newcomers to keep in mind that the financial markets are highly irrational in the short run. You should constantly be ready for the unexpected. That is how chance operates. Because of the inherent risks in the market, I always favor long-term investments.
What she fails too mention is no matter how good a company looks, a stock price only rises if a lot of people are purchasing it. Ex. Hedge funds and a massive amount of retail investors. That’s why you see a lot of what seems to be over valued stocks roaring up up and up. Her advice would work in the old days long ago but not so much now. You will get small returns or stay flat or lose cause investors will sell out and go for the mover stocks.
MicroCap stocks – is a pure speculation with non-professional management, non-transparent reporting, no analyst coverage and lack of growth. Very bad advice from youtube channel author. Munger didnt advice to buy microcap.
I’ve tried everything, and this market keeps crushing me. 😩 I don’t get how others are pulling in profits while I’m stuck watching my portfolio drain. Anyone here had luck with a mentor who actually delivers? I need real help, not another course
Small cap companies are a trap. Big investors would short small cap companies very easily. All your hard earned money will be gone.
As an investing enthusiast, I often wonder how top level investors become millionaires off investing. I’ve been sitting on over $345K equity from a property sale, not sure where to go from here, is this a good time to buy into stocks or diversify?