Have money to invest? I’d follow Charlie Munger’s top tips to get rich


first_img See all posts by Paul Summers I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Have money to invest? I’d follow Charlie Munger’s top tips to get rich Image source: Getty Images. Charlie Munger might not get quite as much attention as his business partner Warren Buffett. But the 96-year-old billionaire has given his fair share of brilliant advice to investors over his career. Here’s a selection of tips I think those beginning their stock market journey should take on board. Don’t sweat the numbers (too much)As a private investor up against paid professionals, it’s easy to assume you must perform a huge array of financial calculations to match their performance. Munger thinks otherwise. In his view, “people calculate too much and think too little.“5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…For Munger, finding a great business is as much about looking at it from a qualitative perspective as it is about the numbers. Why might the company rise above the competition? What’s the CEO’s plan to grow the company over the next five years? What are its biggest threats?Taking a holistic approach will allow you to see things ratio-obsessed analysts might miss. Dump the rubbishSuccessful investing takes time and energy. We’ve finite amounts of both. Knowing this, Munger advocates being ruthless when looking for opportunities. “We have three baskets for investing: yes, no, and too tough to understand,” he’s said.Linking in with Buffett’s idea of finding your circle of competence and staying there, Munger is quick to disregard weak businesses, or those whose models are overly complex.On an anecdotal note, this is why I tend to give banking stocks a wide berth. For me, the potential profits aren’t worth the hassle of wadding through convoluted financial statements. Put, say, a video game developer in front of me, however, and I’m more interested. Here, the business model and financial statements are relatively easy to comprehend.Many of the UK’s best fund managers use a similar strategy to Munger. Despite the many thousands of stocks available to him, Terry Smith says his investable universe is restricted to around 80 stocks. Even then, only 30 or so make it into the highly successful Fundsmith Equity Fund. Buy the best, discard the rest.Be patientOne of the key tenets of Munger’s philosophy is only investing in things you can commit to for the long term. For him, “the big money is not in the buying and the selling, but in the waiting.“Unfortunately, this is easier said than done. Thanks to online share-dealing, we’re able to pick up and jettison stocks on a whim, sometimes paying no commission. Add in a significant global event like the coronavirus pandemic and looking beyond the next few months is even tougher.Learn to master your desire for immediate results and reap the rewards later down the line.Question everything It’s remarkably easy to fall in love with a stock, especially when it’s one that’s already making you money. Take a look at the excitement surrounding market darling Tesla, for example. Munger, however, suggests investors remain vigilant and continually question their holdings. “You must force yourself to consider opposing arguments. Especially when they challenge your best-loved ideas.”Fail to do as Munger advises and you open yourself up to confirmation bias — only searching for evidence that supports your thesis. There’s nothing wrong with being confident in your stock picks, of course. Just be willing to change your mind — and your portfolio — if the facts change. “This Stock Could Be Like Buying Amazon in 1997” Paul Summers | Monday, 20th July, 2020 Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!center_img Enter Your Email Address Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Paul Summers owns shares in Fundsmith Equity Fund. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Our 6 ‘Best Buys Now’ Shares Simply click below to discover how you can take advantage of this. I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.last_img

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