Warren Buffett & Charlie Munger Quotes For Waiting For Stocks To Go On Sale

Warren Buffett & Charlie Munger Quotes For Waiting For Stocks To Go On Sale

In my latest video, I’m reflecting on Buffett and Munger quotes to help self-improve while I wait for wonderful companies’ stocks to go on sale.

All time market highs are somewhat exasperating to me, because even though I should be happy that some of my investments are priced highly and probably overvalued, I’m somewhat irked because there are equities I’d love to buy but they’re not on sale right now.

And the Fear and Greed Index is not helpful because it seems to be currently averaging the extremes of hyped stocks and zombie companies in the market and just chalking it up to meh or neutral.

Based on the rising Buffett indicator (235% Market Cap to GDP) and Shiller PE (38) over the last few years, I have tried to heed Buffett’s warning of “be fearful when others are greedy, and greedy when others are fearful.”

Buffett: “Beware the investment activity that produces applause; the great moves are usually greeted by yawns.” “Price is what you pay. Value is what you get.”

I think of the few securities I might be able to buy in a year, and it takes a certain level of conviction to commit to unpopular and contrarian ideas. And the willingness to ride the wave of wisdom versus hype.

Buffett: “Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.” or “If you aren’t thinking about owning a stock for 10 years, don’t even think about owning it for 10 minutes.” “Our favorite holding period is forever.”

“There seems to be some perverse human characteristic that likes to make easy things difficult.”
Yes, this is like committing double faults in tennis, you know how to serve and it’s so obvious, but sometimes we have mental and emotional lapses that cause us to make unforced errors.

Like, I should have been willing to invest in something like Apple much sooner, but for years I had a bias that it wasn’t up to my standards so I arbitrarily resisted. But in hindsight, I should have recognized it was a wonderful business as I’ve been using an iPhone for the past decade and the same iPod since 2008 or 13 years! I feel like I’m spoiled and expect something way more out of tech because I’m not someone who’s easily impressed by the latest and greatest innovations. I think if it ain’t broke, don’t fix it. But I was unnecessarily handicapping myself.

Buffett recommends the S&P 500 index fund from the 2021 annual meeting, and yet this is conflicting when we think about how he’s also said:
“Diversification is protection against ignorance. It makes little sense if you know what you are doing.”
“Wide diversification is only required when investors do not understand what they are doing.”

Charlie: “I think it’s much easier to find five than it is to find 100. I think the people who argue for all this diversification, by the way, I call it ‘diworsification,’ which I copied from somebody. And I’m way more comfortable owning two or three stocks which I think I know something about and where I think I have an advantage.”

Charlie says: “I constantly see people rise in life who are not the smartest, sometimes not even the most diligent, but they are learning machines. They go to bed every night a little wiser than they were when they got up and boy does that help, particularly when you have a long run ahead of you.”

Buffett said: “We look for three things when we hire people. We look for intelligence, we look for initiative or energy, and we look for integrity. And if they don’t have the latter, the first two will kill you, because if you’re going to get someone without integrity, you want them lazy and dumb.”

Charlie: “What do you want to avoid? Such an easy answer: sloth and unreliability. If you’re unreliable it doesn’t matter what your virtues are. You’re going to crater immediately. Doing what you have faithfully engaged to do should be an automatic part of your conduct. You want to avoid sloth and unreliability.”

I think having integrity, the drive to learn, being reliable are key traits that help people be successful in life.

Charlie: “Confucius said that real knowledge is knowing the extent of one’s ignorance. Aristotle and Socrates said the same thing. The survivors know. … Knowing what you don’t know is more useful than being brilliant.”

Charlie also said “It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.”

I feel like everyday I gain a little bit more in self-awareness and the choices I make become more visceral to me in a positive feedback loop that then improves the actions I might take next time. I try to be like Charlie in that I try to just not be stupid if I don’t have to be.

So often in business we think we need to be constantly active and have meetings all the time, but that isn’t necessarily productive.

Buffett: “I insist on a lot of time being spent, almost every day, to just sit and think. That is very uncommon in American business. I read and think. So I do more reading and thinking, and make less impulse decisions than most people in business.”

I’ve personally found the more I’ve cultivated quiet, reading and learning time, that my work output is then of much higher quality.

I didn’t used to enjoy reading until my mid 20s and then got really into it, like eating salad, which I also wasn’t enthusiastic about until I made a concerted effort to improve myself and my decision-making skills starting in my mid 20s.

Charlie: “Those of us who have been very fortunate have a duty to give back.”

Buffett said to Mohnish Pabrai: “We were not in a hurry to get wealthy; we knew it would happen. He said, Rick Guerin was just as smart as us, but he was in a hurry.”

I used to be in a rush to make money, much like Rick Guerin and then I got burned.

Buffett’s mantra that I’ll keep telling myself for now “The stock market is designed to transfer money from the active to the patient.” or as a riff in a Tool song goes “Gonna wait it out and Be patient.”

“Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1” – Warren Buffett

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