Charlie Munger

Charlie Munger is best known as the Vice Chairman and Warren Buffett's second in command, at Berkshire Hathaway. He is also the CEO of Wesco Financial.

Expanded Definition

Munger, a graduate of Harvard Law School, was practicing law in Omaha, Nebraska when he met Warren Buffett, who would eventually convince him to change careers. A master of the craft of value investing, Munger is known for his breadth of knowledge inside and outside the scope of investing, sharp wit, and a high quotability factor. Buffett frequently credits Munger for expanding his investing horizons by convincing Buffett to shift his focus from a pure deep value, Benjamin Graham-style approach to one focused on investing in undervalued businesses with economic moats.

Foolish Take

One of Tom Gardner's favorite Munger principles is the notion -- first popularly advanced by 19th century mathematician Carl Jacoby -- that to get closer to the right answer, scholars should "invert, always invert." For Munger as an investor, this means stacking up all the reasons you like a stock. But then, before considering purchase, invert -- list all of the reasons to dislike that same stock. Munger believes this more scientific approach will force you to see things as they really are.

Related Fool Articles

• Charlie Munger's Thoughts on Just About Everything
• Munger Goes Mental
• Charlie Munger's Advice for Striking it Rich
• Always Invert: Wisdom from Charlie Munger
• Berkshire 2010: Goldman, Tattoos, and Sissies

Related Terms

• Multidisciplinary mental models
• Wesco Financial
• Berkshire Hathaway
• Warren Buffett
• Value investing
• Economic moat

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