Charlie Munger: Portfolio Diversification

Discussion in 'Share Investing Strategies, Theories & Education' started by oracle, 25th Mar, 2019.

Join Australia's most dynamic and respected property investment community
  1. oracle

    oracle Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    779
    Location:
    Canberra


    Always interesting to hear Charlie.

    Something I have heard few times now which was also mentioned in the video is to lower future expected returns. To me it seems sensible to lower return expectation. I would be happy if I can get 7% nominal returns over long time with inflation around 2.5%

    Regarding diversification. I am sticking with diversification since I do not have any edge and know my limitations when it comes to emotions and temperament.

    Cheers,
    Oracle.
     
    thydzik, lamecrocs, Anne11 and 2 others like this.
  2. lamecrocs

    lamecrocs Well-Known Member

    Joined:
    8th Jan, 2017
    Posts:
    156
    Location:
    Sydney
    Well, since you're now learning so much (preparing yourself). would it be fair to say that one day... when the few GREAT opportunities pop up, you would hit on them like Munger? so essentially, owning few great stocks rather than owning a heap of stocks or ETF/LIC?
     
  3. Redwing

    Redwing Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    3,005
    Location:
    WA
    Warren Buffett says he can't beat the S&P 500 - CNN

    The world's most well-known investor says it's hard for him to do better than the broader market. So should you even try?

    Warren Buffett told CNBC on Monday that he's had a "tough time" trying to beat the S&P 500. The Oracle of Omaha, who just released his annual Berkshire Hathaway (BRKB) shareholder letter, suggested that the index is still the best way to invest in the stock market for most people. He even joked that most of the time he doesn't know how to pick individual stocks.
    Buffett told the network that his two investing gurus, Ted Weschler and Todd Combs, have each underperformed the S&P 500 during the past few years by a "tiny bit." Even so, he added that their stock picks have done better than his.

    Continues.....
     
    sharon and oracle like this.
  4. oracle

    oracle Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    779
    Location:
    Canberra
    I don't think so. Stock picking is hard work and requires lot of patience and right temperament without any certainty on beating the index.

    On the other hand indexing is so much simpler and easier and guaranteed to get descent return.

    Cheers,
    Oracle.
     
    The Falcon likes this.
  5. Fargo

    Fargo Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    736
    Location:
    Vic
    Nah not hard at all just read Joe Magyers News letters, glance at the Fin Review, and a little common sense though it is not very common.
     
  6. oracle

    oracle Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    779
    Location:
    Canberra
    Let's talk in 20 years time.

    Based on above everyone should be beating the market.It's so easy...

    Poor Joe Magyers needs to run a fund to earn fees to build wealth. Apparently, knowing how to beat the market is not enough to build wealth. If I knew how to beat the market consistently over long periods of time why would I ever want the hassle of managing other peoples money and dealing with those investors?

    Good luck with your investing. I am very happy with my average market returns.

    Cheers,
    Oracle.
     
    Last edited: 7th May, 2019
    kierank, number 5, Snowball and 5 others like this.
  7. SatayKing

    SatayKing Well-Known Member

    Joined:
    20th Sep, 2017
    Posts:
    2,794
    Location:
    It's all about ME!
    Altruism? Something to do to fill in the day? Pay for children's school fees, violin and ballet lessons or gap year in exotic places?
     
  8. Redwing

    Redwing Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    3,005
    Location:
    WA
    Had to see who he was :D

    Joe Magyer
     
  9. Redwing

    Redwing Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    3,005
    Location:
    WA