Charlie explains how he applied this trick as a meteorologist, but this mental framework works all the same when investing. While it’s essential to ask why a stock will do well in the future, it is just as important to ask why a stock would go down because, after all, the goal is not to lose money.

Inverting the problems you have to solve 

In investing, you don’t have to know a little about a lot of things, you just need to know a few things very well. Then, you should know your limit of competency, to realize when you’re drifting into areas you don’t know particularly well. Also, don’t be afraid to dive even deeper into your areas of expertise.

Humility (knowing what you don't know)

Staying focused on the long term and not having a knee-jerk reaction to market swings is essential to gaining from the stock market. Even when his portfolio went down in value by 50% (three times) he was not worried. Panicking means losing, so staying composed is essential.

Stay rational (don't be swayed by short-term volatility)

“If it won’t stand a bit of mismanagement, it’s not a good business”, a friend of Munger said. It is good to invest in good people behind good ideas, but it is very important that the business itself is solid and straightforward, and that it has a competitive advantage.

Keep it simple (look for businesses that are simple, solid, and straightforward)

“When you’re reading you can just take it as you want it”. Making self-education and self-improvement a priority will help you out in life.

Read a lot

Charlie Munger (Vice Chairman of Berkshire Hathaway) has always attributed his stock market success to a series of mental models and tricks he learnt at a young age. In this video let’s dive into 5 of the psychological tricks that have helped both him and Warren Buffett achieve such resounding outperformance in the field of stock market investing. New Money Clips: https://www.youtube.com/channel/UC2SsZqmrOaiy-ZAnTjWdw4g f you'd like to try Sharesight, please use my referral link to support the channel! :D https://www.sharesight.com/newmoney/?utm_source=aff-newmoney&utm_medium=affiliates&utm_campaign=aff-newmoney (remember you get 4 months free if you sign up to an annual subscription!) ★ ★ SUPPORT NEW MONEY ON PATREON ★ ★ Check it out here ► https://www.patreon.com/newmoney ★ ★ PROFITFUL ★ ★ Learn to Invest with Brandon van der Kolk (BUNDLE OFFER) ► http://bit.ly/learntoinvestbundle Learn to Master Your Tax Return (SPECIAL OFFER) ► https://bit.ly/3127TdE #charliemunger #stockmarket

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Personal Development

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Money & Investments

Charlie Munger (Vice Chairman of Berkshire Hathaway) has always attributed his stock market success to a series of mental models and tricks he learnt at a young age. In this video let’s dive into 5 of the psychological tricks that have helped both him and Warren Buffett achieve such resounding outperformance in the field of stock market investing.

Full Interview: https://www.youtube.com/watch?v=Rh1WCzfCP24
New Money Clips: https://www.youtube.com/channel/UC2SsZqmrOaiy-ZAnTjWdw4g

If you'd like to try Sharesight, please use my referral link to support the channel! :D
https://www.sharesight.com/newmoney/?utm_source=aff-newmoney&utm_medium=affiliates&utm_campaign=aff-newmoney
(remember you get 4 months free if you sign up to an annual subscription!)

★ ★  SUPPORT NEW MONEY ON PATREON  ★ ★

Check it out here ► https://www.patreon.com/newmoney

★ ★  PROFITFUL  ★ ★

Learn to Invest with Brandon van der Kolk (BUNDLE OFFER) ► http://bit.ly/learntoinvestbundle

Learn to Master Your Tax Return (SPECIAL OFFER) ► https://bit.ly/3127TdE

★ ★  CONTENTS  ★ ★

0:00 Intro
1:08 Invert!
4:24 Know What You Don't Know
7:56 Rational Thinking
10:23 Keep It Simple!
12:23 Read a lot!

#charliemunger #stockmarket

DISCLAIMER:
Neither New Money or Brandon van der Kolk are financial advisers. The information provided in this video is for general information only and should not be taken as professional advice. There are risks involved with stock market investing and consumers should not act upon the content or information found here without first seeking advice from an accountant, financial planner, lawyer or other professional. Consumers should always research companies individually and define a strategy before making decisions. Brandon van der Kolk and New Money are not liable for any loss incurred, arising from the use of, or reliance on, the information provided by this video.

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Charlie Munger: The 5 Investing Tricks That Made Him a Billionaire

New Money Ideas