How could economics not be behavioral? If it isn't behavioral, what the hell is it?
Charlie MungerRead
You're looking for a mispriced gamble. That's what investing is. And you have to know enough to know whether the gamble is mispriced. That's value investing.
Interpretation
What this quote means
Investing involves recognizing opportunities where the value is underestimated, and it requires knowledge to identify these opportunities.
The quote by Charlie Munger encapsulates the essence of value investing, which focuses on finding investments that are priced below their intrinsic value. It highlights that successful investing is not merely luck; rather, it is a calculated gamble that demands a deep understanding of the market and the companies involved to distinguish genuine opportunities from misleading ones.
Themes
InvestingValueGambleKnowledgeOpportunity
In practice
Example use cases
In a discussion about stock market strategies, one could use this quote to emphasize the importance of thorough research.
More from Charlie Munger
All quotes βThe world of derivatives is full of holes that very few people are really aware of. It's like hydrogen and oxygen sitting on the corner waiting for a little flame.
Charlie MungerRead
I believe in the discipline of mastering the best that other people have ever figured out. I don't believe in just sitting down and trying to dream it all up yourself. Nobody's that smart.
Charlie MungerRead
Economics is in many respects the queen of the soft sciences. It's expected to be better than the rest. It's my view that economics is better at the multi-disciplinary stuff than the rest of the soft science. And it's also my view that it's still lousy.
Charlie MungerRead
Look at this generation, with all of its electronic devices and multitasking. I will confidently predict less success than Warren, who just focused on reading.
Charlie MungerRead
Economics profession, they've been - they've been confident in various formulas, but economics is not physics. The same formula that works in one decade doesn't work in the next. Economics is a difficult subject.
Charlie MungerRead
Similar quotes
There's a company behind every stock and a reason companies - and their stocks - perform the way they do.
Peter LynchRead
Investing is a virtuous habit best started as early as possible.
John C. BogleRead
Observation over many years has taught us that the chief losses to investors come from the purchase of low-quality securities at times of good business conditions. The purchasers view the good current earnings as equivalent to 'earning power' and assume that prosperity is equivalent to safety.
Benjamin GrahamRead
My favorite time frame for holding a stock is forever.
Warren BuffettRead
Value investing is risk aversion.
Seth KlarmanRead
Time is on your side when you own shares of superior companies.
Peter LynchRead