Once in a while, I used to watch videos or read articles about charlie munger earlier mostly with an premise that this man, the partner of the great warren buffet was brutally honest and had strong views on the topics that he had touched.
But thanks to @nithin, i’ve been hooked on to charlie munger after reading his top 100 quotes.
I started searching for his works and here’s something which I found interesting and worth sharing:
One of the most fascinating subjects which is studied knowingly or unknowingly by one and all is the subject of Human Psychology. You name anything in life , This is one thing which always comes handy. If you are a salesman, you can be a better salesman if you understand a thing or two about human psychology. And trading is no exception, If you know yourself and others well, The odds that you do well in your investing and trading goes up exponentially.
“The Psychology of Human Misjudgment” which is considered as the magnum opus on why we behave the way we do.
Here’s the full piece. it is fairly long and covers in detail about psychology specifically focusing on various facets of human misjudgment.
We can maybe share some interesting views from this piece and have a discussion in context with errors we make in markets.
Sorry for having a contra view on this topic. As a RETAIL trader and a RETAIL investor, I don’t really find any useful investment ideas/strategies other than their lifestyle hacks like living frugally from Charlie/Warren.
Charlie/Warren are great fund managers with a lot of capital, influence (i.e info that other retailers may never have access to) and have earned a lot of their wealth at a time when the PE was very low. Also, they have a very systemic way of valuing a company and make investments (both private equity/public shareholding).
Could they have created the same amount of wealth/success if they had to start their investing journey now? I seldom think they can repeat the success in these market situations.
Does psychology help in trading? yes but not to the extend it’s been explained on the book. Sorry I’m not a big fan of Charlie.
