How could economics not be behavioral? If it isn't behavioral, what the hell is it?
Charlie MungerRead
Everyone has the idea of owning good companies. The problem is that they have high prices in relations to assets and earnings, and that takes all of the fun out of the game.
Interpretation
What this quote means
Investors desire to own valuable companies, but high prices often inhibit their ability to do so, making investing less enjoyable.
In this quote, Charlie Munger reflects on the challenge investors face when attempting to acquire quality companies. While many aspire to invest in businesses with solid fundamentals, the high valuations associated with those companies can deter them, as it diminishes the thrill and pleasure of the investment process. Munger suggests that the joy of investing is closely tied to finding worthwhile opportunities at reasonable prices.
Themes
InvestmentCompaniesValuationPriceEarnings
In practice
Example use cases
During an investment seminar discussing market trends.
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.
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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.
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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.
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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
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Time is on your side when you own shares of superior companies.
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