2. Construct your board with folks you admire.
Davis recalled Munger’s ideas on selecting administrators, saying, “These persons are the face of your purchasers — and maintaining folks in entrance of you that you just don’t wish to disappoint will at all times make you behave higher.”
3. Earn folks’s belief.
Munger suggested dwelling life “in an online of deserved belief,” Davis recalled.
“He stated that the character of belief, of behaving in a sure method, it makes different folks higher as nicely,” and suggested treating folks in a method that they’re given “a repute to stay as much as,” Davis stated.
4. Be affected person.
Munger “talked about how troublesome it’s to do nothing … And he stated, it’s usually not that making an excellent choice is uncommon and beneficial, however then sticking with it, not getting shaken out, letting it unfold over a really lengthy time frame,” Davis stated.
“So Charlie was very snug doing nothing for lengthy intervals of time, and infrequently within the funding trade, professionals are uncomfortable with that, as a result of it appears to be like like they’re doing nothing.
“However Charlie and I used to admire the person who constructed the Suez Canal, the architect named Ferdinand de Lesseps. And he had a quote that Charlie and I each favored … Persistence generally requires extra energy of character than does motion. And for buyers, endurance is type of the elemental pillar.”
5. Continue learning.
Munger believed in “fixed studying,” Davis stated.
“And a subset of fixed studying is unlearning issues over time. In different phrases, the extra one thing has labored, the extra you imagine it — and infrequently within the nature of investing, the tougher it turns into to alter your thoughts.
“And but, details and circumstances change over time. And you must be not simply good at bringing in new concepts, you must be good at discarding previous concepts that now not work.
6. Interact in ‘fixed self-criticism.’
By this, Davis stated, Munger referred to “the humility to continually be asking your self, ‘What if I’m improper? What do I actually know? What is admittedly my edge on this? What do I perceive that others don’t?’
“And once more, that’s not a talent set that comes simply — fixed self-criticism — due to course, it may possibly result in issues like self-doubt and self-loathing. So there’s a effective line between conviction and self-criticism. And that line Charlie believed was completely important for achievement over time as an investor.”
Pictured: Charlie Munger; Credit score: Bloomberg