| [Join YAPSS Membership, For Early Access to New Videos] https://www.youtube.com/channel/UCpzAAXa2cvyEnfc7rurcCcQ/join In this episode, Charlie Munger was asked how did he identify his circle of competence? In this episode, you’ll learn: - Why is it important to know your circle of competence? - 2 good reasons for not investing. (https://www.yapss.com/post/collection-charlie-munger-68-circle-of-competence) #CharlieMunger #DailyJournalCorporation [Transcript] (Source: https://youtu.be/X1Oi3esiry8) AUDIENCE MEMBER 00:08 Hi Mr.Munger. CHARLIE MUNGER 00:09 Yeah. AUDIENCE MEMBER 00:10 You talked about identifying your circle of competence and trying to expand it. I’m at a point in my life where I'm wondering what my circle of competence is, so I would like to know how you found yours? CHARLIE MUNGER 00:22 I didn't catch that either. AUDIENCE MEMBER 00:26 You talk about your circle of competence and you should stick to it and try to expand it. CHARLIE MUNGER 00:31 Oh yeah, well. It’s a hugely important thing, knowing the edge. It’s hardly a competence if you don’t know the edge of it. You know, if you have a misapprehension regarding your own competency that means you lack competence, you’re going to make terrible mistakes. I think you’ve got to constantly measure what you achieve against other people of achievement, and you have to keep being determinedly rational, and avoiding a lot of self-delusion. But after a lifetime of observing it, I think the tendency to be pretty rational about one’s own competency is largely genetic. I think people like Warren and I were just born this way. Now it took a lot of education. But I think we were born with the right temperament to do what we did. And I have no way of taking you back and rebirthing you. AUDIENCE MEMBER 01:40 Why is there so little health care in Berkshire portfolio. And I mean, isn't there something that – could you comment on that? CHARLIE MUNGER 01:49 I think we don’t understand it well enough and we don’t like a lot that we do understand. Those are two pretty good reasons for not investing. |
Charles Thomas Munger (born January 1, 1924) is an American investor, businessman, former real estate attorney, architectural designer, and philanthropist. He is vice chairman of Berkshire Hathaway, the conglomerate controlled by Warren Buffett; Buffett has described Munger as his partner. Munger served as chairman of Wesco Financial Corporation from 1984 through 2011. He is also chairman of the Daily Journal Corporation, based in Los Angeles, California, and a director of Costco Wholesale Corporation.
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