Top Books Recommended by Charlie Munger 2021

If you are reading these lines, you are probably inclined to learn the mindset of one of the many successful investors in the world, like Charlie Munger.

Along with Warren Buffett, Charlie Munger is one of the most significant investment legends today. And like his longtime friend, he generously offers valuable advice to investors.

Top Books Recommended by Charlie Munger 2021
Top Books Recommended by Charlie Munger 2021

To understand his thinking process and invest more, the books he mentioned on the platforms are a good clue for us to learn.

 

Charlie Munger did not create this list directly, it was created by our team based on reviews recommended to read and shared on Charlie Munger’s social media platforms.

Deep Simplicity: Bringing Order to Chaos and Complexity

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  • Random House

Poor Charlie's Almanack: The Wit and Wisdom of Charles T. Munger, Expanded Third Edition

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Part NumberISBN9781578645015_SML
ModelISBN9781578645015
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LanguageEnglish
Number Of Pages548
Publication Date2005T

The Warren Buffett Portfolio: Mastering the Power of the Focus Investment Strategy

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Release Date2009-07-31T00:00:00.000Z
Edition1
LanguageEnglish
Number Of Pages256
Publication Date2009-07-31T00:00:00.000Z
FormatKindle eBook

The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

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  • Harvard Business School Press

Les Schwab Pride in Performance: Keep It Going

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  • Used Book in Good Condition

Ice Age

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Is Adult Product
Release Date2014-12-15T00:08:01.000Z
LanguageEnglish
Number Of Pages123
Publication Date2014-12-15T00:08:01.000Z
FormatKindle eBook

Titan: The Life of John D. Rockefeller, Sr.

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A Universe from Nothing: Why There Is Something Rather than Nothing

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Models of My Life (The MIT Press)

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Part Number9780262691857
ColorBlack
Is Adult Product
Release Date1996-10-08T00:00:01Z
EditionFirst Edition
LanguageEnglish
Number Of Pages464
Publication Date1996-10-08T00:00:01Z

A Matter of Degrees: What Temperature Reveals about the Past and Future of Our Species, Planet, and U niverse

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Release Date2003-07-01T00:00:00.000Z
LanguageEnglish
Number Of Pages318
Publication Date2003-07-01T00:00:00.000Z
FormatKindle eBook

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Deep Simplicity: Bringing Order to Chaos and Complexity

24 new from $17.18
28 used from $8.75
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as of 19 October, 2021 7:21 am

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  • Random House

Poor Charlie's Almanack: The Wit and Wisdom of Charles T. Munger, Expanded Third Edition

13 new from $54.99
21 used from $45.99
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as of 19 October, 2021 7:21 am

Features

Part NumberISBN9781578645015_SML
ModelISBN9781578645015
Edition3rd
LanguageEnglish
Number Of Pages548
Publication Date2005T

The Warren Buffett Portfolio: Mastering the Power of the Focus Investment Strategy

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as of 19 October, 2021 7:21 am

Features

Release Date2009-07-31T00:00:00.000Z
Edition1
LanguageEnglish
Number Of Pages256
Publication Date2009-07-31T00:00:00.000Z
FormatKindle eBook

The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

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  • Harvard Business School Press

Les Schwab Pride in Performance: Keep It Going

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  • Used Book in Good Condition

Ice Age

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Is Adult Product
Release Date2014-12-15T00:08:01.000Z
LanguageEnglish
Number Of Pages123
Publication Date2014-12-15T00:08:01.000Z
FormatKindle eBook

Titan: The Life of John D. Rockefeller, Sr.

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  • (shelf 13.5.1)

A Universe from Nothing: Why There Is Something Rather than Nothing

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  • Atria Books

Models of My Life (The MIT Press)

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Part Number9780262691857
ColorBlack
Is Adult Product
Release Date1996-10-08T00:00:01Z
EditionFirst Edition
LanguageEnglish
Number Of Pages464
Publication Date1996-10-08T00:00:01Z

A Matter of Degrees: What Temperature Reveals about the Past and Future of Our Species, Planet, and U niverse

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Release Date2003-07-01T00:00:00.000Z
LanguageEnglish
Number Of Pages318
Publication Date2003-07-01T00:00:00.000Z
FormatKindle eBook

Living within Limits: Ecology, Economics, and Population Taboos

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Release Date1993-04-22T00:00:00.000Z
LanguageEnglish
Number Of Pages351
Publication Date1993-04-22T00:00:00.000Z
FormatKindle eBook

Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company

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  • Broadway Business

Genome: The Autobiography of a Species in 23 Chapters

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The Autobiography of Benjamin Franklin

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Part Number43178-10785
Is Adult Product
LanguageEnglish
Number Of Pages184
Publication Date2013-09-13T00:00:01Z

How the Scots Invented the Modern World: The True Story of How Western Europe's Poorest Nation Created Our World & Everything in It

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  • Great product!

The Third Chimpanzee: On the Evolution and Future of the Human Animal

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Publication Date2012T

Guns, Germs, and Steel: The Fates of Human Societies

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  • NORTON

Getting to Yes: Negotiating Agreement Without Giving In

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  • Penguin Books

Andrew Carnegie

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Influence: The Psychology of Persuasion, Revised Edition

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Three Scientists and Their Gods: Looking for Meaning in an Age of Information

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  • ships from california!!

The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor

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Part Number9780393318883
ColorMulticolor
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Release Date1999-05-17T00:00:01Z
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LanguageEnglish
Number Of Pages658
Publication Date1999-05-17T00:00:01Z

The Selfish Gene: 40th Anniversary Edition (Oxford Landmark Science)

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Einstein: His Life and Universe

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  • By the author of the acclaimed bestsellers Benjamin Franklin and Steve Jobs, this is the definitive biography of Albert Einstein.

The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (Little Books, Big Profits)

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Part Number9781119404507
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Release Date2017-10-16T00:00:01Z
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LanguageEnglish
Number Of Pages304
Publication Date2017-10-16T00:00:01Z
FormatIllustrated

Faraday, Maxwell, and the Electromagnetic Field: How Two Men Revolutionized Physics

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Release Date2019-06-26T00:00:00.000Z
EditionReprint
LanguageEnglish
Number Of Pages330
Publication Date2014-03-11T00:00:00.000Z
FormatKindle eBook

Outliers: The Story of Success

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Benjamin Franklin, Volume 1

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Yes!: 50 Scientifically Proven Ways to Be Persuasive

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The Blind Watchmaker: Why the Evidence of Evolution Reveals a Universe without Design

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Release Date2015-09-21T00:00:00.000Z
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LanguageEnglish
Number Of Pages491
Publication Date2015-09-28T00:00:00.000Z
FormatKindle eBook

Don’t get caught up in the madness of the market

During The Daily Journal’s shareholder meeting in March 2021, one person questioned how investors could deal with market frenzy, such as the rapid rise of meme stocks.

Munger replied: “Capitalism has periods like that. I’ve lived a long life, and my policy has always been to stay in the markets and deal with them. And I think that’s what you should do.”

Behavior that Munger advises investors to avoid: “What a lot of investors do is rush to buy stocks in a rush – often with borrowed money – because they see that prices are going up. Of course, this is a hazardous investment.” He likens this behavior to gambling.

Sam Huszczo, the founder of SGH Wealth Management, commented that Munger’s comparison holds: “Every investment you own should have a purpose. If you can’t come up with a reason why you’re spending that money, then you’re taking a gambling-like approach to invest. You’re just hoping you’ll get lucky.”

Lately, meme stock investors have been in luck. However, Christine Benz, personal finance director at Morningstar, warns: “As we all know, history and past performance are not necessarily indicators of the future.”

The best way to ignore the madness of the crowd is to stick with your plan; she points out.

Be careful with bubbles.

Some shareholders asked Munger if the market was overheated. They likened the rush of investors buying and selling shares of newly listed companies to the dot-com bubble of the late 1990s.

Munger agrees that “this kind of crazy speculation” is “a sign of an obnoxious bubble.”

When Munger was asked if the situation would end badly, he replied: “I think it’s bound to end badly, but I don’t know when.”

The S&P 500 fell nearly 50% when the dot-com bubble burst in March 2000 and peaked almost 57% from 2007 to 2009 after the housing market crashed, according to Acorns.

But investors should not panic and sell out stocks. Instead, stay in the market and diversify.

The director of Benz encourages investors to hold a portfolio of mutual fund certificates or ETFs and stocks that will fluctuate differently depending on market conditions.

“The basic rule is as follows: 5 to 10% of a portfolio is the right weighting for individual stocks. The rest should be allocated to more diversified investments.”

Owning stocks, you understand

Another big believer in the diversification approach to investing through index funds is Warren Buffett. The Chairman of Berkshire Hathaway often urged the retail investor to “buy a cross-section of America” ​​in the form of a fund that simulates the S&P 500 index.

Munger might agree with this advice when it comes to the average investor. But when it comes to professionals, he finds it pointless to disperse investments:

“A lot of people think owning 100 stocks means they invest in a more professional way than people with 4 or 5 stocks. I consider this madness, complete madness.”

“I’m much more comfortable owning two or three stocks that I know a little about, in an area where I think I have an edge,” Munger continued.

So should you break up with an index fund and go all-in on a few stocks? Probably not, unless you’ve built a multi-billion dollar fortune in the stock market.

“If you are Warren Buffett or Charlie Munger, a focused investment strategy makes sense. But if you’re learning about the market, don’t.”

Research by S&P Dow Jones Indices shows that passive investing is a direct route to success for many people.

Most young people know Warren Buffett, but few people know that most of his successful investments in the past 40 years have the shadow of Charlie Munger.

This 96-year-old billionaire has shared a lot of helpful advice with investors.

Here are the most valuable tips that GoValue believes that those new to the stock market should pay attention to…

Don’t just focus on numbers.

According to Charlie, if an individual investor is too focused on numbers, he is like a student trying to do an expert’s job.

You’re just trying to project a sequence of numbers so that they match accurate past results and appear “reasonable” to the future.

The company’s CFO – CFO is more than capable of drawing dream numbers; business results have grown steadily over the years.

If you only use them for projection, you will fall into a trap right away.

Charlie says:

People are calculating too much and thinking too little

In his view, learning about a business will include both qualitative and quantitative elements.

It would be foolish if you only looked at financial metrics like revenue growth and profit margins to calculate and forecast the future.

Instead, you should ask questions like: Why does the company outperform its peers? Does the CEO have any plans for the next five-year growth mission? What is the most significant risk of the business?

Only after understanding the business will the numbers you project make sense, and then you will also be more confident in holding the stock.

Get the confusing stocks out of your head.

Investing is a job that takes a lot of time and health; Charlie always tries to avoid spending too much time on confusing stocks.

“When looking for investment opportunities, I always divide them into three baskets of stocks: Yes, no, or very hard to understand,” he said.

If you think about Warren Buffett’s “circle of competence”, you will see a lot of similarities between the two.

Like Charlie, Warren advises us to stay within our circle of competence, ignoring other investment opportunities if we don’t understand them.

And this is also the reason why I ignore Real Estate businesses with complicated models or those with export revenue such as textiles, seafood, etc.

It’s not that those stocks don’t have a chance to grow, but because their output markets are located far away in Europe and America. Indeed, they are too difficult to project.

Keep calm

One of the points that Charlie Munger emphasizes is to calmly wait for opportunities and invest only in the things you are most confident in.

For him, under normal conditions:

“Most of the money cannot be traded continuously, but to wait.”

That means he spends most of his time “hunting” instead of buying and selling a few shares over and over again.

Instead of calmly waiting for negative news to come to the business, the faint-hearted will sell out and won’t you have the opportunity to own a good stock at a bargain price?

Stay calm; the opportunity will come to you.

Always ask questions

Admittedly, we’ve always tended to love stocks too much, especially when they make you profitable.

However, Munger advises investors to exercise caution and constantly question their investments:

You must always be wary of threats from competitors, especially when it’s the business you love the most

There is nothing wrong if you are always confident about the success of your business, but that confidence must have a substantial investment thesis.

Don’t be afraid to admit mistakes if your business isn’t on track or a competitor is kicking your favourite business out of the way.

I hope you two stay healthy so that we can continue to receive more investment lessons and indeed the next generations will have to mention them a lot.