In one sentence: A rerun of the Munger-quotes episode, so see 317 for the full note; this adds the side argument over whether Buffett stays invested or goes to cash, plus Danielle's plan to reread the Berkshire letters.
Key ideas
- Investing is buying below value. Anything done hoping someone pays more later is speculation, as in 317. [01:00–03:00]
- New in this airing: the letters "intensive". Danielle plans to read the Berkshire letters in order from 1977, about one a day, and publish short notes in her newsletter. She calls reading them all a rite of passage for good investors. [03:00–08:00]
- "Deserve what you want." Munger's line on getting what you want, which Danielle recalls with a spouse version. The two joke about its limits. [08:00–09:00]
- "Take a simple idea and take it seriously." Focus narrowly, then go deep; they link it to The One Thing. [12:00–14:30]
- "The big money is in the waiting." Phil says the waiting is on both sides: for the buy, and while you hold. He sold Chipotle under $500 and it later traded around $1,500. A 2009 class's paper portfolio compounded about 32% a year, by simply holding. [16:00–20:00]
- Passive until aggressive. Danielle, a natural waiter, needs both halves: wait, then strike. [17:00–18:00]
- Judge the decision, not the result. Her own mistake in the 2022 drop was a wrong time frame, selling because of a forecast. [21:00–23:00]
- Does Buffett stay invested? Phil says Buffett goes to cash for long stretches and sells when the story changes (IBM, airlines, Chicago Bridge & Iron). Danielle says most holdings stay for decades, with new cash flow supplying dry powder. The hosts leave it as: core holdings persist, and unneeded cash builds up. [22:00–28:00]
- Size limits Buffett. He has said he could earn far more with a small portfolio. [28:00–30:00]
- "A little wiser, for a long time" and the 20-punch card: a limited number of investment decisions in a lifetime forces better ones. Only a few simple things, really known, are needed. [30:00–32:30]
How it maps to RuleOne
- A cash line on /holdings/ is a legitimate position; selling is triggered by the story changing, not a forecast.
- Paying yourself first (about 10% of income) creates the capital to deploy in a sell-off.
Buffett, Munger and Graham links
- Buffett's 1962 partnership letters describe his "generals" and the private-owner value approach; the Berkshire letters from 1977 on are the reading list.
- Buffett's punch-card idea is from his talks to students (see the Snowball biography for retellings).
- Munger quotes here are from his talks and Daily Journal and Berkshire meetings.
Words to know
- Speculation: buying because you expect someone to pay more, rather than because it is worth more.
- Dry powder: cash held ready for bargains.
Try this
Read one Berkshire letter, the first available after 1977 on berkshirehathaway.com, and write down three sentences you would add to a checklist. Then compare to the list at /stocks/ for any company he mentions.
Check yourself
- What did Phil say about where the big money is made?
Answer
In the waiting, both before buying and while holding. - Why judge the decision rather than the result?
Answer
Outcomes include luck; a flawed process can still pay and a sound one can still lose. - What triggers a Buffett sale in these examples?
Answer
The story changing: management, the business, or the industry.
Short quotes
"The big money is not in the buying and the selling, but in the waiting." (Munger, via Phil, ~16:00, auto-transcribed)