Munger's Four Ps

"Experience tends to confirm a long-held notion that being prepared, on a few occasions in a lifetime, to act promptly in scale, in doing some simple and logical thing, will often dramatically improve the financial results of that lifetime. A few major opportunities, clearly recognizable as such, will usually come to one who continuously searches and waits, with a curious mind that loves diagnosis involving multiple variables. And then all that is required is a willingness to bet heavily when the odds are extremely favorable, using resources available as a result of prudence and patience in the past." - Charlie Munger

Munger's Four Ps seem to be:
  1. Preparation
  2. Prompt Action in Scale
  3. Prudence
  4. Patience
Actions by the Daily Journal (DJCO), where Munger is chairman, over the past decade seem consistent with what he describes above. DJCO kept its cash in mostly in US Treasuries for most of the decade.

In early 2009 that changed.

Specifically, at the start of 2009 the company still held around $ 22 million in cash. Around March 2009, when the market was in turmoil, approximately $ 20 million of that cash was converted to common stocks.

Those equity investments are now worth over $ 50 million.

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Munger's Four Ps
Munger's Four Ps
Reviewed by Pisstol Aer
Published :
Rating : 4.5