Charlie Munger Says, 'I Want To Swim As Well As I Can Against The Tides. I'm Not Trying To Predict The Tides' — Learn To Live Through The Ups And Downs

Berkshire Hathaway Inc. Vice Chairman Charlie Munger, a highly respected investor, has a unique perspective on investing. Speaking at the 2022 Daily Journal's annual shareholders meeting, he reminded investors that investing has always been cyclical. Markets go up and down; it's just part of the game. According to Munger, it's essential to stay focused on long-term objectives rather than getting caught up in short-term market trends.

This mindset extends to the way Munger views different types of investments, like stocks and real estate, as well as different industries and investment opportunities. While he acknowledged the historic returns of the past — citing a nearly 10% return after inflation for diversified portfolios — he warned that the future is uncertain. The 99-year-old also noted that the landscape for recent college graduates will likely be more challenging when it comes to investment opportunities.

Don't Miss: An international trading platform that's 75% cheaper than its closest competitor is looking for investors. It has already spread across 130 countries and saw a 600% user growth last year. Now, it aims to become the global people's brokerage. Click here to find out more.

This idea leads to the notion of investing in startups, an area with high potential for significant returns. Although Berkshire Hathaway has largely focused on established companies, it has shown an interest in less mature businesses like cloud-data warehousing company Snowflake Inc. These investments demonstrate a willingness to adapt strategies, always looking for what Munger describes as "something good enough to put Munger money in or Berkshire money in or Daily Journal money in."

Answering a question about the state of the market, especially concerning indexes like the Russell 2000, Munger emphasized that he never tries to predict short-term fluctuations in specific indexes. 

"I figure that I want to swim as well as I can against the tides," he said. "I'm not trying to predict the tides."

Trending: The future will bring many trillion-dollar AI companies. For now, they're just startups worth a couple of million dollars. Invest in AI startups through Fundrise's Venture product.

It's a philosophy that extends to the broader idea of understanding one's "circle of competence" and sticking to it. This means knowing what you're good at, understanding what you're investing in and not straying too far from those strengths.

When asked about the future of tech giants like Microsoft Corp., Apple Inc. and Alphabet Inc., Munger acknowledged the difficulty in making long-term predictions. He cited historical examples like General Motors Co. and Kodak, which no one expected would experience shareholder wipeouts resulting from technological changes. Munger said tech giants like Microsoft, Apple and Alphabet have a durable quality that could see them remaining powerful decades from now.

Munger's insights reflect a blend of caution and optimism. In an environment where short-term swings often dominate the headlines, his counsel offers a valuable lesson: While the future is hard to predict, sticking to sound investment principles and focusing on the long term can guide investors through the highs and lows.

Munger's wisdom transcends the investment world and speaks to life in general. Swimming against the tide is not just about market trends or choosing the right stocks. It's also a life philosophy. It's about having the courage to do what you believe is right, even when it goes against the current. It's about the resilience needed to persevere through challenges, whether they are financial setbacks, career obstacles or personal hardships. And it's about maintaining a vision for the long term, not allowing short-term disturbances to sway your path.

Navigating life's ups and downs with grace and purpose is perhaps the most valuable takeaway from Munger's comments. This advice can serve as a guiding principle for anyone, not just those navigating the complexities of the investment world.

See Next: Blackstone made a $13 billion bet on the growth of student housing. Carve out your own piece of the student housing market with just $500.