{"id":184182,"date":"2023-11-29T03:38:59","date_gmt":"2023-11-29T03:38:59","guid":{"rendered":"https:\/\/precoinnews.com\/?p=184182"},"modified":"2023-11-29T03:38:59","modified_gmt":"2023-11-29T03:38:59","slug":"what-crypto-traders-can-learn-from-charlie-munger-even-if-he-hated-btc","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/crypto\/what-crypto-traders-can-learn-from-charlie-munger-even-if-he-hated-btc\/","title":{"rendered":"What crypto traders can learn from Charlie Munger \u2014 even if he hated BTC"},"content":{"rendered":"

Legendary investor and billionaire Charlie Munger, known as the right-hand man of Warren Buffet who helped build investment powerhouse Berkshire Hathaway, has passed away at 99 years of age.<\/p>\n

Munger\u2019s family informed Berkshire \u201cthat he peacefully died this morning at a California hospital,\u201d according to a company announcement on Nov. 28.<\/p>\n

Munger, who served as vice chairman at Buffet\u2019s empire since 1978, accumulated a net worth of $2.6 billion and was routinely praised for adopting a sound investment and stock-picking philosophy throughout his tenure at Berkshire.<\/p>\n

While Bitcoin and cryptocurrencies weren\u2019t favored investments for Munger and Buffet, who once referred to Bitcoin (BTC) as \u201crat poison\u201d and \u201crat poison squared,\u201d crypto traders could still benefit from Munger\u2019s learnings over his 60 years of investing experience. Here are some approaches to investment that Munger swore by:\u00a0<\/p>\n

Only invest in what you know<\/h3>\n

Munger said Berkshire\u00a0Hathaway would often categorize stocks into one of three baskets when evaluating a potential investment.<\/p>\n

\u201cWe have three baskets for investing: yes, no, and too tough to understand.\u201d<\/p><\/blockquote>\n

The latter could explain why Munger and Buffet never invested in Bitcoin and cryptocurrencies, but the takeaway message is that they avoided investing in what they didn\u2019t know.<\/p>\n

Buffet has previously admitted he and Munger \u2014 both regarded as tech skeptics \u2014 were \u201ctoo dumb to realize\u201d the potential of Amazon\u2019s e-commerce business in the 1990s and underestimated the company\u2019s founder, Jeff Bezos.<\/p>\n

Berkshire didn\u2019t invest in Microsoft or Google either. \u201cWe blew it,\u201d Munger once said, reflecting on the firm\u2019s decision not to invest in Google.<\/p>\n

Despite that, Berkshire stuck to the sectors it knew inside out, such as the banking and food and beverage sectors, making huge profits from investments in Bank of America, American Express, Coca-Cola Co, and later Apple after initially deciding not to invest in it.<\/p>\n

Munger and Buffet also mastered the art of valuation by interrogating a firm\u2019s balance sheet before making an investment decision, which Munger once said is the only intelligent way to invest.<\/p>\n

\u201cAll intelligent investing is value investing […] You must value the business in order to value the stock.\u201d <\/p><\/blockquote>\n

While blockchains and protocols can\u2019t often be valued via a discounted cash flow model or other traditional methods, plenty of insights can be obtained from on-chain data \u2014 from the number of daily active users and transaction volumes to total value locked (relative to market cap) and net inflows and outflows, to name a few.<\/p>\n

Temperament, not IQ, is a bigger contributor to investment success<\/h3>\n

Munger was never been one to dive headfirst into a new trend, preferring to stay on the more conservative side of investing.<\/p>\n

He\u2019s previously said many \u201chigh IQ\u201d people are terrible investors because they have terrible temperaments. \u201cGreat investors,\u201d on the other hand, tread with caution and think things through:<\/p>\n

“The great investors are always very careful. They think things through. They take their time. They’re calm. They’re not in a hurry. They don’t get excited. They just go after the facts, and they figure out the value. And that’s what we try to do.”<\/p><\/blockquote>\n

\u201cYou need to keep raw irrational emotion under control,\u201d Munger said in another comment.<\/p>\n

Related: <\/em><\/strong>Bitcoin is a \u2018disgusting\u2019 product that comes \u2018out of thin air,\u2019 says Charlie Munger <\/em><\/strong><\/p>\n

Having been in the investment arena for over 60 years, Munger says patience is also of great importance when accumulating wealth.<\/p>\n

\u201cThe big money is not in the buying or the selling, but in the waiting.\u201d<\/p>\n

Build conviction and stomach volatility<\/h3>\n

Munger has seen Berkshire\u2019s investment portfolio dip several times over the decades, such as the Black Monday crash in 1987, the financial crisis in 2007-2008 and most recently, the COVID-19 pandemic.<\/p>\n

He once stressed that long-term investors must learn to stand by their investments when unfavorable macroeconomic conditions trigger market downfalls:<\/p>\n

“If you’re not willing to react with equanimity to a market price decline of 50% two or three times a century, you’re not fit to be a common shareholder and you deserve the mediocre result you’re going to get.” <\/p><\/blockquote>\n

\u201cThere are going to be periods when there\u2019s a lot of agony and other periods when there\u2019s a boom,\u201d Munger said in a separate comment. \u201cYou just have to learn to live through them.\u201d<\/p>\n

Munger was born on Jan. 1, 1924 \u2014 meaning he passed away 34 days shy of his 100th birthday.<\/p>\n

“Berkshire Hathaway could not have been built to its present status without Charlie’s inspiration, wisdom and participation,” Buffett said in a statement.<\/p>\n

Magazine: <\/em><\/strong>This is your brain on crypto: Substance abuse grows among crypto traders<\/em><\/strong><\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Legendary investor and billionaire Charlie Munger, known<\/p>\n","protected":false},"author":3,"featured_media":184181,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"yoast_head":"\nWhat crypto traders can learn from Charlie Munger \u2014 even if he hated BTC - Pre Coin News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/precoinnews.com\/crypto\/what-crypto-traders-can-learn-from-charlie-munger-even-if-he-hated-btc\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What crypto traders can learn from Charlie Munger \u2014 even if he hated BTC - Pre Coin News\" \/>\n<meta property=\"og:description\" content=\"Legendary investor and billionaire Charlie Munger, known\" \/>\n<meta property=\"og:url\" content=\"https:\/\/precoinnews.com\/crypto\/what-crypto-traders-can-learn-from-charlie-munger-even-if-he-hated-btc\/\" \/>\n<meta property=\"og:site_name\" content=\"Pre Coin News\" \/>\n<meta property=\"article:published_time\" content=\"2023-11-29T03:38:59+00:00\" \/>\n<meta name=\"author\" content=\"mediabest\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/precoinnews.com\/wp-content\/uploads\/2023\/11\/What-crypto-traders-can-learn-from-Charlie-Munger-\u2014-even-if-he-hated-BTC.jpg\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"mediabest\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/precoinnews.com\/crypto\/what-crypto-traders-can-learn-from-charlie-munger-even-if-he-hated-btc\/\",\"url\":\"https:\/\/precoinnews.com\/crypto\/what-crypto-traders-can-learn-from-charlie-munger-even-if-he-hated-btc\/\",\"name\":\"What crypto traders can learn from Charlie Munger \u2014 even if he hated BTC - 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