Legendary investor and Berkshire Hathaway vice-chairman Charlie Munger emphasized the importance of staying calm during market volatility, calling downturns “opportunities for long-term wealth building.”
Market Volatility Is Normal, Says Charlie Munger
In the wake of sharp market swings following President Donald Trump’s tariff announcements, Munger reminded investors that large price fluctuations are a normal part of the stock market.
“I think it’s in the nature of long-term shareholding that the normal vicissitudes in markets means that the long-term holder has the quoted value of his stocks go down by, say, 50%,” Munger told a BBC interviewer in 2009.
Investors Who Panic Risk Mediocre Returns
He stressed that those who panic during downturns are likely to earn subpar returns.
“If you’re not willing to keep your chin up during the occasional rout, you’re not fit to be a common shareholder, and you deserve the mediocre result you’re going to get compared to the people who can be more philosophical about these market fluctuations,” he added.
Munger drew on his experience with Berkshire Hathaway, which had seen its stock fall by more than 50% multiple times.
“Zero worries,” he said when asked about the state of the company during the 2009 market drop. Following Buffett’s principle, the pair continued buying undervalued stocks, confident that U.S. businesses would recover.
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Munger’s Career Wisdom: Hard Work, Discipline, and Strategic Choices
Munger, who passed away in 2023 at age 99, shared his final reflections on life, career, and the principles behind his success.
Munger outlined three rules for career satisfaction: strive to deserve what you want, work under people you respect, and maintain a deep interest in your work.
He emphasized reputation, integrity, and earning trust, advising never to sell anything one wouldn’t buy oneself and to surround oneself with admirable and enjoyable colleagues.
He believed hard work and perseverance were irreplaceable, citing Koreans’ rise in the auto industry as an example of consistent effort leading to extraordinary results.
Munger humorously explained why Warren Buffett became richer, noting Buffett started earlier, worked harder, and was probably slightly smarter, adding that intelligence alone does not guarantee financial success.
His guidance highlighted that long-term achievement stemmed from discipline, careful selection of mentors and partners, and aligning work with personal interests.
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