Charlie Munger Passes On

One of the great minds of the investment world, Charlie Munger, passed away last week at the ripe age of 99 years.? Until the time of his death, Charlie Munger was the vice president of the investment conglomerate Berkshire Hathaway, of which the more famous Warren Buffet is still currently president.??Charlie was also Warren Buffet's most faithful partner, friend and right-hand man for several decades and was widely known as the Oracle of Pasadena.

During his lifetime, Charlie Munger followed several investment principles that not only stood the test of time but can also be invaluable to Namibian investors.? Warren Buffet, arguably the most successful investor of our time, attributed a lot of his success to Charlie, saying it was precisely Charlie who changed Warren's focus from buying struggling companies at a bargain price and then attempting a turnaround strategy towards rather buying shares in good companies at a fair price.? Berkshire Hathaway, with a current market capitalisation of USD780 billion, would have been much smaller today without Charlie Munger.

Charlie was an eccentric character and some of his statements, more commonly known as Mungerisms, are almost as famous as himself.? Some of these Mungerisms were:

• "Live within your income capacity so you can save." ?This one is obviously nothing new but it's so vitally important.? It has been said that the definition of a poor person is someone who spends more than he earns, regardless of his level of income.
• "People reckon they should hold 100 shares in a portfolio but actually 5 is enough."? One only has so much time to research different stocks.? Charlie and Warren were big advocates for index-linked funds to ordinary people who don't necessarily have the time to research everything as thoroughly as they were able to do.
• And then finally maybe one that is a bit more controversial: "A lot of smart people are poor investors because they have the wrong temperament.? You have to keep your emotions in check, you have to be patient and you have to be disciplined.? You have to be able to handle hard times without panicking."? This is true for many investors especially in tough times.? When markets turn negative, investors quickly lose focus on long term results and often do things they should not have.? Rather remain calm, stay true to your long-term investment goals and get proper advice before getting flustered.

We are sure these investment principles will assist Namibian investors to focus on the right things.? Our investment philosophy at Capricorn Asset Management is simply "Invest Sensibly" and it resonates with Charlie Munger's approach.? For us, an investment must make sense within the current market conditions and make sense given the investor's unique situation.? This simple but sensible approach helps us to ensure that our clients' investments remain relevant and allow our clients to enjoy their investment journey without unnecessary fear or anxiety.

Investors who would like to know more about this can visit our website (www.cam.com.na), contact us directly in Windhoek at 061 – 299 1950 or ask your financial adviser about the range of Capricorn Unit Trust funds.