“If people weren’t wrong so often, we wouldn’t be so rich” – Charles Thomas Munger
Charlie, of course known for his fundamental analysis alongside Warren Buffett all these years, was a closet Technician at heart.
His analysis of human behavior was top notch, particularly misbehavior and stupid behavior.
His comment to Warren about the reason they were so rich was because people are so often wrong, was spot on.
If you’ve been paying attention, we use this to our advantage quite a bit.
For example, twelve months ago Wall Street strategists forecasted an outright fall for stocks in 2023, the first time this century that they had predicted a loss…
This was part of the reason we were so bullish in December, especially considering the Bull Market had already been raging since June.
Well, as it turned out, Wall Street strategists could not have been more wrong.
The S&P500 has returned over 20% this year, nearly tripling its average annual return.
The Nasdaq100 has returned over 46% for 2023.
And the Dow Jones Industrial Average is less than 2% from a new all-time high.
Like Charlie Munger taught us, if people weren’t wrong so often, we wouldn’t be so rich.
Fortunately for us, last year Fund Managers were foolish enough to listen to those sell side analysts, even though we all know how bad their track records are.
Bank of America’s Fund Manager survey was asking investors whether or not they were taking higher than normal risks.
The answer was that none of them were, fewer than at the worst parts of the Great Financial Crisis, when no one knew if there would even be a financial system anymore…
And of course, with none of them taking larger than normal risks, it was precisely the time to be taking larger than normal risks.
They were scared.
They listened to sell side analysts.
Let that be a good lesson and a great reminder today from legend Charlie Munger.
People are wrong a lot.
Don’t be mad about it.
Part of the reason we’ve been so right so often is because we take the time to count how many stocks are going up and how many are going down.
All those S&P 493 people have been laughed out of the room.
Anyone who told you to sell stocks because of a war, or a recession or inflation, has embarrassed themselves and cost a lot of people a lot of money.
I’m here for it.
The catalyst has been the US Dollar all along.
We couldn’t have pounded the table harder about it.
And so since the Dollar peaked on October 3rd, here’s how things have been going:
October 3rd was also the day the NYSE new lows list peaked. This is not a coincidence.
Everyone is making money.
Except, of course, these fools telling you about a market crash, or a credit event, or a recession.
Those people have been wrong, as Charlie Munger reminds us happens so often.
Don’t be mad at it.
This is a good thing, for us anyway.
And investing is a selfish endeavor. I’m only in it for me.
I don’t care about those people. Why would I?
Wall Street has it wrong. The angry guy on the twitter has it wrong. The pretty lady on the TV is wrong.
This is all perfectly normal.
If people weren’t wrong so often, we wouldn’t be so rich.
Thank you for all the wisdom and laughs over the years.
You are the man!
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