What if the secret to getting rich wasn’t about finding the next Tesla or Amazon? What if it was simply about not losing?
Charlie Munger, Warren Buffett’s legendary partner, had a brilliant philosophy. He called it “inversion.” He famously said, “All I want to know is where I’m going to die, so I’ll never go there.”
This simple, powerful idea is how Berkshire Hathaway became one of the most successful companies in history. It’s not always about brilliant, complex moves. It’s about consistently avoiding common, stupid mistakes.
Buffett and Munger built their empire on a simple “What We Don’t Do“ list. Here are the key lessons for the everyday investor.
🚫 1. They Don’t Gamble on “Hot” Trends They Can’t Predict
Buffett and Munger openly admit they can’t predict the future, especially in complex, fast-changing industries.
Just because an industry is growing (like autos in 1910, or AI today) doesn’t mean it’s a good investment. That growth attracts swarms of competitors, which often destroys profits for everyone.
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Old Example: Buffett avoided tech during the 1999 dot-com bubble. He looked foolish for a while… and then looked like a genius when it all came crashing down.
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Modern Example: Think about the “EV wars” today. There are dozens of companies fighting for supremacy. How do you know which one will be the winner in 10 years? Buffett would say, “It’s too hard to tell.”
Instead, they stick with businesses they can understand and predict for decades, like insurance, railroads, or Coca-Cola.
The lesson: Don’t chase hype. Investing in what you understand is always a better strategy than gambling on what you don’t.
💰 2. They Don’t Run on Fumes. They Hoard Cash.
Buffett calls this “never becoming dependent on the kindness of strangers.”
In investing, “strangers” are banks, lenders, or a stock market you need to sell into to get cash.
Berkshire always keeps a massive pile of cash ($20 billion in the article, often over $100 billion today). Buffett admits this cash earns “a pittance,” but in exchange, they “sleep well.”
Why? Because when panic hits, cash is king.
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Case Study: During the 2008 financial crisis, the entire world was desperate for money. Banks were failing. But Berkshire was sitting on its mountain of cash. They weren’t beggars; they were the bank. They were ableto “supply” cash to companies like Goldman Sachs and GE on incredible terms, making billions.
The lesson: Cash isn’t “trash.” It’s your fortress. It gives you the power to survive any storm and, more importantly, to seize opportunities when everyone else is panicking.
📣 3. They Don’t Listen to Wall Street “Noise” or Market Forecasts
You know all those “experts” on TV shouting about where the market is headed? Buffett and Munger ignore all of them.
They make “no attempt to woo Wall Street.” They don’t care about quarterly earnings, analyst ratings, or media commentary. They’re not trying to impress people who trade stocks day-to-day.
They are looking for long-term partners shareholders who have actually read the reports and want to own a piece of the business for years.
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The Trap: In 2009, at the bottom of the crash, Buffett wrote that the economy would be “in shambles” for a while longer. The “sound-bite” reporters all screamed, “Buffett is bearish!” But if you read the whole sentence, he was incredibly bullish on America’s long-term future.
The lesson: Stop listening to forecasts. Stop checking your stocks every day. Focus on the business, not the “noise.” Buy companies you’d be happy to own if the stock market closed for five years.
Success isn’t about being a “forecasting bad.” It’s about patience, common sense, and knowing what not to do.
What’s on your “what not to do” investing list? Let me know in the comments!
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