The easiest way invariably is the best way. I don't think you can get to be a really good investor without doing a massive amount of reading. Each year at the annual meeting Munger recommends a wide range of reading material. These include Value Line charts, Cialdini's "Influence", Hagstrom's the WB portfolio: Mastering the Power of Focus Investing.

Frequently you look at a business having fabulous results. And the question is "How long can this continue? Think about why the results are occurring now and about what will make these results to stop occurring."

This helps spot a company that has a franchise on a certain product, a so called "moat" around its business.

Observing business over time gives an investor greater perspective on investing. Some simple changes in the way we live can alter the long term value of a business.

"Modern Portfolio Theory? Its demented!" proclaims Munger. "I also ignore Beta since we think it is nonsense. We just want favorable odds, as long as these are in our favor and we're not risking evrything on one throw of the dice, we don't mind volatility"


I have never taken a course in chemistry, economis, psychology or business. Early elemntary physics and math helped me assimilate the fundamental ethos of hard science, which I therafter pushed further and further into softer and softer subjects. Early exposure to hard skills is essential. Mastery of psychology and accounting should be required.