Berkshire Hathaway Vice Chair Charlie Munger thinks that everyone can be a good investor – but maybe not more than just “good.”
Speaking at the Daily Journal’s annual meeting on Feb. 24, Munger, who serves as the Daily Journal’s executive chair, compared investing to chess.
“I think people have the theory that any intelligent, hard-working person can be a great investor,” he said. “I think any intelligent person can get to be a pretty good investor and avoid certain obvious traps.”
“But I don’t think everybody can be a great investor, or a great chess player,” he added. “I think some of these things are very difficult.”
At the Daily Journal annual meeting, Munger answered a wide-ranging array of questions from the audience about investing, bitcoin and the recent GameStop frenzy.
Someone asked Munger if he had seen the Netflix show “The Queen’s Gambit,” as he had previously spoken about the similarities between chess and investing.
"I have seen an episode or two of 'Queen's Gambit,’” he said. “And what I think is interesting about chess is to some extent, you can’t learn it unless you have a certain natural gift. Even if you have a natural gift, you can’t be good at it, unless you start playing and get huge experience. So it’s a very interesting competitive field.”
Munger talked about a business mind he regarded a genius — who was also a chess player who could play blindfolded at just below the grandmaster level. “There aren’t many people who can do that,” said Munger.
The parallel he draws between investing and chess is that often it’s not a good idea to spread decision-making power — it’s better to leave it in the hands of people like this chess player.
“It’s a mistake for investment management to hire armies of people to make conclusions. Better off to concentrate your decision power in one person... and choose the right person,” he said. “I don’t think it’s easy for ordinary people to become great investors.”
Read more from the Daily Journal Meeting: