Legendary Insights
Charlie Munger, the revered late chairman of Berkshire Hathaway, once famously quipped, “I don’t invest in what I don’t understand,” casting a shadow over Mark Zuckerberg’s Facebook. This sentiment found an echo in the words of another financial luminary, Robert Kiyosaki, renowned author of “Rich Dad Poor Dad.”
The Historical Omission: Back in 2012, when the tech world was abuzz with optimism, Warren Buffett and Munger chose to steer clear of investing in the initial public offering of Meta Platforms, now known as Facebook, whether through the Berkshire Hathaway portfolio or personally.
Buffett, speaking at Berkshire’s annual meeting in Omaha, categorically stated, “We never buy into an offering,” debunking the myth of an IPO being the ultimate investment amidst a myriad of choices, terming it “mathematically impossible.”
Reflecting Munger’s Stance: Known for his unvarnished approach, Munger declared, “I don’t invest in what I don’t understand. And I don’t want to understand Facebook,” as he conspicuously refrained from joining the social media bandwagon.
In a modern-day parallel, another seasoned investor in 2021 reiterated Munger’s doctrine through a tweet, on the revamped Twitter platform, emphasizing, “Don’t invest in what you don’t know. Learn first then invest.”
Significance of the Stance: In June of the current year, the Museum of American Finance and the Gabelli School of Business at Fordham University held a tribute to Munger, who breathed his last breath in November 2023. The event underscored Munger’s core tenets and investment acumen, encapsulating his famous ethos, “Invert, always invert,” advocating the resolution of complex problems by identifying actions to avoid first.
Munger’s wisdom also extolled the virtues of patience and discipline in investing, elucidating, “It takes character to sit with all that cash and to do nothing. I didn’t get to be where I am by going after mediocre opportunities.”
The grandeur of Zuckerberg’s Meta now stands at $1.337 trillion, positioning it as the seventh wealthiest entity globally.
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