1. "Don't snip the flowers and water the weeds/thorns"
-- Do not sell companies that are are growing (Revenue/ EPS/ Cash Flow at high ROCE) and invest in companies that are not growing / have low ROCE / have high debt
2. "A man who jumps off a long building is fine, till he hits the ground" - Charlie Munger (2023)
3. "If you take some turds and mix with a bunch of raisins, they are still turds" - Charlie Munger (2000)
4. "Watch where the owner is going and not the dog" - “Ralph Wanger, the eccentric portfolio manager of the Acorn Fund, once summed up the stock market to Bill Bernstein with an analogy about walking a dog: He likens the market to an excitable dog on a very long leash in New York City, darting randomly in every direction. The dog’s owner is walking from Columbus Circle, through Central Park, to the Metropolitan Museum. At any one moment, there is no predicting which way the pooch will lurch. But in the long run, you know he’s heading northeast at an average speed of three miles per hour. What is astonishing is that almost all of the market players, big and small, seem to have their eye on the dog, and not the owner.
-- Watch how the business is doing and going to do, and not be swayed by the stock price
5. Chris Davis - Watch the cash flows, Accounting profits do not reflect business cash flows In the 17 years it took Walmart to get to a Billion Dollars in revenue it was reporting profits it had negative cash flows (Investments went through the capital account) while Amazon which was reporting losses had positive and growing cash flows
-- Watch cash flows. Accounting may not represent cash flows
6. "Always take the high road. It's far less crowded" . Charlie Munger
7. At the end of the day, Corporate Governance is about Capital Allocation - Charlie Munger
8. You don't have to pee on an electric pole to learn it is a bad idea.
-- don't repeat mistakes that others have made. You don't have to make all mistakes yourself.
9. "Show me the incentives and I'll show you the outcome" - Charlie Munger
