Few Bets, Big Bets, Infrequent Bets
“A few major opportunities clearly recognizable as such, will usually come to one who continuously searches and waits, with a curious mind, loving diagnosis involving multiple variables. And then all that is required is a willingness to bet heavily when the odds are extremely favorable, using resources available as a result of prudence and patience in the past.”
- Charlie Munger
I recently wrote an article on Seeking Alpha that discussed five different decisions that Warren Buffet, Charlie Munger, and Rick Guerin made during the late 60's to late 80's that turned out to be really successful for them. Mohnish Pabrai gave a lecture at the University of California, Irvine in June of 2017 and that speech talked about these five decisions in great detail and that is what got my ideas flowing to write this article.
Those 5 decisions were:
(1.) Taking control of Blue Chip Stamps
(2.) Buying See's Candy
(3.) Buying Wesco Financial
(4.) Buying Buffalo News
(5.) Investing in Freddie Mac
All of these decisions turned out to be very profitable, but of course they didn't come without any risk. A large part of Warren's, Charlie's, and Rick's net worth from their personal savings and their hedge funds were tied up in these investments. When one of these investments went sour, so did the investment partnerships that each one was running at the time. And don't forget about their personal lives and emotions too.
You can read my article by following the link below and you can watch the lecture also by clicking play.