Charlie Munger's Investment Wisdom and Missed Opportunities with Amazon and Tesla

Charlie Munger, the celebrated vice chairman of Berkshire Hathaway Inc. BRK-A, is renowned for his sharp investing acumen. Yet, even the most astute investors can miss golden opportunities. Munger is often spotlighted for his admiration of inventive leaders like Jeff Bezos of Amazon.com AMZN and Elon Musk of Tesla TSLA, but it's his decision to forgo early investments in their respective companies that stands out as a notable moment in his career.

Learning from See's Candies

One of the pivotal learning moments for Munger and Berkshire Hathaway came in 1972 with the acquisition of See's Candies. This investment taught Munger an invaluable lesson about recognizing the long-term value of well-run businesses with strong moats—principles that he has subsequently applied throughout his investing journey. It also highlighted the importance of acknowledging when it is time to let go of certain ideas and move on, a philosophy that guided his decision-making process even when faced with potential investments in now powerhouse companies such as Amazon and Tesla.

A Glimpse into Other Tech Giants

The world of technology has seen tremendous growth over the past few decades, with companies like Apple Inc. AAPL emerging as leaders in innovation and market dominance. As the world's largest technology company by revenue and the world's most valuable company since 2021, Apple stands as a testament to the potential that Munger recognized but did not seize with Amazon and Tesla. Meanwhile, Tesla has revolutionized the electric vehicle and clean energy sectors, capturing significant market shares in both plug-in and battery electric passenger car segments through its comprehensive product range and storage solutions.

Berkshire Hathaway's Diverse Portfolio

Despite passing up on early investments in AMZN and TSLA, Berkshire Hathaway's diverse portfolio maintains a broad spectrum of significant holdings, including Apple AAPL, which commands a 6.3% stake held by the conglomerate. The portfolio reflects a balanced approach to value generation, emphasizing stable long-term investments. Munger's investment strategy—shaped profoundly by his early days at Berkshire Hathaway—may have left some 'what could have been' scenarios, particularly with the astronomical rises of Amazon and Tesla, but his teachings remain a cornerstone for investors seeking wisdom on navigating the ever-evolving business landscape.

Investing, Munger, Wisdom