Prominent investor and founder of Berkshire Hathaway, known for thoughts about good decision making and applying a ‘latticework of mental models’ from a wide range of academic fields.
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Charlie Munger calls the lollapalooza effect a combination of several elements all acting in concert to create an even greater outcome. In investing, you are looking for outsized gains and you should look for these effects.
Charlie Munger’s first rule of compounding is to never interrupt it unnecessarily. Because of the way compounding works over time, to prematurely interrupt it (e.g. selling your shares or stopping to contribute) will forgo the largest upside—most compounding interest benefits occur at the end.
There are four kinds of luck.