Cointime

Download App
iOS & Android

What crypto traders can learn from Charlie Munger — even if he hated BTC

Legendary investor and billionaire Charlie Munger, known as the right-hand man of Warren Buffet who helped build investment powerhouse Berkshire Hathaway, has passed away at 99 years of age.

Munger’s family informed Berkshire “that he peacefully died this morning at a California hospital,” according to a company announcement on Nov. 28.

Munger, who served as vice chairman at Buffet’s empire since 1978, accumulated a net worth of $2.6 billion and was routinely praised for adopting a sound investment and stock-picking philosophy throughout his tenure at Berkshire.

While Bitcoin and cryptocurrencies weren’t favored investments for Munger and Buffet, who once referred to Bitcoin (BTC) as “rat poison” and “rat poison squared,” crypto traders could still benefit from Munger’s learnings over his 60 years of investing experience. Here are some approaches to investment that Munger swore by: 

Only invest in what you know

Munger said Berkshire Hathaway would often categorize stocks into one of three baskets when evaluating a potential investment.

“We have three baskets for investing: yes, no, and too tough to understand.”

The latter could explain why Munger and Buffet never invested in Bitcoin and cryptocurrencies, but the takeaway message is that they avoided investing in what they didn’t know.

Buffet has previously admitted he and Munger — both regarded as tech skeptics — were “too dumb to realize” the potential of Amazon’s e-commerce business in the 1990s and underestimated the company’s founder, Jeff Bezos.

Berkshire didn’t invest in Microsoft or Google either. “We blew it,” Munger once said, reflecting on the firm’s decision not to invest in Google.

Despite that, Berkshire stuck to the sectors it knew inside out, such as the banking and food and beverage sectors, making huge profits from investments in Bank of America, American Express, Coca-Cola Co, and later Apple after initially deciding not to invest in it.

Munger and Buffet also mastered the art of valuation by interrogating a firm’s balance sheet before making an investment decision, which Munger once said is the only intelligent way to invest.

“All intelligent investing is value investing [...] You must value the business in order to value the stock.”

While blockchains and protocols can’t often be valued via a discounted cash flow model or other traditional methods, plenty of insights can be obtained from on-chain data — from the number of daily active users and transaction volumes to total value locked (relative to market cap) and net inflows and outflows, to name a few.

Temperament, not IQ, is a bigger contributor to investment success

Munger was never been one to dive headfirst into a new trend, preferring to stay on the more conservative side of investing.

He’s previously said many “high IQ” people are terrible investors because they have terrible temperaments. “Great investors,” on the other hand, tread with caution and think things through:

"The great investors are always very careful. They think things through. They take their time. They're calm. They're not in a hurry. They don't get excited. They just go after the facts, and they figure out the value. And that's what we try to do."

“You need to keep raw irrational emotion under control,” Munger said in another comment.

Having been in the investment arena for over 60 years, Munger says patience is also of great importance when accumulating wealth.

“The big money is not in the buying or the selling, but in the waiting.”

Build conviction and stomach volatility

Munger has seen Berkshire’s investment portfolio dip several times over the decades, such as the Black Monday crash in 1987, the financial crisis in 2007-2008 and most recently, the COVID-19 pandemic.

He once stressed that long-term investors must learn to stand by their investments when unfavorable macroeconomic conditions trigger market downfalls:

"If you're not willing to react with equanimity to a market price decline of 50% two or three times a century, you're not fit to be a common shareholder and you deserve the mediocre result you're going to get."

“There are going to be periods when there’s a lot of agony and other periods when there’s a boom,” Munger said in a separate comment. “You just have to learn to live through them.”

Munger was born on Jan. 1, 1924 — meaning he passed away 34 days shy of his 100th birthday.

"Berkshire Hathaway could not have been built to its present status without Charlie's inspiration, wisdom and participation," Buffett said in a statement.

Comments

All Comments

Recommended for you

  • Musk: Future Phones Will Have No Apps or Operating Systems, Just AI Generation

    On October 25, Musk predicted that in the next 5 to 6 years, smartphones may undergo a complete transformation: traditional operating systems and apps will gradually disappear, and phones will become dedicated terminals for running AI. At that time, users will no longer need to download applications or open software; instead, they will simply tell the AI what they want, and the phone's AI will collaborate with cloud AI to generate videos, images, and various interactive content in real-time.

  • Iran: Tehran's Stance Unchanged Despite Potential New U.S. Strikes

    On October 25, Iranian Foreign Minister Zarif stated on Sunday that Iran's position will not change even if a new round of conflict erupts between Israel and the United States. This comes amid escalating tensions between Tehran and Washington. U.S. President Trump had mentioned on Friday that Washington "might come back for another small-scale 'epic fury'" military operation. Zarif remarked, "Recently, some have talked about the possibility of a new war, but I am already considering the post-war situation. Our policies will not change whether or not war occurs. They have tried twice before and have seen the results. If they want to try again, they should understand that the final outcome will be no different from the past." (Golden Ten)

  • Russia Ready to Supply Any Amount of Diesel to the U.S.

    On October 25, Russian Deputy Prime Minister Novak stated that Russia is prepared to supply any amount of diesel to the United States.

  • Egypt's Benchmark Stock Index Declines by 5%

    Egypt's benchmark stock index has expanded its decline to 5%.

  • Yemen Conflict Escalates, Saudi and Egyptian Stock Markets Decline

    On October 25, Sunday, the stock markets in Saudi Arabia and Egypt experienced declines. This followed a statement from the Saudi-led coalition indicating that, amid escalating conflicts with the Yemeni Houthi forces, the coalition intercepted several drones and missiles over Riyadh and southern Saudi Arabia. Under pressure from widespread sell-offs, the Saudi benchmark index (TASI) fell by 2.6%, marking its worst intraday performance since April 2025, with major stock Saudi Aramco dropping by 1.1%. Outside the Gulf region, the Egyptian blue-chip index (EGX30) plummeted by 2.5%, nearing its lowest level in about seven months, with all constituent stocks declining. The Egyptian parliament is expected to vote on October 26 to decide whether to authorize the armed forces to provide support for Saudi Arabia in its conflict with the Houthi forces upon request.

  • SemiAnalysis CEO: Substrates are the 'Biggest Bottleneck'

    On October 25, the CEO of SemiAnalysis stated: 'I believe that in the semiconductor industry, the biggest limiting factor, aside from memory, is substrates. Substrates, PCB materials, and substrate materials are all severely under-invested. Many companies in the supply chain that produce these materials in Japan are relatively conservative and unwilling to make significant investments in capacity. As a result, there is a huge bottleneck. In terms of what can be produced in the next two years, whether it’s accelerators, CPUs, or any other component in the supply chain, I believe substrates are the biggest bottleneck.'

  • Keystone Hardware Wallet Website Hacked, Customer Information Leaked

    On October 25, Hong Kong-based self-custody hardware wallet brand Keystone, known for its full isolation and QR code signing, disclosed that its official website was unauthorizedly accessed on October 20, exposing customer names, contact information, shipping addresses, and order details (including purchased products and prices). The company confirmed on October 23, after verifying API activity with Shopify, that a third party obtained customer shipping information. Keystone emphasized that payment card and bank information, mnemonic phrases, private keys, and wallet passwords were not leaked. The company has blocked access, patched vulnerabilities, initiated an investigation, and notified affected customers via email, warning that scammers may impersonate Keystone to deceive customers under the pretext of refunds or device exchanges. Customers are advised not to click on suspicious links and not to disclose mnemonic phrases and private keys, with plans to release a detailed report within a few days. Other companies in the industry, such as Trezor (which experienced a leak from logistics provider ShipMonk in August) and Ledger (which had a security incident this month involving modified devices stealing mnemonic phrases), have also faced security issues.

  • Goldman Sachs Lowers 12-Month Target for South Korea's KOSPI Index by 25%

    On October 25, strategists at Goldman Sachs Group lowered their target for South Korea's KOSPI index by 25%. Previously, they had raised the target multiple times this year, but with increasing market concerns over AI-related trades, they have now opted for a downgrade. Led by analyst Timothy Moe, the team reduced the 12-month target for the KOSPI index from 12,000 points to 9,000 points. They noted that, given the benchmark index has fallen more than 35% from its peak in June, valuation assumptions need to become more cautious. These strategists believe that the current sell-off has left the South Korean stock market significantly undervalued; even after the target downgrade, the index still has over 60% upside potential.

  • Iran-Pakistan Border Reopens

    On October 25, according to Fars News Agency, Pakistan has reopened the Gabd-Rimdan border crossing in the Gwadar region, allowing trucks carrying liquefied gas and essential goods to resume passage. The crossing had been closed for less than a week due to security concerns and efforts to combat smuggling. Meanwhile, natural gas prices in Pakistan have reached a historic high.

  • South Korea Delays Cryptocurrency Tax Policy Originally Set for January

    On October 25, the South Korean presidential office decided to postpone the cryptocurrency income tax policy that was scheduled to take effect in January next year. An official from the presidential office stated on the 25th, "The discussions are leaning towards delaying the implementation of the cryptocurrency tax." The South Korean government had established a tax on virtual asset gains as early as 2020 when it revised the Income Tax Act, but the policy has been delayed three times. Initially set to take effect on January 1, the presidential office has now decided to postpone it again, citing incomplete tax administration preparations and public opinion among the youth. According to the revised Income Tax Act, annual gains from the transfer or lending of virtual assets are subject to a combined tax rate of 22% (including other income taxes and local income taxes) after a basic tax exemption of 2.5 million won.