Academic Quote by Charlie Munger
“Berkshire's whole record has been achieved without paying one ounce of attention to the efficient market theory in its hard form. And not one ounce of attention to the descendants of that idea, which came out of academic economics and went into corporate finance and morphed into such obscenities as the capital asset pricing model, which we also paid no attention to. I think you'd have to believe in the tooth fairy to believe that you could easily outperform the market by seven-percentage points per annum just by investing in high volatility stocks.”
About This Quote
Source Interview: CNBC, 2020
Munger dismisses strict adherence to efficient market theory and CAPM, arguing that real‑world investing can outperform by focusing on volatility and fundamentals.
In simple terms: Ignore rigid market models; focus on fundamentals and volatility.
Key Takeaway
Question market models, seek real value.
Themes
investment philosophy
market skepticism
value investing
risk management
fundamentals
Mood
skeptical
analytical
pragmatic
Type
advice
strategic
When to use this quote
- portfolio construction
- stock analysis
- risk assessment
- financial education
- investment strategy
Key Concepts
economics
behavioral finance
stock selection
Questions to Reflect On
- Do you rely on market models or fundamentals?
- How do you handle high‑volatility stocks?
A Different Perspective
Munger’s view may overlook benefits of diversified, passive strategies for many investors.
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