Charlie Munger, over the past few decades, has partnered with Warren Buffett to create one of the most outstanding investment records in history. Although Munger is now 97 years old, he still serves as the vice chairman of Berkshire Hathaway and remains active on the front line of investment. In terms of qualifications and performance, Charlie Munger is undoubtedly a master in the field of value investing. So, what golden investment principles can we ordinary people learn from the master Munger?

1. Self-awareness

How can one achieve self-awareness? First and foremost, one must know where their circle of competence lies. Munger states that he has three options regarding investment: investable, non-investable, and too difficult to understand, and he is determined not to step out of his circle of competence. Munger once said, "The most important thing is not to fool yourself, and remember that you are the easiest person to fool."

Just like Buffett and Bill Gates, although they are good friends, they have not bought Microsoft's stock because they do not understand the industry very well. One year, when Bill Gates had a birthday, Buffett bought 100 shares of Microsoft stock, using his own money as a symbol of friendship, rather than as an investment. The herd effect in the stock market is particularly strong, and an important reason is that people see others around them making money, and they follow the trend driven by envy and jealousy. However, top investors rarely take risks to invest in areas beyond their cognition.

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2. Overcoming oneself

Overcoming oneself refers to self-discipline and rationality. Munger said, "Continuously cultivate your ideal character (investment character) in life, with uncompromising patience, self-discipline, and self-control - no matter how much pressure is suffered, it will not shake or change principles."

Investment is not so much about defeating the market as it is about overcoming oneself. In order to overcome himself, Munger and Buffett have been continuously self-improving for decades. Both Munger and Buffett are learning machines. At the age of 95, Munger still reads 20 books a week, and when he is excited, he can stay up all night until the early morning. His love and perseverance for learning are truly admirable.

As Laozi said, "He who conquers others is strong; he who conquers himself is mighty." Being able to conquer others shows that you are a powerful person; but those who can conquer themselves are the true strong.III. Contrarian Thinking

Munger has always emphasized "think in reverse, always think in reverse." His more classic saying is, "If I know where I'm going to die, then I'll never go to that place." This is similar to Buffett's classic expression, "Be greedy when others are fearful, and be fearful when others are greedy."

These words are easy to say, but they are difficult to implement in practice because contrarian action requires going against one's own nature, which is exactly where investment tests people the most. However, Buffett and Munger have achieved this. At the height of the 2008 subprime crisis, they published an article in The New York Times saying, "I am buying American stocks." In his 2009 annual letter to shareholders, Buffett went further, saying that one should be greedy during a crash: "Such huge opportunities are very rare. When it's raining gold, you should use a big bucket to catch it, not a tiny ring."

IV. Less is More

Munger said that he has been very successful by investing in only three companies in his life, which are Berkshire Hathaway, Costco, and Li Lu's fund. The principle is also very simple. Munger quoted Bill Ross in the book, saying, "If you have 40 concubines, you must not be able to understand each woman thoroughly."

Buffett has also said something similar, saying, "For anyone with a regular amount of capital, if they really understand the business they invest in, six is more than enough." Even, "As long as you can withstand the price fluctuations, having three stocks is enough."

This is a very profound truth. Homework must be done well, and one must put pressure on themselves every day and practice repeatedly. However, as a cultivation, sometimes subtraction is needed, and all the noise and useless things must be cut off to keep the mind clear and rational. Therefore, investing is a kind of cultivation, not just the accumulation of knowledge.

V. Stillness is Better than Motion

Looking at the life state of Munger and Buffett, they are very quiet, and the most they do is read and think. Munger said, "We spend a lot of time thinking. My schedule is not full, we sit down and think continuously. In a sense, we are more like scholars than businessmen. My system is always to sit down and think quietly for a few hours. I don't mind if nothing happens for a long time."

However, we always want to do something, and we feel uneasy if we don't do something. This may not be a good thing in investment, as investment requires independent thinking, and it's better not to act blindly. Waiting for opportunities in stability is their investment norm. Keeping still and eliminating restlessness is the essence of investment.Sixth, Cautious and Meticulous

The term "cautious and meticulous" seems to be a derogatory term in daily life. When someone is described as cautious and meticulous, it feels as if they lack courage and decisiveness. However, in the field of investment, this is actually a very good trait. Investment is not about how fast you run in the short term, but about being able to hold on in the long term, not being eliminated, and the survivor is the king.

Warren Buffett has said something similar. The three most important things in investment are, "First, to avoid risks as much as possible and protect the principal; second, still to avoid risks as much as possible and protect the principal; third, to firmly remember the first two points." The primary goal of investment is not to lose money. Once the principal is lost, it means you can never come back.