The Wild Decline of Chevron’s Stock Price

When you read Charlie Munger’s biography by Janet Lowe (“Damn Right”), you will frequently encounter the financial premise that dominated Munger’s thought process from the age of thirty onward: he sought ownership positions in assets that pounded out cash. The spectacular personal success was the result of being patient enough to get a good price on those very assets that pounded cash.

The unique aspects of Munger’s life is that: (1) he did not mind the subsequent volatility of stocks he purchased, often seeing some of his stocks slide more than 50% after he made his initial purchase, and (2) he got in the business of using money to make more money, taking income from undervalued cash-generative assets to buy other assets that meet the same conditions. As time passes by, you get to reap the benefits of receiving income from the original assets that paid dividends and then you … Read the rest of this article!