Charlie Munger, the renowned chairman of Berkshire Hathaway, famously stated that he refrains from investing in things he does not comprehend, a sentiment shared by Robert Kiyosaki, the author of "Rich Dad Poor Dad." In 2012, Munger and Warren Buffett decided against investing in Meta Platforms, formerly Facebook, during its initial public offering, emphasizing their belief of not buying into offerings and the mathematical unlikelihood of an IPO as the best investment choice among many options.
Munger, acclaimed for his straightforward nature, reiterated his principle of not investing in what he doesn't understand, openly expressing disinterest in understanding Facebook and choosing not to join the social media platform. This philosophy of investing only in what one comprehends was further emphasized by a seasoned investor in 2021 on a social media platform, emphasizing the importance of learning before investing. Munger's investment wisdom was celebrated posthumously in a tribute that highlighted his principles, including the famous concept of 'Invert, always invert,' where he advised addressing complex problems by first identifying actions to avoid.
The legacy of Munger also revolved around the significance of patience and discipline in investment, emphasizing the need for character to abstain from mediocre opportunities and to wait for the right moment. Despite Meta Platforms, led by Mark Zuckerberg, currently being one of the wealthiest companies globally, Munger's principle of prudent investing based on understanding and discipline continues to resonate in the investment world.