How To Outsmart The Market By Doing Less | The Charlie Munger Way

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Charlie Munger once saidā€¦

ā

The big money is not in the buying and the selling, but in the waiting.

Sure, itā€™s not the kind of quote that fires you up.

I know.

But itā€™s got the subtle brilliance of a seasoned trader whoā€™s outsmarted the market more times than anyone can keep count of.

Literally!

Imagine a room where traders pace back and forth, glued to their screens, twitchy fingers hovering over ā€˜buyā€™ and ā€˜sellā€™ buttonsā€¦

Munger would be the guy in the corner, sipping iced tea, leaning back in a way that suggests heā€™s got everything figured out already.

The man knows patience.

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I know!

Fast trading is exciting.

Seeing those candles moving.

Feeling the short opportunities at every angle

Itā€™s fun!

I understand.

But is it really the best trading style?

Well, letā€™s be honestā€¦

Fast trading is fun, agree.

Thereā€™s a thrill in watching the charts move.

Feeling like youā€™ve got a handle on every shift in the market.

Itā€™s cool, I know!

Itā€™s like the trading version of skydiving.

Itā€™s exhilarating, but is it REALLY the wise way to do it?

Imagine it like this:

Would you rather make 12 trades in a month, overall netting you a 2% profit.

Or 2 trades in a month that pulls in 1.8% overall?

Take a moment.

Do the math.

Which trader is smarter?

The one grinding all month to scrape together that 2%?

Or the one sitting back, making fewer moves, but nearly matching that same gain with a fraction of the effort?

Think about itā€¦

The fast paced traders (scalpers) will argue for the 12 trades.

More trades, more profit, right?!

Well no, not exactly.

More trades also mean more fees, more spreads, more time on the charts.

If you are consistently trying to trade every single move then every flicker of the chart demands your attention.

In other wordsā€¦

You have to put in quite some effort for that 2%.

Now, consider the alternative:

Fewer trades, but each one carefully chosen.

Youā€™re not scrambling to keep up with every market move.

Instead, youā€™re waiting patiently, like a lion stalking its prey.

You know the right opportunity will come, and when it does, you pounce.

Less trades, more qualityā€¦

You donā€™t have to stare at the charts all day.

Your trading is:

  1. Controlled.

  2. Effortless.

  3. Sustainable.

And yes!

Itā€™s also more profitable in the long run.

Againā€¦

Whoā€™s the smarter trader here?

I say trader B.

Without a doubt.

But hereā€™s the kicker:

Mungerā€™s philosophy isnā€™t just about sitting around twiddling your thumbs.

Itā€™s about being ready when the market hands you that opportunity.

Like he said:

ā

The wise ones bet heavily when the world offers them that opportunity. They bet big when they have the odds. And the rest of the time, they donā€™t. Itā€™s just that simple. And to me, itā€™s obviously right. And yet, practically nobody operates that way.

Thatā€™s also calledā€¦

Discipline.

Knowing when to strike, and more importantly, when not to.

While the rest of the market is caught up in the noise, youā€™re sitting there, cool as a cucumber, waiting for your moment.

Thatā€™s where the consistency is:

Not in the constant buying and selling.

Itā€™s in the waiting!

So next time you feel the itch to click that ā€œbuyā€ or ā€œsellā€ button, take a breath and ask yourself it you are just trading for the sake of trading.

Or whether you are actually taking action on a REAL and HIGH QUALITY opportunity.

Because sometimes, the smartest thing a successful trader does isā€¦

Nothing at all.

Seriouslyā€¦

ā

The big money is not in the buying and the selling, but in the waiting.

Think of all those stop losses you hit because you jumped into a trade that didnā€™t check all your boxes but you still followed that itch to take that random trade.

Yes! I see you nodding.

You know exactly what Iā€™m talking about.

So would it make a difference if you stopped taking those silly trades while focusing only on the VERY high quality opportunities?

It sure would.

But yes!

It takes patience.