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- How To Outsmart The Market By Doing Less | The Charlie Munger Way
How To Outsmart The Market By Doing Less | The Charlie Munger Way
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Charlie Munger once saidā¦
The big money is not in the buying and the selling, but in the waiting.
Sure, itās not the kind of quote that fires you up.
I know.
But itās got the subtle brilliance of a seasoned trader whoās 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 ābuyā and āsellā buttonsā¦
Munger would be the guy in the corner, sipping iced tea, leaning back in a way that suggests heās 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
Itās fun!
I understand.
But is it really the best trading style?
Well, letās be honestā¦
Fast trading is fun, agree.
Thereās a thrill in watching the charts move.
Feeling like youāve got a handle on every shift in the market.
Itās cool, I know!
Itās like the trading version of skydiving.
Itās 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.
Youāre not scrambling to keep up with every market move.
Instead, youāre 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 donāt have to stare at the charts all day.
Your trading is:
Controlled.
Effortless.
Sustainable.
And yes!
Itās also more profitable in the long run.

Againā¦
Whoās the smarter trader here?
I say trader B.
Without a doubt.
But hereās the kicker:
Mungerās philosophy isnāt just about sitting around twiddling your thumbs.
Itās about being ready when the market hands you that opportunity.
Like he said:
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 donāt. Itās just that simple. And to me, itās obviously right. And yet, practically nobody operates that way.
Thatās 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, youāre sitting there, cool as a cucumber, waiting for your moment.
Thatās where the consistency is:
Not in the constant buying and selling.
Itās in the waiting!
So next time you feel the itch to click that ābuyā or āsellā 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¦
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 didnāt check all your boxes but you still followed that itch to take that random trade.
Yes! I see you nodding.
You know exactly what Iām 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.