How does Munger evaluate Buffett's 'price discipline'? Are there more flexible suggestions?

How Does Munger View Buffett's "Price Discipline"?

Hey there! I've been in the investment world for a few years and am a huge fan of studying the dynamic duo, Buffett and Munger. Your question is really interesting—let me break it down casually, step by step.

First, What Is "Price Discipline"?

Buffett’s "price discipline" is his golden rule: only buy stocks when their price is below their intrinsic value, never chase highs. Simply put, it’s about never overpaying and waiting for discounts. This helped him dodge market bubbles and avoid buying at peak prices. Buffett himself often says this patience for great opportunities is key to his success.

Munger’s Take

Munger loves this approach! As Buffett’s decades-long partner, he’s praised this discipline repeatedly. At Berkshire Hathaway annual meetings, Munger has said things like: "Warren’s greatness lies in his ironclad discipline—he never buys recklessly, even when the market is euphoric." To Munger, this isn’t just skill; it’s a character strength. While Munger also believes in value investing, he admits Buffett executes it more rigorously. He’s even joked that Buffett is an "old stick-in-the-mud," but that stubbornness made them fortunes. Overall, Munger sees this discipline as the core wisdom Buffett learned from Ben Graham, helping them avoid countless pitfalls.

Any More Flexible Advice?

Munger isn’t rigid, though. He’s suggested flexibility, especially in modern markets. Waiting only for "bargains" can mean missing great companies—like when they invested in Apple without insisting on rock-bottom prices, focusing instead on long-term value and its economic moat (competitive edge). Munger’s advice:

Be slightly flexible with exceptional companies: If a company is outstanding (e.g., Coca-Cola or Apple), buying at a fair—not dirt-cheap—price can make sense. But you must calculate its future value carefully; no blind bets.
Don’t ignore growth: Value investing isn’t just about current price; it’s about sustainable growth. He urges beginners to learn about "compound growth," not just hunt for cheap stocks.
But discipline remains core: Flexibility isn’t recklessness. Munger’s mantra: "If you can’t find a good deal, do nothing—hold cash and wait." Chasing trends? That’s how you lose money.

From my experience: Don’t just copy Buffett and Munger. Start small, test your risk tolerance. Munger’s book Poor Charlie’s Almanack is packed with down-to-earth wisdom on this—highly recommended!

Got more questions, like specific cases? Ask away—let’s keep chatting!