 Part 2 on Charlie Munger. So let's discuss risk and investment attitude. Risk to us is the risk of permanent loss of capital or the risk of inadequate return. In academia they say risk is volatility and most of the investment community likes to think like that. However the question is how much can I lose? That's it. Volatility take advantage of it and if the stock price drops buy more. Using a stock's volatility as a measure of risk is nuts. This is why I love Munger. He tells 95% of the investing community that they are nuts. Mathematical models and all that is for nuts people. Just look at the margin of safety, the value, the earnings and you'll do good. Continuing on volatility. Volatility is an overworked concept. You shouldn't be imprisoned by volatility. Some great businesses have very volatile returns for example. Seas usually loses money in two quarters of each year and some terrible businesses can have steady results. If you find companies that over the long term are stable but in the short term are cyclical, take advantage of how the market sees. Everybody likes stability however you can really make money in volatility. Munger continues we don't give a damn about lumpy results. Everyone else is trying to please Wall Street. This is not a small advantage. From the comments I get a lot of stability, dividend, I'd make 20% a year. You can't make 20% a year every year. You can make 20% on average if you one year you make 60% and the other 0%. Don't expect stability. A lot of judgement, a lot of discipline and an absence of hyperactivity. I think most intelligent people can take a lot of risk out of life. Very simple. Judgment, rationality, hard work, discipline and don't overdo it. Don't get over excited in investment. Each person has to play the game given his own marginal utility considerations and in a way that takes into account his own psychology. If you don't like losses, if losses make you miserable avoid investments. Very simple. So adapt your strategy to your own nature and your own talents. Trying to follow somebody is not good. There is no one size fits at all investment strategy. So even when you watch this channel try to learn fit what fits for you and that's it. For example, excellent quote. If we'd use the leverage that some others did Berkshire would be much bigger but we would have been sweating all night. It's crazy to sweat all night. I want to get rich so I could be independent and so I could do other things like give talks on the intersection of psychology and economics. The main difference between Munger and Buffett. Buffett wants to be the richest in the world. Munker wants to enjoy his life with having enough money. On overvalued markets there is a lot to be said that when the world is going crazy to put yourself in a position where you take risk off the table. So always focus on taking risk off the table. Can you invest in this environment? So in 2017 stocks are extremely risky so think about taking risk off the table especially if you're well off and rich. Here's one truth that perhaps your typical investment council would disagree with. If you're comfortably rich and some else is getting richer faster than you buy for example investing in risky stocks so what someone will always be getting richer faster than you but don't risk to lose your shirt to run after other people. Very important quote. Always compare investments what we have been doing with a table at the end of each stock analysis video. Intelligent people make decisions based on opportunity costs. In other words it's your alternatives that matter. That's how we make all of our decisions. Opportunity cost is a huge filter in life. If you got two suitors who are really eager to have you and one is way the hell better than the other you don't have to spend much time with the other.