“The first rule of compounding: Never interrupt it unnecessarily.”
- Charlie Munger
I love this Munger quote. (h/t to @LiviamCapital). I may have it pinned on my wall. (Right next to another Munger quote I have on my wall: “The goal of investments is to find situations where it is safe not to diversify.”)
I thought about Charlie’s first rule of compounding the other day when a friend asked if I trimmed a position that has run quite a bit this year.
I haven’t touched it.
Why not? Shouldn’t I trim when something becomes “expensive”? Shouldn’t I put the money in something “less expensive”? Isn’t that what “active managers” do?
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