“Good afternoon, Mr. Buffett and Mr. Munger…” my voice boomed out through the sound system with a half-second delay, making it almost impossible to remember my lines, memorized word-for-word. I continued:
“If you were 30 years old and had no dependents but a full-time job that precluded full-time investing, how would you invest your first million dollars, assuming that you can cover 18 months of expenses with other savings? Thank you in advance for being as specific as possible with asset classes and allocation percentage.”
Buffett let out a small laugh and began.“I’d put it all in a low-cost index fund that tracks the S&P 500 and get back to work…”
Their continued answer to my question:
“…Put it all in a low-cost index fund like a Vanguard 500.” Munger: “Professionals take croupier profits out of the system. No one will give you this advice [index funds] because no one gets paid for it.” Munger: “The whole secret of successful investing [full-timers] is non-diversification. If you know nothing –> diversity.” Buffett: “There are situations, for the full-time investor, where it’d be a mistake not to invest 50% of your net worth in one business.” If more aggressive: small stocks and specialized bonds, but no currencies.
Best books to read for investing and life? — (B) Chapters 8 and 20 in The Intelligent Investor. (M) Anything by Ben Franklin.