The simple genius of Charlie Munger:
“All intelligent people should think primarily in terms of opportunity cost. When deciding whether to do something compare it with the best opportunity you have.”
from farnanstreeetblog.com
Every finance decision, in fact every decision, has to be compared with the opportunity cost associated with the next best decision. Any use of time has to be compared with the next best alternative. Every decision has to be compared against other options every day. This is not supposed to drive a decision maker crazy because there are costs with changing decisions. Still, the idea of continuously measuring the opportunity cost is the basis for improving the use of time, energy, and money.
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