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How Charlie Munger found value investing success

Legendary investor Charlie Munger died Tuesday November 28th at the age of 99, leaving an indelible investing legacy crafted over decades alongside friend and Berkshire Hathaway leader Warren Buffett (BRK-A, BRK-B).

Munger was instrumental in shifting Buffett from lower-quality "cigar butt" stocks to premium businesses bought at fair prices, explains Jonathan Boyar of Boyar Value Group. Boyar credits Munger's influence as the catalyst for much of Berkshire's success, inspiring "a whole generation of investors," though he believes such performance is "never gonna be replicated again."

Interactive Brokers strategist Steven Sosnick says while Munger's exact style of value investing looks harder to execute presently given growth stock dominance, opportunities remain. In current markets, Sosnick suggests that investors look for growth stocks that exhibit value stock characteristics, such as Apple (APPL).

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

- Jonathan, let me start with you. A lot of focus on how Munger and Buffett invest, looking for attractive valuations on stocks. Can their approach be replicated right now?

JONATHAN BOYAR: Can their approach be replicated? Yeah it can be. But what differentiates it and is a great quote, Buffett once said that if he had just listened to Ben Graham and not Charlie, he'd be a lot poorer. And Charlie was an important teacher to Warren in the fact that he told him to invest in high quality companies at fair prices instead of doing the cigar butt type of investing that he was doing before. So that was a huge influence on Buffett's and Berkshire's investment success.

- Jonathan has-- did Charlie Margaret change your life? Is that why you got into this business?

JONATHAN BOYAR: I mean, there's a lot of different reasons why I got into business. But Berkshire Hathaway was an inspiration. I mean, he-- what they built was fantastic, and it's never going to be replicated again. And he was kind enough to write and publicly speak about all of his wisdom and share it with people. And that's something that I'm grateful for. And he inspired a whole generation of investors.

- At the same time, I got to say, Steve, bring bringing you into this, there are a lot of value investors out there, but it's not what's, sort of, trendy right now for sure, right. Like growth stocks have been outperforming pretty consistently. So how should we think about that then. The legacy of value investing when growth is so dominant.

- Well here's the key, Julie. One of their biggest investments is Apple. Which is a growth stock, but it's actually, I think actually morphing to a value stock in front of our eyes, but it's still priced like a growth stock. So you've got both aspects of it.

You know BYD was a value stock that-- was a growth stock that he bought at value prices. You know I think-- so that's really to me in many ways, the key is finding the opportunities where these are-- where there are value growth stocks being priced like value stocks. And Munger specifically was terrific at that alongside Warren Buffett.

Remember also I always appreciate the Mr. Inside guy. You know, somebody who spent most of his career sort of Mr. Inside, I like that he was Mr. Inside to Warren Buffett's outside and, sort of, the guy who could propose things to him without fear of conflict or the guy who could say no to him, which there weren't probably many people who could say no to Warren Buffett.

- Jonathan, let me go back to you Charlie Munger, of course, not here. Passed away. But Warren Buffett once he leaves, for whatever reason, is there another group of investing legends that you look to. The reality is these two folks have trained generations of human beings on how to invest. Who takes that mantle now?

JONATHAN BOYAR: No one. They are in a class by themselves. They not only were great investors in buying pieces of paper, they bought entire companies and businesses and put them together and their legacy is going to be this company that's built to last for generations. But there's no one investor who's going to take the Charlie Munger or a Warren Buffett have that level of influence. It's you know we lost a legend.