It feels almost blasphemous to critique the investment philosophy of the late, great Charlie Munger. After all, he was the genius who grabbed Warren Buffett by the lapels and forced him to stop buying "cigar butts" (dying companies selling for cheap) and start buying "wonderful businesses at fair prices."

That shift created billions in wealth.

But here is the uncomfortable truth I need to share with you today: If you try to blindly copy that strategy right now, you aren't guaranteed riches. You might actually be setting yourself up for a decade of stagnation.

We all know what a "wonderful business" looks like. Academics and investors call this the "Quality Factor." These companies have:

These are companies for all seasons. They survive recessions and thrive in good times. It seems like common sense to buy them.

However, for these stocks to actually beat the market in the long run, they have to be underpriced when you buy them. And that is the hard part.

In a perfectly efficient market, everyone knows which companies are "quality." Because everyone knows they are safe and profitable, everyone wants to own them. This drives the price up.

For decades, there was a "premium" on quality stocks, but it was small. You could still find great businesses that Wall Street was ignoring.

Today? The secret is out.

Investors, terrified of economic uncertainty, have flocked to high-margin giants (think of the big tech darlings or dominant consumer brands). This has pushed their valuations to nosebleed levels. When you pay a Mercedes price for a Mercedes, you get a great car, but you don't get a bargain.

Let’s look at history to see why this matters.

In 1998, Coca-Cola was the ultimate "quality" stock. It was arguably the best brand in the world. Investors loved it so much they bid the price up to 50 times its earnings (an incredibly high valuation).

Buffett and Munger held on. It was their "wonderful business."

But the price was too wonderful. When the bubble deflated, it didn't matter that Coke kept selling soda and making money. The stock price had detached from reality. It took 13 years for Coca-Cola’s stock price to recover to its 1998 high.

If you bought at the top, you held a "quality" stock for over a decade with zero price appreciation to show for it.

We are seeing similar signs today. The "quality" sector is expensive compared to history because everyone is hiding there.

Does this mean you should buy junk? Absolutely not.

It means you must practice the rarest skill in investing: Patience.

Buying a wonderful business is only half the battle. The second half is waiting for a "fair price." Right now, the market is asking for a perfect price. The "Relax to Rich" approach isn't about chasing the hot quality stock everyone else owns. It is about keeping your powder dry and waiting for those rare moments when the market panics and puts those diamonds on sale.

I’d love to hear from you: Are you sitting on cash waiting for a dip, or are you still buying your favorite quality stocks at today’s prices? Hit reply and let me know.

Stay patient,

William