And the next time around the poor will get richer faster than the rich. Shareholder Letter The stock has gained so much this year and last year. Could you give more examples both good and bad ones from your personal observations or through vicarious readings? That way, whatever happens, he feels smart. Give me a new question. But, of course, its a very difficult field. Or, has the digital revolution caused enormous productivity improvements in those businesses? SVB Shareholder Action Reminder - MarketWatch So we were like an undertaker who suddenly got prosperous in a plague year. The mantra he said over and over again is very simple. WebThe U.S. economy is strong. And I think wise people should just stay out of them. And thats the right way to do it. Daily Journal What are the psychological implications of this type of market behavior? 02/16. Data may be intentionally delayed pursuant to supplier requirements. Im satisfied with the way things have worked out and Im not gnashing my teeth when other people are doing better. Theyre just very simple. Nobody was trying to make the rich richer. In display advertising, for example, we now utilize a very friendly company that worked with us for 25 years and now they are helping us sell advertising. Question: How do you control your investments in a world where reasonable companies with a good image like General Electric sink rapidly into the bottomland of the stock market. Opportunities to invest in underpriced stocks (banks in 2009, in particular, I believe) Nothing is very So, you can understand why Warren got disenchanted with Wells Fargo. WebDaily Journal. I dont define that as value investing. Charlie Munger: I cant think of a We paid high prices for some little companies in the course of trying to enter the court software business. On December 18, 2020the record datethere were 1,380,746 shares of common stock of the company outstanding. Capitalism is almost as brutal as that. Charlie Munger: Well, I so rarely hold a company like BYD that goes to a nosebleed price that I dont think Ive got a system yet. Charlie Munger Speaks at the Daily Journals Annual Shareholders Meeting Interview of Charlie Munger by CNBCs Becky Quick, who selected and read a pair of questions from me. Of course, if he had a chance to do it over again, he would avoid those mistakes. All rights reserved. BYD stock did nothing for the first five years we held it. Has there been anything that has surprised you, and what would be your best advice to someone starting a business now? <>>> Because value investingthe way I conceive itis always wanting to get more value than you pay for when you buy a stock. Of course, we accomplished quite a bit working together. And, he was very good company and a splendid gentleman. It wasnt some malevolence of the rich that caused it. 1 0 obj But, no, I dont think Treasury securities are a big problem. Question: How important is the analysis of company culture in the investment process? Due to the COVID-19 SHAREHOLDERS ARE URGED TO DATE, FILL IN, SIGN, AND MAIL THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. Change value during other periods is calculated as the difference between the last trade and the most recent settle. I recommend that other people follow my example. We always want to get the facts right. Question: What advice would you give to someone who is trying to stay within their circle of competence but finding that the pace of technical technological innovation is rapidly reducing that circle? I think the Chinese were very smart. I think this kind of crazy speculation in enterprises not even found or picked out yet is a sign of an irritating bubble. Charlie Munger: Well, Lee Kuan Yew had the best record as a nation builder. I think when difficulty comes, I expect to have my share. And another shareholder asked: Dear Mr. Munger, please share your thoughts on the recent /r/WallStreetBets GameStop short squeeze. Question: Should there be a tax on buying stock now that Robinhood trades are free? But I dont think everybody can be a great investor or a great chess player. It was absolutely incredible. Questions: Many major businesses and high net worth individuals have been leaving California. Its a very dishonorable low-grade way to talk. A lot of people assume that since England led the Industrial Revolution and had free speech early that free speech is required to have a booming economy as prescribed by Adam Smith. Thats what weve been doing throughout my whole lifetime. But, a very wise man said on an earlier occasion: The trouble with banking is that we have more banks than we have bankers. At the age of 97, Charlie Munger wasnot surprisinglysharp as a tack. He gasped and said, but hes never had anything to do with newspapers or anything else. I do think that a properly run bank is a great contributor to civilization and that the central banks of the world like controlling their own banking system and their own money supplies. Its too volatile to serve well as a medium of exchange. 4 0 obj Charlie Munger: Ben Franklin was one of the wisest men who ever lived. Thats the reason he rose so fast in life. << /Filter /FlateDecode /Length 2607 >> Its difficult, but its not impossible investing in bank stocks successfully. Question: Its been a year since the coronavirus pandemic came to the U.S. What have you all learned about running a business in the past year? And I think both of us have done the same thing; we just suck it in and cope. I dont think Ive got any great insight about hydrogen. He knew everybody and everything. Key Points. Change value during the period between open outcry settle and the commencement of the next day's trading is calculated as the difference between the last trade and the prior day's settle. I think theyre a bad investment when interest rates are this low. Youll remember that when the first big bubble came, which was the South Sea bubble in England back in the 1700s, it created such havoc eventually when it blew up that England didnt allow hardly any public trading and securities of any companies for decades thereafter. Because we have the proxies those directors are now reelected. So its a very theoretical discussion. At times in my life, I have put myself to a standard that I think has helped me: I think Im not really equipped to comment on this subject until I can state the arguments against my conclusion better than the people on the other side. And we immediately ascended, we put Gerry in, and hes made every decision wonderfully ever since. Books to Berkshire Hathaway Shareholders So far the evidence would be that maybe the monetary modern monetary theory is right. The one thing I will say is that a lot of the moats that looked impassable, people found a way to displace. Charlie Munger: Im sure some are, but, by and large, thats not what Warren is known for. Were not enlarging it. WebMunger's terse letter to Daily Journal shareholders. They do way more good than harm. And, as Gerry has just said to me just after breakfast, you wouldnt want to invest in a parking lot by a courthouse for the future because an awful lot of the court proceedings are going to go to the internet. Charlie Munger: We will not be following Tesla into bitcoin. The death tax in China is zero. KWOT].AfOJQ=3U'(Jn6c3fBvvv[#"vsjQog:}CcS?t*Zh|gB;k1xER6fxE5fI6UVFs7v=ViHmg"qTELgJD(2*Q. At this rate, I dont think we have any great gift at making macroeconomic predictions. Charlie Munger downplays risk of Taiwan invasion, says Copyright FactSet Research Systems Inc. All rights reserved. Shareholder I dont think Gerry is surprised that the people doing the workMaryjo and Dannyare doing well. April 14, 2022. And some bankers yield to the temptations. A lot of things are going to change. And what he does is he sells about half of them always. The former majority owners of Bank of Blue Valley and Morill & Janes Bank, Bob Regnier and Kurt Saylor respectively, both signed the shareholder letter. The wealth management industry has a crisis on its hands. And I think the directors of GE deserve a lot of credit for making Larry Culp the CEO. Its been amazing that one little company starting up not that many decades ago could become as big as Costco did as fast as Costco did. I kind of admire the way Bill takes on these very hard problems. Question: What are Mr. Mungers thoughts on the recent GameStop short squeeze by social media and the resulting implications on short selling in the future? Thats what the communists are doing. However, could you be more specific? One of the interesting things about the Daily Journal is that we made all that money in the foreclosure boom. I feel the same way about those choices. And we cant go to many offices because theyre closed. What do you think the long-term consequences will be? I tell a story on Rick that he took the Navys IQ test and got one of the highest scores ever recorded and left early. What Jamie Dimon sees in JPMorgan, Wall Street future of work April 15, 2021 Dear Partner: The Greenlight Capital funds (the Partnerships) returned -0.1%1 in the first quarter of 2021 compared to 6.2% for the S&P 500 index. Thats our system. And I just think it was academically inconvenient for them. That recognized reality and worked way better than what other people were doing. As a result of holding those two positions, we have a lower cost than anybody else and we make more money than practically everybody else. God knows it was difficult but I dont think its a mistake. Daily Journal Corporation - Shareholder/Analyst Call Charlie Munger: Well, its most egregious in the momentum trading by novice investors lured in by new types of brokerage operations like Robinhood. All we can promise is that were gonna try and so far as I can tell, were doing pretty well. WebDaily Journal Corp. balance sheet, income statement, cash flow, earnings & estimates, ratio and margins. He absolutely took over a malarial swamp and turned it into modern Singaporein his own lifetime. Or, is it impossible to realize a deterioration quickly enough to exit without a loss? This helped drive average monthly order frequency higher in Q4 on both a Q/Q and Y/Y basis. Question: You often advocate for learning from other peoples big calamities and stupidities. If you dont spend the money, you and your heirs get to spend it eventually. So he married her. And by the way, I think its hard to teach. And it was probably wise that we acted exactly as we did. Ill paraphrase here. Charlie Munger: I think Warren and I are better at buying mature industries than we are at backing startups like Sequoia. Charlie Munger: Well, I consider that very unlikely. But the accountants are duly elected. And, we are really interested in doing a good job in Australia, in California, and all the other places where people have trusted us. Its very difficult to hire reporters in the San Francisco area with all the demands coming from the internet companies wanting to have an editorial product. Will we have fewer gas stations or truck stops in the future? And we probably have more of those shortcuts than others. Any tips for someone who wants to work on and improve their ability to hold two opposing views at the same time? But, of course, I think there will be more automation in transportation of all kinds in the future. Question: The Federal Reserve appears to be supporting asset prices. In his early education, he was the second-ranked student in the school. But he was 90 years of age. Have you met Lee Kuan Yew in person? If youre willing to count small nations in the group, he had probably the best record that ever existed in the history of the world. I think you should try and make your money in this world by selling other people things that are good for them. And, what about passive investing? Sure, we all love the kind of civilization we have. You can hardly think of anything more important in life than being reliable for the people who trust you. Charlie Munger: Well, thats a very good question. Im not saying that oil and gas is going to be a wonderful business but I dont think its going away. And its really stupid to have a culture that encourages as much gambling in stocks by people who have the mindset of race track betters. Charlie Munger: Well, I cant top Lee Kuan Yews example. Question: Which do you think is crazier? I tend to avoid the ones which Im not good at and Im not good at a lot of different problems. By the way, thats not the normal outcome in America. So, its a serious problem. Gerald Salzman: None. And if there is one thing the world could learn from Singapore, what would that be? And, of course, I think its vastly stupid for any state to be user-friendly to the rich people. And if you believe Jeff Bezos is one of the best businessmen you have ever known, would you consider investing early in any of the new projects he will inevitably focus his attention on now that he will not have to be as concerned about the day to day responsibilities of Amazon? It plans to build about 50,000 EVs in North America in the first half of We focused and de-risked the company through strategic portfolio actions, significantly accelerated our debt reduction, Thats entirely due to the practical talent of Lee Kuan Yew. Cookie Notice endobj Sources: CoinDesk (Bitcoin), Kraken (all other cryptocurrencies), Calendars and Economy: 'Actual' numbers are added to the table after economic reports are released. But, of course, if we got a chance to do it again, we would do it better. Sources: FactSet, Tullett Prebon, Commodities & Futures: Futures prices are delayed at least 10 minutes as per exchange requirements. Are they more stable? Warren Buffett is set to release his annual shareholder letter Saturday morning along with the conglomerates quarterly earnings. Last year it quintupled. But Henry was a genius. And when the evidence came in that the system wasnt working very well because some of the employees were cheating some of the customers, they came down hard on the customers instead of changing the system. Charlie Munger: Well, the people doing the computer software are doing magnificently wellthe people under Gerry: Maryjo and Danny. With that one exception, Ive stayed out of Sequoias business because theyre so much better at it than I would be and I dont know how to do it the way they do it. Were going to bust our ass to try and do a good job. 2021 Its one of the most ignorant professions in the world. I dont know the answer. For a quarter in which we made only a handful of portfolio changes and essentially broke even, lot What little newspaper company has come through the crisis of this destroying of all the newspapers better than the little Daily Journal? I dont think that hydrocarbons are going. Without the method of learning, youre like a one-legged man in an ass-kicking contest. Thats an interesting example of self-learning. The psychology professors dont know all that much about the rest of knowledge and they have no incentive to master it. For shareholders and others who are interested, a book that compiles the full unedited versions of each of Warren Buffetts letters to shareholders between 1965 and 2014 is available for sale at this link. Im Charlie Munger, Chairman, and to my right is Jerry Salzman, CEO. And I was like Rip Van Winkle; when I tried to come back to it, I found that the world had changed. In his closely read annual letter to shareholders, Jamie Dimon says he expects no more than 10% of JPMorgan employees to permanently work from Of course, its hard to know what the future holds when in a complex system where you cant predict a lot of things. I think most people are born with a happystat. Considering their system, that is not what he should have been doing. Question: [The questioner] quotes a commencement address you gave in 2007 at USC Law School. Sources: FactSet, Dow Jones, Bonds: Bond quotes are updated in real-time. So, its a very interesting competitive field. Has the quality gone down? They just copied Adam Smith and left out the free speech and it worked fine for them. Charlie Munger: Ladies and gentlemen, wherever you are, via Yahoo finances website.
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