At 98, Munger is as sharp as ever.
His recent 2-hour sharing at $DJCO was 🔥
Talked about $BABA, $COST, $ATVI, crypto, interest rates, envy, antitrust, the great resignation, growth vs value investing and MORE.
Here are my notes:
1. Let's get the white elephant out of the room and talk:
$BABA
Why invest in China? And why Alibaba?
To find out more about $BABA without going through 10 years of annual report, check out my deep-dive here.
More than 20,000 people have viewed it in 7 days.
steadycompounding.com/investing/Alib…
2. It's no secret that Munger has a contempt for crypto
While there are legitimate use cases (IMO), Munger hates the negative spillover it brings.
3. On whether there'll be a major interest rate increase
Japan managed to maintain low interest rates and reduce their debt without compromising their living standards.
But we're not sure if the U.S. can pull off the same trick.
Here's why:
4. On diversification
Munger has mad concentration.
He feels that good companies are hard to come by and we're lucky if we can get 4 good assets.
IMO that extreme level of concentration isn't for most people.
Because we ain't sharp as Munger and the volatility isn't for most.
5. On $BRK stake in $ATVI
He has great admiration for the CEO.
The thesis wasn't based on the metaverse.
It was simply that the existing tailwind of the gaming industry is huge.
6. On antitrust against big tech
He would rather not weaken the top tech companies in the U.S.
And that we should be proud of these assets.
7. His thoughts on the Russell 2000 falling off 15% off it's all-time high
TLDR; he doesn't give a shit.
Expect sharp downswings when you are investing.
8. Thoughts on the great resignation
Working habits are changing & many prefer WFH arrangements.
And the government dished out too much welfare.
People work to avoid the agony that comes with unemployment.
When that is taken away, it becomes disruptive.
9. We rationalize our misbehaviors
On why misbehaviors are so rampant in the finance and wealth management industry.
10. On the newspaper industry
They were the fourth branch of the government and there used to be quality journalism.
Their demise was replaced by media outlets that focused on pumping out crazy headlines.
Unfortunate.. but inevitable.
11. On Costco
It is overvalued now. But if you have a long time horizon, your returns will equal the business' return on capital (ROC).
Hence, Munger is ok with buying $COST today if he had a 30 to 50 year time horizon.
12. On holding cash
If there weren't capital gains tax, would he go to cash today?
I presume the question was asked because of the uncertain interest rate environment, inflation fears and high asset valuation.
Here's what Munger have to say:
13. Dividend investing vs growth investing
Investing style is a personal thing.
IMO, it depends on your:
• temperament
• stage of life
•capital size
That said, always focus on total shareholder returns, not just returns from dividends.
14. Why are people unhappy?
Despite the quality of life improving significantly across the board, people are still unhappy.
Reason: Envy
"I have conquered envy in my own life. I don't envy anybody. I don't give a damn what somebody else has."
Mic drop 🎤
15. The secret to a happy life?
Low expectations.
16. Who does he admire the most?
1️⃣ Lee Kuan Yew
2️⃣ Otto Bismarck
That's the end of my notes!
I hope you enjoyed it.
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I write about business breakdowns, investing concepts and mental models!
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