Thread by @trengriffin

1/ Charlie Munger: "We invested money in China. I feel about Russia the way Gundlach feels about China. I don’t invest in Russia so I can’t criticize Gundlach’s point of view. I reached a different conclusion. If he’s nervous, he doesn’t have to join us." junto.investments/daily-journal-…

2/ "On balance, we prefer the risks we have to those we’re avoiding and we don’t mind a tiny little bit of margin debt. When you buy Alibaba, you do get sort of a derivative. But assuming there’s a reasonable honor among civilized nations, that risk doesn’t seem that big to me."

3/ Charlie Munger: "We’ve gotten an absence of world wars for a long time because we had these nuclear weapons. But it does make you nervous every once in a while and it’s quite irresponsible when the leaders in the modern age get tensions over border incidents and so forth."

4/"An old guy is entitled to invest where he wants to invest. It’s okay to have some things that you just don’t want to bother with. I have all kinds of places where I’m just like Warren and I have all kinds of things where I’m not comfortable and I just don’t go near them." CM

5/ Charlie Munger: "We have a stock market that some people use as a gambling parlor. There are transactions of the people who love the gambling parlor aspect of the business and those who want to make long-term investments, take care their old age, and so forth."

6/ "Everybody loves it because it’s like a bunch of people at a party having so much fun getting drunk that they don’t think about the consequences. A lot of people like a drunken brawl and so far those people are winning. A lot of people are making money out of our brawl." CM

7/ Charlie Munger: "If I was the dictator of the world, I would have some kind of a tax on short-term gains and drive out this marriage of gambling parlor and legitimate capital development of the country. It’s not a good marriage and I think we need a divorce."

8/ Charlie Munger: "Getting more value than you pay for is what investment is. If you want to be successful, you have to get more value than you pay for. Now, you can get a whole body of people that don’t really know what they’re buying. They’re just quotations on a ticker."

9/ "We know from what’s happened in other nations that if you try to print too much money, it eventually causes terrible trouble. We are closer to terrible trouble than we’ve been in the past but it may still be a long way off. There’s never anything like what we’re doing now."

10/ Munger: "I wouldn't predict our modern politicians will be as willing to permit a new Volcker to get that tough with the economy and bring on that kind of recession. New troubles are likely to be different from old troubles. The troubles could be worse and harder to fix."

11/ Charlie Munger: "We’ve done something pretty extreme. And we don’t know how bad the troubles will be—whether it’ll gonna be like Japan or something a lot worse. What makes life interesting is that we don’t know how it’s gonna work out."

12/ "You have a bunch of interest-bearing debts and you pay them off with checking accounts on which you’re no longer paying interest. Think of how seductive that is for a bunch of legislators. You get rid of the interest payments and the money supply goes up. Seems like heaven."

13/ Charlie Munger: "Of course, when things get that seductive, they’re likely to be overused. Well, it may be that you have to choose the least bad of your options. That frequently happens in human decision making."

14/ "The Mungers have Berkshire stock, Costco stock, Chinese stocks through Li Lu, a little bit of Daily Journal stock, and a bunch of apartment houses. Do I think that’s perfect? No. Do I think it’s okay? Yes."

15/ Charlie Munger: "You’re lucky if you got four good assets. If you’re trying to do better than average, you’re lucky if you have four things to buy. To ask for 20 is really asking for egg in your beer. Very few people have enough brains to get 20 good investments."

16/ "If there were no global warming problem, I would be in favor of exactly what the government is now doing which is encouraging a hell of a lot more solar and wind. The petroleum has enormous chemical uses in fertilizers, chemistry, and so on. It’s precious stuff."

17/ "I regard the petroleum in the United States about the way I regard the black topsoil of Iowa: I regard it as a national treasure. Just as I am not in favor of sending all the topsoil down and dumping it in the ocean, I’m not in favor of using petroleum as fast as possible."

18/ Charlie Munger: "If we get lucky [COVID] will fade away to a minor problem. We kill 30,000 people a year with flu in the United States. Suppose that was 60,000 including Omicron. I think we get used to it."

19/ Charlie Munger: "My way in life isn't predicting little short-term differences between the Russell index and the Standard and Poor’s index. I don’t have any opinion about which index is better at a given time. I never even think about it."

20/ "If you’re gonna invest in stocks for the long term, or real estate, of course there are going to be periods when there’s a lot of agony and other periods when there’s a boom. I think you just have to learn to live through them." Charlie Munger

21/ Munger: "You have to deal with daylight and night. Does that bother you very much? No. Sometimes it’s night and sometimes it’s daylight. Sometimes there’s a boom and sometimes there’s a bust. I believe in doing as well as you can and keep going as long as they let you."

22/ "An awful lot of people have gotten used to not being in the office five days a week. I think a lot of those people are never going back to five days a week. It’s amazing the percentage of the people in computer science that don’t want to be in the office for a normal life."

23/ "I don’t think the average corporation is going to fly its directors around so they can sit at the same table for every meeting of the year. Maybe it will have two meetings where the directors are together.

I think a lot of [Covid driven charge is] going to remain forever."

24/ Munger: "If your job in life is to get on the telephone and talk to other engineers all over the world while you solve problems, why do you have to do it from an office? Every CEO I know is adapting somewhat to some people who work differently than they did in the past."

25/ "You don’t see the Catholic Cardinals suddenly deciding there’s no afterlife. But that’s what Deng Xiaoping did. When the Chinese went away from collectivist agriculture and let each peasant have his own plot of land, the grain production went up 60% the first year."

26/ Munger: "When you hire somebody else to manage your money it’s very hard to get the job done right. The people making the decisions care more about their own families than they care about the people’s money they’re managing. That’s just the way human beings are constructed."

27/ "In my early days, I was a little bit on the fringes of the motion picture industry. And I would say practically everyone sort of took advantage of the shareholders. That was just the culture. That is just deeply into human nature that people are going to behave that way."

28/ Charlie Munger: "Maybe we should have a third party. Now we get these permanent careerist people with their safe districts. The only fear they have is in the primary if they face a nut who might throw them out. They don’t want any balanced sensible people in the legislature."

29/ "Of all the newspapers in the United States, most of them are going out of business. The Wall Street Journal will survive. The New York Times will survive. The digital newspaper of Thomson Reuters will survive. By the way, we’re gonna miss these newspapers terribly."

30/ "Each newspaper—all those local monopolies—was an independent bastion of power. The economic position was so impregnable, they were all monopolies. The ethos of the journalists was trying to tell it like it is. They were really a branch of the government. 95% will disappear."

31/ Munger: "We get a bunch of people who attract an audience because they’re crazy. I have my favorite crazies, you have your favorite crazies, we get together and all become crazier as we hire people to tell us what we want to hear. This is no substitute for Walter Cronkite."

32/ "Having these new journalists tell the nuts on each side—right-wing nuts and left-wing nuts—only what they want to hear and slant all the facts so that they hear a lot of stuff that isn’t so is not good for our republic. I haven't the faintest idea what to do about it." CM

33/ "We've had this enormous transfer of voting power to passive index funds. That is going to change the world. I don’t know what the consequences are gonna be, but I predict it will not be good. I think the world of Larry Fink, but I’m not sure I want him to be my emperor." CM

34/ Charlie Munger: "You can’t believe what a modern factory looks like when you fill it with robots. That’s coming more and more, and it’s coming to China Those trends are inevitable. I don’t know how it’s all gonna play out but I think it does create adjustment problems."

35/ Charlie Munger: "If you’ve got a company like Kodak and they invent something new that obsoletes your product,

You have a problem too, and you solve that by dying. A lot of people don’t like that solution. I don’t much care for it myself."

36/ "We don’t want to have a bunch of politicians just doing whatever is easy on the theory that it didn’t hurt us last time so we can double it and do it one more time. Then we double it again, and so forth. We know what happens on that everlasting doubling, doubling, doubling."

37/ Munger: "You're flirting with danger somewhere unless there’s some discipline in the process.
But I don’t regard Japan as in some terrible danger. They’ve done a huge amount of this and gotten by with it. I don’t think we’ll be as good at handling our problems as Japan is."

38/ Charlie Munger: "In my whole adult life, I’ve never hoarded cash, waiting for better conditions. I’ve just invest in the best thing I can find.

Berkshire is not doing that because it knows how to time investments. He just can’t find anything he can stand buying."

39/ Charlie Munger: "The reason we’re not buying is that we can’t buy anything at prices we’re willing to pay. It’s just that simple. Other people are bidding the price up. A lot of the buying is not done by people who really plan to own them. A lot of it is fee-driven buying."

40/ Charlie Munger: "Private equity buys things so they can have more fees by having more things under management. Of course, it’s a lot easier buying something when you use somebody else’s money. We’re using our own money, or at least that’s the way we think of it."

41/ "It's not a tragedy that Berkshire has some surplus money they’re not investing. To shareholders who are worried about the future because it looks complicated and difficult, I want to say to them: tell me what your problem is and I’ll try and make it more difficult for you.”

42/ "To everyone who finds the current investment climate hard, difficult, and somewhat confusing, I would say, 'welcome to adult life.'
It’s going to be way harder for the group that’s graduating from college now. It is going to be way harder than it was for my generation." CM

43/ Charlie Munger: "In my lifetime, 98 years, it was the ideal time to own a diversified portfolio of common stocks that updated a little by adding the new ones that came in like the Apples and the Alphabets and so forth. I’d say people got maybe 10 or 11% before inflation."

44/ "That was a marvelous return. No other generation in the history of the world ever got returns like that. And I don’t think the future is gonna give the person graduating from college this year nearly that easy an investment opportunity. I think it’s gonna be way harder." CM

45/ Charlie Munger: "The world is not driven by greed; it’s driven by envy. So the fact that everybody’s five times better off than they used to be, they take that for granted. That’s why God came down and told Moses that he couldn’t envy his neighbor’s wife or even his donkey."

46/ Munger: "Who the hell needs a Rolex watch so you can get mugged for it? Yet, everybody wants to have a pretentious expenditure. That helps drive demand in our modern capitalist society. My advice to young people is: don’t go there. To hell with the pretentious expenditure."

47/ Munger: "If you have unreasonable demands on life, you’re like a bird that’s trying to destroy himself by bashing his wings on the edge of the cage. You really can’t get out of the cage. Take life’s results good and bad as they happen with a certain amount of stoicism."

48/ Charlie Munger: "There’ll never be any shortage of good people in the world. All you got to do is seek them out and get as many of them as possible into your life. Keep the rest the hell out."

"I always say the same thing: have realistic expectations."

49/ Charlie Munger: "Warren and I are artificial, accidental gurus. I used to be sort of bothered by it because I don’t ordinarily make this many pronouncements. But I’ve gotten used to it and I hope you have too. It isn’t that we want to be the guru for the world or something."

50/ I hope you read this thread by thinking about how Charlie Munger thinks. Of course you won't agree with everything he said. I don't.

My book about Charlie Munger was intended to hep readers understand how he thinks. It isn't a biography. amazon.com/-/es/Tren-Grif…