“Why would you risk what you have and need for something you don’t have and don’t need?” Charlie Munger at the Annual Meeting of the Daily Journal of Commerce today. He was referring to a smart person who lost everything for the second time in their life despite being wealthy.
“The existing US health care system is out of control on the cost side and it causes a lot of behavior which is not just regrettable; it is evil. Of course, that’s a very difficult thing to take on since there are a lot of vested interests. I don’t know how it will work out.”
US Health care system is harmed when people do things that are the equivalent of vultures feeding on a carcass. He gave the example of the near dead getting dialysis who will never wake up. “It’s not right to bleed so much money from the system.” Changing incentives is essential.
Charlie Munger said GE's problems were made worse by its practice of rotating executives through different assignments like it was part of the Army. He said the Berkshire system where people stay with a single business is a better system.
“What big businesses have in common is that they get very bureaucratic. That creates a lot of errors. I don’t have a substitute for it. I don’t know how to fix a bureaucracy in a very big business. If a business is already bureaucratic , how do you make it un bureaucratic?"
“This current ‘choose your idiot’ form of newsgathering we have now I don’t like.” He said a system composed of media which expresses extreme positions on all sides catering to people who already agree with them is harmful. He prefers a Walter Cronkite style approach to news.
On airline investments: "It's a good idea to change your mind when the facts change. To some extent the facts have changed, and to some extent they haven't." “One problem high speed rail has is the service competes against something that works pretty well in the US: airplanes.”
“Macroeconomics is a very peculiar subject... it doesn’t work like physics where the same rules over the decades will apply.” Charlie Munger today at DJCO meeting
He said no one would want to trade places with him since “he would soon be dead.” He described a 94 year old woman who told a crowd that she was "not only glad to be there but glad to be anywhere.” Uses a cane but his mind is still razor sharp.
A little girl with a lisp goes into a pet shop and asks: "Excuthe me do you have any widdle wabbits?" The shopkeeper answers: "Do you want a widdle white wabbit or a bwown one?" The little girl leans forward and whispers: "I don't wealy fink my pyfon gives a shit about color.”
He told that joke after someone asked whether he wanted to be a comedian. He said that humor was an important part of dealing with how hard life can be. Recommended that people put their head down and do they best they can today and if they did that the future would be pleasant.
Someone asked Munger if he would like to own a brand name like Tiffany. “Of course, but it would need to be offered at an attractive price.” Being a quality business is not enough to make a stock an attractive investment. He said consumer brands are worth less than they once were
When asked for his view on whether the current valuations of FANG stocks were too high or too low Munger said: “I don’t know. Next question.” This response by Munger is “circle of competence” in action. A critical contributor to investing success is not making stupid mistakes.
All quotes in this thread are written from memory and are not exactly what he said. I was multitasking when listening and it is 6 hours later. They are my best recollection. Hopefully an actual transcript will appear.
Remember Charlie Munger is the “Abominal No Man” part of BRK and he was asked hard questions. He said investing is harder now than when he started. He said that with not huge amounts of money in less trodden areas outperformance was possible. AUM size makes outperformance harder.
“About 2% of the people in the world provide 60% of the humor” said Charlie Munger at the meeting. Next Saturday my post is about Snoop Dogg who also is from southern California. Snoop is a “Rolling 20s Crip” and Munger is part of the notorious Pasadena “Peanut Brittle Gang.”
