The Warren Buffett CEO by Robert P. Miles. Charlie Munger: We will not be following Tesla into bitcoin. So, I dont mind a little inequality and what I notice is that the rich families generally lose their power and wealthand pretty fast. I dont think that hydrocarbons are going. We admire the company and like its position. Heres a full transcript of the entire meeting. Copyright FactSet Research Systems Inc. All rights reserved. They do way more good than harm. We love it anyway. Costco I do think has one thing that Amazon does not. Question: I enjoyed your Caltech interview and wanted you to elaborate and provide more insights on your point of great investors and great chess players. Question: Charlie, you have been a long-time admirer of Singapore and Lee Kuan Yew. I admire him that much. Could you give more examples both good and bad ones from your personal observations or through vicarious readings? But theres no rule that life has to be easy on the mental side. But, of course, its a very difficult field. And I was like Rip Van Winkle; when I tried to come back to it, I found that the world had changed. I said it wont matter. Question: In your past speeches, you have mentioned the term functional equivalent of embezzlement to describe situations where bubbles can form because both parties involved in a bubble believe the asset to be worth more than it truly is. Never before in the history of mankind have we seen such a rapid eradication of poverty, pulling approximately 800 million people out of destitution. So human greed and the aggression of the brokerage community create these bubbles from time to time. WebThe Annual Meeting of Shareholders of Daily Journal Corporation (the Company) will be held virtually on February 16, 2022 at 10:00 a.m. Pacific Time. On the other hand, the buses in Los Angeles work on natural gas. Classified advertising is down significantly. In other words, to some extent, its a self-correcting system. I just see more and more of the rich people leaving. I think Im a little more lenient. BYD sells at nearly 200 P/E. Daily Journal Corp : Submission of Matters to a Vote of Security Holders (form 8-K) AQ. 24 Feb 2021 Charlie Munger, Vice Chairman of Berkshire Hathaway, speaks at the Daily Journal Annual Meeting 22 Jan 2021 Warren Buffett's right-hand man flags a Source: FactSet, Indexes: Index quotes may be real-time or delayed as per exchange requirements; refer to time stamps for information on any delays. But, of course, you should start out by studying the history of capitalism, how it worked, and why before you start studying business. Just think of the things that were once prosperous that are now in failure or gone. WebCharlie Munger: 2022 Daily Journal Annual Meeting Transcript Written by Oliver Sung I usually sit down and transcribe the Daily Journal AGM with the musings and wisdom of I think I would have lived a long time if I had lived a different life. Thats what weve been doing throughout my whole lifetime. All the good things. Of course, that will still work. And that isnt necessarily right for its customers. We were trying to save the whole economy under terrible conditions. But, of course, I think there will be more automation in transportation of all kinds in the future. All except for the legal advertising system which we had to build because nobody else has the volume that we have. And, of course, thats a very dangerous way to invest. The wealth management industry has a crisis on its hands. People really trust Costco will be delivering enormous value. We are in fact being a more difficult type of software business than Microsoft. And I dont know whether hes right or not. I dont think Ive got any great insight about hydrogen. The meeting will come to order. Charlie Munger: Well, these things do happen in a market economy. The votes in favor of that are 995,356 against 120. On the other hand, as you say, I didnt get rich by buying stocks at high price-earnings multiples in the midst of crazy speculative booms. What is interesting is that in wealth management, a lot of people think that if they have a hundred stocks theyre investing more professionally than they are if they have four or five. Charlie Munger spreads wisdom at the annual meeting for the Daily Journal. And he was a great kidder. And when the old CEO of the Daily Journal died, Gerry was managing the business affairs of the Munger Tolles law firm. So, the shareholders have been lucky to have somebody like Gerry here who could learn what he didnt know and fix it. Charlie Munger: Well thats an easy one. Value Investing will never go out of style. But Henry was a genius. GE released its 2021 Annual Report today. And thats very interesting. Tom Murphy used to say that his system of management was to delegate just short of total abdication. Just time after time he would do something like that. 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. Is it digital wallets like PayPal, Square, or Apple Pay? Youre better off concentrating your decision power on one person the way the Li Lu partnership does and then choose the right person. He didnt know one damn thing about the Daily Journal when we made him head of it. And if you stop to think about it, that is also true at the Daily Journal. By rejecting non-essential cookies, Reddit may still use certain cookies to ensure the proper functionality of our platform. Have you considered amending this quote or lowering your standards? Charlie Munger: Well, Im constantly making mistakes where I can, in retrospect, realize that I should have decided differently. Considering their system, that is not what he should have been doing. So, you can understand why Warren got disenchanted with Wells Fargo. Of course, that history is useful to know. Question: Given all of your donations to physics, what is your favorite way of applying physics to societys problems and also to investing? I recommend that other people follow my example. Charlie Munger: I think Ill skip that one. And, I think Jack Ma was very arrogant to be telling the Chinese government how dumb they were, how stupid their policies were, and so forth. As for some of our technology, like eFiling for example, the courts are closed. The stock appreciated probably way more than intrinsic value. Charlie Munger: Well, the business around here that has the most promise is our software business automating the courts. The hydrocarbons are also needed as chemical feedstocks. Question: Is the oil and gas industry the new newspapers? The former majority owners of Bank of Blue Valley and Morill & Janes Bank, Bob Regnier and Kurt Saylor respectively, both signed the shareholder letter. And, of course, its all worked. In other words, I think the system of checks and balances and elections that our founders gave us actually gave us pretty much the right policies during my lifetime. I think office buildings are now in some trouble and, of course, commercial real estate rented to stores has been in a lot of trouble for a long time. I dont even know how much more difficultor how much more dangerousit would be to deal with hydrogen than it is to deal with gasoline which is also a dangerous substance. And if youre selling them gambling services where you make profits off of the top, like many of these new brokers who specialize in luring the amateurs in, I think its a dirty way to make money. I dont think its easy for ordinary people to become great investors. No, I dont have any secrets. Of course, his son, who is a bright man, is now Prime Minister of Singapore. Youre right. So, its a very interesting competitive field. But, of course, if we got a chance to do it again, we would do it better. 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? Do you agree that there is a close parallel to the late 90s and that this, therefore, must end badly?. You're watching Yahoo Finance, live for this special exclusive coverage of the If you were offered a fresh start today, what would you do differently in life and in investing? So its very difficult. WebMunger's terse letter to Daily Journal shareholders. All those factors come into play and if you go back a little further, we eliminated California Lawyer magazine and we had one time a newspaper in Seattle and one in Denver. And even if you have a natural gift, you cant be good at it unless you start playing at a very young age and get huge experience. And, I was not surprised when it blew up. Dec 2021 Mar 2022 Jun 2022 Sep 2022 Dec 2022 Total If you stop to think about it, business success long term is a lot like biology. Thats true whether youre Benjamin Franklin or Joe klutz. WebDaily Journal Corp. balance sheet, income statement, cash flow, earnings & estimates, ratio and margins. Charlie Munger: I think Ive learned to avoid zoning work. And there was one woman who was a year older than he was who was the first-ranked student in the school. Charlie Munger: Well, I dont think its required that we be exactly the same on everything. Ill paraphrase here. Also, fortunately before the pandemic, we got out of the conference-type events and we were not subjected to the problems of no conferences nobody to attend. No one knows for sure just how much government intervention is wise and at what point the government should stop intervening. 02/16. All we can promise is that were gonna try and so far as I can tell, were doing pretty well. In fiscal 2021, we reached revenues of $50.5 billiona significant milestone that represents 11% growth in local currency and the addition of $6.2 Charlie Munger at the 2021 Daily Journal annual meeting spoke once again at great length. But its hard for anybody. 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. I think all good investing is value investing. I think theyre a bad investment when interest rates are this low. And thats the way Eugene was in his community. Thats very, very important. We would all say that. You get crazy booms. They have created a strong culture of fanaticism about cost, quality, efficiency, and honor. And I just think it was academically inconvenient for them. But we cant. When you look at whats happened in California [in terms of] the price of real estate and rentals, weve reduced the number of offices we have both for Journal Technology and for the Daily Journal. How do you reconcile the idea of paying 50 or 60 times revenue for a growing but unprofitable business with the more traditional value investing concept of a margin of safety? He loved to kid people. And so, the stock went way up. We hope theyll continue doing magnificently well. Generally speaking, people assume that were a normal software company like Microsoft or something. The psychology professors dont know all that much about the rest of knowledge and they have no incentive to master it. The stock has gained so much this year and last year. endobj I dont think its like the newspaper business. 3 0 obj And it was probably wise that we acted exactly as we did. We paid two and a half million for it. One is a big interest in Li Lus China fund, which is a limited partnership, and the other is a Vanguard index fund. If you dont spend the money, you and your heirs get to spend it eventually. 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. And thats the way we handled Gerry. Nobody should believe that Robinhoods trades are free. I love connecting with other curious nerds so if you have a comment to my article or want to introduce yourself, shoot me an email. And theyre all dyingevery damn one of them almost. Larry Summers has recently been quoted as being worried that were having too much stimulus. I think that that will probably continue. Every value investor tries to get more value than he pays for. To meet the surge in Im way more comfortable owning two or three stocks which I think I know something about and where I think I have an advantage. We do, as Charlie indicates, have a lot of travel. Key Points. Were not enlarging it. But he previously worked for Rick Guerin and me in running a little mutual fund that we bought control of. Question: What is the biggest lie currently being perpetuated by the investment complex? And I think the directors of GE deserve a lot of credit for making Larry Culp the CEO. Buffetts donations to the foundation have obviously helped to save many millions. WebIn 2021, for example, we paid$3.3 billion while the U.S. Treasury reported total corporate income-tax receipts of $402 billion.Additionally, Berkshire pays substantial state and foreign taxes. And if there is one thing the world could learn from Singapore, what would that be? You can hardly think of anything more important in life than being reliable for the people who trust you. You know what her mottoes were? You can argue that I got close to Sequoia when with Li Lu we bought into BYD. And I think that were crazy to allow it. Question: What have you done to live such a long life? In Singapore, you get a savings account the day youre born. Question: Mr. Munger is a champion of Chinese stocks. And, for example, here, we must have 30 or 40 deaths. And its rather interesting. Charlie Munger: Well, thats a very good question. <> Charlie Munger: Early 70s. I know Berkshire is a long-term owner and rarely sells securities of high-quality companies it owns in its portfolio simply because its overvalued. We bought all these buildings cheaply. I think when difficulty comes, I expect to have my share. Question: You identified the opportunity in electrification and invested in BYD. He really knew everything you had to do to avoid credit losses in a small town in Illinois. Have you seen the television show Queens Gambit on Netflix? Im satisfied with the way things have worked out and Im not gnashing my teeth when other people are doing better. In other words, its your money. The word 'customer' occurs 25 times. Youve said recently that Sequoia is the greatest investment firm ever. He was a one party system but he could always be removed by the electorate. 3 0 obj Dear shareholders: Over the past 25 years at Amazon, Ive had the And, of course, its regrettable. Charlie Munger: I dont think I have a lot of wonderful advice about starting a business but what youve learned in the pandemic is that we can do with a lot less travel and a lot more Zooming. Charlie Munger: Yes, I think that is rising as we sit here. Question: What is the biggest competitive threat to U.S. banks like Bank of America and US Bankboth equity holdings of the Daily Journal Corporationover the long term? So its a very theoretical discussion. Question: In 1999, the year the Daily Journal bought Sustain Technologies, the traditional business employed 355 full-time employees and 61 part-time employees. Change value during other periods is calculated as the difference between the last trade and the most recent settle. Charlie Munger: Real estate has always been a difficult field. By the way, the Harvard Business School, when it started out way early, they started out with a history of the business. [The questioner] would like to know what Charlies method of learning is. And it has saved Los Angeles a fortune because gas is so much cheaper than gasoline. Charlie Munger: Ladies and gentlemen, wherever you are, via Yahoo finances website. The first rule of a happy life is low expectations. Question: Why, almost two years ago, did you believe that Costco was the only U.S. stock worth buying? Without the method of learning, youre like a one-legged man in an ass-kicking contest. We have offices in all the major cities in California and also in Logan, Utah. Give me a new question. If I had stayed in Omaha, where I was raised, and gotten into the banking business, I would have been a hell of a good banker. Of course, if he had a chance to do it over again, he would avoid those mistakes. I would imagine that applies to the broad market too. endobj We made the rich richer, not as a deliberate choice, but because it was an accidental byproduct of trying to save the whole civilization. And that is why Costco presents some danger to Amazon. As a matter of fact, its not clear to me that China would have done better if theyd copied every aspect of English civilization. At this rate, Youve reached the limit of my circle of competence. Thats entirely due to the practical talent of Lee Kuan Yew. I think that the methods that Ive used including the checklists are the correct methods and Im grateful that I found them as early as I did and that the methods have worked as well as they have. Creating 360 value. Florida would have a really serious problem. Are they more stable? Charlie Munger: Its partly culture but a lot of it is just born in and its a quirk. We were together in that for a long, long time, and then Rick and I did the Daily Journal together on another occasion. As a matter of fact, what happens is to make a nation rich, you need a free market system. Charlie Munger: I think I had the right temperament. Because we have the proxies those directors are now reelected. 02/15. Gerald Salzman: None. Charlie Munger: Well, I dont participate at all. I have a very simple idea on the subject. In 2010, that was down to 165 full-time employees and 15 part-time employees. They dont work that hard at figuring out what works and what doesnt. :qpt1cMt8\2&avSY9-;S6 |jw&.\ "P/cdx>5[_:Vt _;hgf1!||tx8Oz}Y=eHcu65gl-T >Tkbb,OxW]Y?W8p`? LimT;IZ}La`9tFG;hB*4bI*Kt,U7e~kEVzVTmT$k*(4>uBXrW0L-MYz g\uz:~F ],ZgKUVyaq5muCWc*uNSS1e/~;$wqNw;jJkyVG*"ns*~e15{f +%>\o-^^U]UpJW',/ Ive been pretty quiet. 4. Theron Mohamed Jan 22, 2021, 11:41 AM Charlie Munger. Furthermore, hed gone through the Great Depression. Stocks: Real-time U.S. stock quotes reflect trades reported through Nasdaq only; comprehensive quotes and volume reflect trading in all markets and are delayed at least 15 minutes. I think the bankers of today could learn a lot from Eugene, but little is known of him. In a shareholder letter, Barra said 2023 will be a "breakout year" for GM's Ultium-based EVs. I think they would have come out worse because their position was so dire and the poverty was so extreme, they needed very extreme methods to get out of the fix they were in. He said, figure out what works and do it. Charlie Munger downplays risk of Taiwan invasion, says Charlie Munger: I dont know how permanent its going to be but it certainly caused a change. That doesnt happen. So, its a serious problem. And, he was very good company and a splendid gentleman. And would the Daily Journal consider Bitcoin or any other cryptocurrency as an asset on the balance sheet similar to what Tesla recently did? I think civilization would do better without it. Because even as a boy, I knew a lot about who was sound who wasnt sound in Ohama. Mutual Funds & ETFs: All of the mutual fund and ETF information contained in this display, with the exception of the current price and price history, was supplied by Lipper, A Refinitiv Company, subject to the following: Copyright Refinitiv. He was a very smart man. Reddit and its partners use cookies and similar technologies to provide you with a better experience. Of course, its hard to know what the future holds when in a complex system where you cant predict a lot of things. They lose their money fast enough. Web2021. It seems to involve a lot of your standard causes of human misjudgment. <>/ExtGState<>/XObject<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/Annots[ 18 0 R 19 0 R] /MediaBox[ 0 0 612 792] /Contents 4 0 R/Group<>/Tabs/S/StructParents 0>> Charlie Munger: I would go further. Has the quality gone down? Daily Active Users (DAUs) totaled 53.3 million in June 2022, year versus 3.571 billion hours in May, up 10% over May 2021. I expect less out of bankers than he does. h`DU6,]Z a]T&LPuwIXX>4cGy82 Washington State is actually considering a wealth tax at the state level. I think they stopped because if you taught that course, youd be stealing the best cases from the individual professors of marketing and so on and so on. 2 0 obj Its such a simple idea. % That turned out to be a wonderful idea and thats one of the reasons we made all this money. Questions: Why are some people incapable of learning new ideas and behaviors? << /Filter /FlateDecode /Length 2607 >> stream How are they similar or different? They had to because the traditional business newspaper business is shrinking. But I wont be following him. What do you make of these two pricings? And his conclusion is that mankind should just step up to it and do it. Have you met Lee Kuan Yew in person? Question: What do you hope the future of the Daily Journal Corporation looks like in a decade? Were beholden to the guidelines of the county of Los Angeles and other counties. You saw the ebb and flow of industry and the creative destruction of the economic changes and so on. He said it was the pursuit of the uneatable by the unspeakable. But, but by and large, most of the knowledge has been available for a long time. Would you mind elaborating on how a professor or individual should go about building a curriculum around this approach? I think the Chinese have behaved very shrewdly in managing their economy and theyve gotten better results than we have in managing our economy. I own some apartment houses, so I like that investment, provided youve got a perfect management which is hard to get. The meeting was held on February 24, 2021. I dont think it was a mistake to buy the Daily Journal when we did, paying the price we did. Its too volatile to serve well as a medium of exchange. I recommend that other people follow my practice. Just time after time, he would choose the right system. And if you cant do that, youre not gonna win the great chess championships of the world and youre not gonna do as well in business as Henry Singleton did. Charlie Munger: Well, I hope we dont have fewer truck stocks because Berkshire Hathaway is deeply involved in truck stops. Were all pretty forgiving of ourselves too which is probably a good thing. Some people have a natural trend toward good judgment, and with other people, their life is just a series of mistakes over and over again. But I do think having a whole system to sell hydrogen is difficult. Theyre just very simple. I hope the newspaper survives too. And, I was always aware of that and so Ive accepted these damned annual meetings. Im pretty easy on myself these days. See our Terms, Privacy Policy, and Disclaimer. Is it Bitcoin, decentralized finance, or something else? Charlie Munger: Yes, I think it must end badly but I dont know when. I expect that and I welcome it. Charlie Munger: I think any rich nation ought to have a social safety net that expands a little with its wealth. These are very difficult questions and most people assume that its simple. Written by Andy Jassy, CEO at Amazon. We always want to get the facts right. Gerry, dont you think were doing pretty well? Question: Of the various types of moats and competitive advantages, which types do you think will be most important in the years ahead, and what combinations of competitive advantages can you imagine will create any new types of moats? Charlie Munger: Well, it helps to be able to leave the IQ test early with the highest score. And, of course, what Im saying is that if I were teaching business I would start the way Harvard Business School did a long time ago. Mr. Buffett gives a quick update on his investing lieutenants, Todd Combs and Ted Weschler, noting that they each now manage more than $10 billion of Berkshire's money. Charlie Munger: I dont have any wonderful new thoughts. Delayed Nasdaq April 14, 2022. And like last year, you will in this note find a full transcript of the entire meeting. Hed been a receiver for a bank. What, for example, would you recommend as course materials? That word focuses Bezos and focuses the people that look to him for guidance. A little wisdom in spouse selection is very desirable. Charlie Munger: I have seen an episode or two of the Queens Gambit. 4 0 obj I dont know the answer. Gerry, you have a comment on that? Sources: FactSet, Dow Jones, Stock Movers: Gainers, decliners and most actives market activity tables are a combination of NYSE, Nasdaq, NYSE American and NYSE Arca listings. You can hardly think of a decision that matters more to human felicity than who you marry. What do you think we can do to help those who are currently falling behind as a result of this pandemic? I would be curious to know how you started your interest in Singapore and Lee Kuan Yew. 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? You used examples of Lee Kuan Yews good judgment in choosing someone with brains over certain physical attributes in your past interview. It says that man is too soon old and too late smart. I do think the present CEO is an extraordinarily able man and the directors made a very wise choice when they put him in charge. and our A rich civilization can afford to do it if we absolutely have to. Question: Which do you think is crazier? And, of course, when things get extreme you have things like that short squeeze. They really need the world to stay the way it is. So, no I dont think its the responsibility of management to assure where the stock sells. Its really kind of an artificial substitute for gold, and since I never buy any gold, I never buy any Bitcoin. Heres that transcript, starting at 37:37, from the full interview here: https://ca.finance.yahoo.com/ video/charlie-munger-speaks- daily-journals-185409394.html The death tax in China is zero. On balance, we hold in certain of these position when, normally, we wouldnt buy a new position. Or, is it impossible to realize a deterioration quickly enough to exit without a loss? Of course, we accomplished quite a bit working together. Charlie Munger: Well no, I dont think we have a bubble in Treasury securities. <>>> Some people think that value investing is you chase companies that have a lot of cash and theyre in a lousy business or something. 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. Youve even said business schools that dont adopt this method are doing their students a disservice. 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. Occasionally, some damned fool will suggest something that violates the laws of physics and I always turn off my mind the minute I realize the poor bastard doesnt know any physics. And I dont think that we or the Daily Journal is getting ahead because weve got some wonderful macroeconomic insight. Im not saying that oil and gas is going to be a wonderful business but I dont think its going away. \h_^cBa\"BfuLj@`}Ze jZ*l!-;LUe=v3+adjh4Sz8h*`iQ5>dZ;c8sgu[9|7$t}HkN5xv.,GqwYp0Y,53Urn i*5"x~z0GYkgPU0gbivl:"[Z@"S5mdY = 14M.6X!8&[R-p;a)}P5Y^wE7>L>39ju oH*crZRYTf 0@N',.>BP%M72HY=eY\ |Lt[kC&15YsATr*z=%4;mSH4%ZJ[WI]da f1u#{z)`|Es5dH^,X"I3V4&F@N]6# 7V}cDCY$P(Xa:FVPfl\V!ZA~jtSBtrleZuV"Nr7cA_ u!LC36Mh]82(M+ RR)mnk d=#:v4P^^xEbt:x85!K-yQK Nu=?vL]'.vq|1b* pS67-K^sqj A 2003 examination of what makes Berkshire Hathaway's subordinate CEOs successful. 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. Ellen Ireland will be inspector of elections. A lot of the good rules of life are like that. And they dont just keep everlastingly at it the way he did. Question: Many believe that inequality accelerated by this pandemic has reached alarming levels that demand drastic solutions such as a wealth tax. We take the situation as it is and try to solve it. Theres an old German proverb Ive always liked. stream 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. I find that by working at that, I can actually make some improvements even though Im old. Has the quality of the publication suffered as the employment levels have decreased? Question: It seems likely that the current Fed policy of keeping interest rates near zero will only exacerbate the income disparity in this country by benefiting those who own the financial assets.

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