Question: The Federal Reserve appears to be supporting asset prices. I just see more and more of the rich people leaving. Think of all the monopoly newspapers that used to be, in effect, part of the government of the United States. I think the oil and gas industry will be here for a long, long time. These are very difficult questions and most people assume that its simple. The meeting will come to order. I think were into a lot less travel and a lot more Zooming. WebThe U.S. economy is strong. Has the quality gone down? Question: Has your opinion on cryptocurrencies remained the same? Sources: FactSet, Tullett Prebon, Currencies: Currency quotes are updated in real-time. So, I think you can count on the fact that what were doing is going to be a big growing field. At the age of 97, Charlie Munger wasnot surprisinglysharp as a tack. Charlie Munger: Well, I never owned a share of General Electric because I didnt like the culture. Nobody was trying to make the rich richer. But they dont teach that in the psychology department because the academic system rewards little experiments that develop more insight into psychological tendencies instead of synthesizing whats already been discovered with the rest of knowledge. Is there any new material? All the buses. We made the rich richer, not as a deliberate choice, but because it was an accidental byproduct of trying to save the whole civilization. Gerald Salzman: Well, we dont think about mistakes. 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. <>/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>> Of course, people behave more sensibly when theyre spending their own money. 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. Every value investor tries to get more value than he pays for. Dear shareholders: Over the past 25 years at Amazon, Ive had the Its such a simple idea. I said to Rick, were going to make Gerry the head of the Daily Journal. They just copied Adam Smith and left out the free speech and it worked fine for them. Theyve served us well over the years. 2022 . Munger Where does it appear most egregious? Classified advertising is down significantly. GM raises its 2023 earnings outlook | Automotive News And if you have a free market system thats trying to get rich in the way recommended by Adam Smith, what happens is that its a very irritating system because the poverty that causes so much misery is also causing the growth that makes everybody get out of poverty. Well, I dont think the quality of publishing public notice advertising has gone down. Question: Do you believe the valuations for electric car manufacturers are in bubble territory? It doesnt happen anymore. Scan this QR code to download the app now. And interested and up to speed and didnt have to take a lot of time to get background information to make his comments. Share Charlie Munger, a shareholder and board member for The Daily Journal, is set to speak at the newspapers virtual annual meeting Wednesday. If you go to a little country like Estonia, the whole damn country is on the internet and its a very good idea. And he was a great kidder. It wasnt some malevolence of the rich that caused it. Charlie Munger: Well, it certainly does and thats the kind of thing that can happen when you get a whole lot of people who are using liquid stock markets to gamble the way they would betting on horses. I think this kind of crazy speculation in enterprises not even found or picked out yet is a sign of an irritating bubble. So, you can understand why Warren got disenchanted with Wells Fargo. Everybody is. 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. Charlie Munger: Well, the business around here that has the most promise is our software business automating the courts. Thats what weve been doing throughout my whole lifetime. Thanks u/Arceus122. Rose Blumpkin had quite an effect on the Berkshire culture. I learned those tendencies well enough to synthesize it with the rest of knowledge. Question: Eugene Abegg seems like he was one of the best bankers of the last century, achieving both extremely low loan loss rates and earning around 2% on assets over a long time period. Bitcoin reminds me of what Oscar Wilde said about fox hunting. Lesson 1: Choose your words wisely. Culture is very important. I call it deworsificationwhich I copied from somebody. Generally, what people do is they have financial reserves so they have some options if trouble comes, and they adapt the way Gerry has to require downsizings or require upsizings. Charlie Munger: Yes, I think that is rising as we sit here. Ive seen the whole bus system shift from gasoline or diesel to gas and so it obviously isnt impossible, but youd have to create a whole new system of supply for it. He knew everybody and everything. and our Charlie Munger: Well, I do have a tip. So human greed and the aggression of the brokerage community create these bubbles from time to time. I think that would be insanity. And I think the directors of GE deserve a lot of credit for making Larry Culp the CEO. Jamie Dimon's Letter to Shareholders, Annual Report 2021 And when the old CEO of the Daily Journal died, Gerry was managing the business affairs of the Munger Tolles law firm. Apartments have come through better. I find it much easier to find four or five investments where I have a pretty reasonable chance of being right that theyre way above average. Charlie Munger: Well, of course, its very hard to fix the global warming problem when the poorer countries need to burn coal to stay alive and so on. Nothing contained on junto.investments constitute a solicitation, recommendation, endorsement, or offer by Junto or any third party service provider to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction. 2023 Junto Investments, all rights reserved. Join 4,000+ investment professionals and curious generalists by getting my latest articles, research, and insights directly to your inbox. endobj And thats very interesting. Youve even said business schools that dont adopt this method are doing their students a disservice. So, the shareholders have been lucky to have somebody like Gerry here who could learn what he didnt know and fix it. But he could play chess blindfolded at just below the Grandmaster level. Are they more stable? That doesnt happen. If you dont spend the money, you and your heirs get to spend it eventually. Nothing is particularly obvious for everybody to do the same thing. Youre better off concentrating your decision power on one person the way the Li Lu partnership does and then choose the right person. If the seas were to rise 60 feet, which could happen in another 100 years or so, wed have to build enormous barriers to sea entry. Question: Mr. Munger recently raised the alarm about the level of money printing taking place. I think all of this activity is regrettable. I dont think we have any great gift at making macroeconomic predictions. Theres no question about the fact that Wells Fargo has disappointed long-term investors like Berkshire because the old managementwhich is now removedwere not consciously malevolent or thieving but they had terrible judgment in having a culture of cross-selling where the incentives on the poorly paid employees were too great to sell stuff that customers didnt really need. What do you think we can do to help those who are currently falling behind as a result of this pandemic? He was just a very old-fashioned sound thinker. 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 We are in fact being a more difficult type of software business than Microsoft. WebIn 2021, we continued adding new restaurants to our Marketplace and third-party data suggests we remain the selection leader in the U.S. But, I dont think Ive got a lot to contribute. The only opinion I have there is that I dont think anybody knows whats going to happen for sure. Last year it quintupled. He had a long and wonderful run. Gerald Salzman: None. 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. One is a big interest in Li Lus China fund, which is a limited partnership, and the other is a Vanguard index fund. For more information, please see our I think most people who are assuming tolerable success in life are about as happy as they were ordained to be. I think theyre a bad investment when interest rates are this low. Question: You identified the opportunity in electrification and invested in BYD. Charlie Munger: I dont think I use much physics in solving my investment problems but it occasionally helps me. Data are provided 'as is' for informational purposes only and are not intended for trading purposes. It reminds me of the key phrase and Bunyans Pilgrims Progress in which he says: My sword I leave to him who can wear it. 02/16. The stock appreciated probably way more than intrinsic value. The directors are Gerry Salzman, Peter Kaufman, Mary Conlin, Gary Wilcoxwhos retiring nowand myself. Have you met Lee Kuan Yew in person? No one knows for sure just how much government intervention is wise and at what point the government should stop intervening. These actions have given some shareholders more visibility and comfort on their investment. But, no, I dont think Treasury securities are a big problem. Charlie Munger: I think any rich nation ought to have a social safety net that expands a little with its wealth. And they dont just keep everlastingly at it the way he did. Charlie Munger: Well, I cant top Lee Kuan Yews example. He said it was the pursuit of the uneatable by the unspeakable. Books to Berkshire Hathaway Shareholders Charlie Munger: Well, Lee Kuan Yew had the best record as a nation builder. The hydrocarbons are also needed as chemical feedstocks. [As for] marketable securities, we prefer owning common stocks to holding cash under current conditions and its kind of an accident that we have so much in marketable securities. Charlie Munger: Well, the people doing the computer software are doing magnificently wellthe people under Gerry: Maryjo and Danny. April 14, 2022. Charlie Munger at the 2021 Daily Journal annual meeting spoke once again at great length. Questions: Many major businesses and high net worth individuals have been leaving California. Question: What have you done to live such a long life? 2021 Key Results Total net revenue grew 55% year-over-year (YoY) to $2.765 billion Platform revenue increased 80% YoY to $2.285 billion Gross profit was up 74% YoY to $1.409 billion Active Accounts reached 60.1 million, a net increase of 8.9 million active accounts from Q4 2020 Streaming Hours increased by 14.4 billion hours YoY to One thing I can promise is that I wont contribute much to it because I dont understand it. Question: Last year, almost every ecommerce, internet, and internet adjacent stock was up 100 plus percent. What are the psychological implications of this type of market behavior? If so, how do you think society should address it, especially because poor countries require much more cheap energy to reduce poverty? Thats what the communists are doing. Charlie Munger: Well, I dont participate at all. 2021 Letter to Shareholders - About Amazon 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. Its a very dishonorable low-grade way to talk. I think theyre probably right, by the way. Nobody else has ever taken a big country out of poverty so fast and so on. 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. Charlie Munger: Its very hard to have a shrinking business. 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. % We love it anyway. I dont think it was a mistake to buy the Daily Journal when we did, paying the price we did. And I think, by and large, we made the most practical decisions that were available to us. Can you speak to the causes, the trend, and make some predictions? I recommend that other people follow my practice. A lot of the people who are doing this remote worka lot are going to work three days a week in the office and two days a week at home. I think the Chinese were very smart. %%`EQ=@jMjkjJn. g5? 5T Question: Youve said several times that the best way to learn about business is to study the multi-decade financial results of great companies. This helped drive average monthly order frequency higher in Q4 on both a Q/Q and Y/Y basis. I think any intelligent person can get to be pretty good as an investor and avoid certain obvious traps. I think that to some extent the complaint about the rich getting richer as a result of the COVID panic is a misplaced concern. The second proposal is to ratify the appointment of our certified public accountant: Baker Tilly US, LLP. <>>> 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? Can U.S. Treasury bonds be such a case today? See our Terms, Privacy Policy, and Disclaimer. Question: Do you believe the market is going through a long-term value slump similar to 1999, or do you believe technology has caused a permanent change in how companies should be valued? Commission-free trading is not free. What prevents the wide use of helpful psychological insight is the fact that psychology gets really useful when you integrate it with all other knowledge. How concerned is he about Chinese government interference as seen recently with Ant Financial, Alibaba, and Mr. Jack Ma. He was just so damn smart. Dec 2021 Mar 2022 Jun 2022 Sep 2022 Dec 2022 Total Part of the reason for that was cultural. Charlie Munger: Well, Im constantly making mistakes where I can, in retrospect, realize that I should have decided differently. And, I was always aware of that and so Ive accepted these damned annual meetings. In a shareholder letter, Barra said 2023 will be a "breakout year" for GM's Ultium-based EVs. Would you mind elaborating on how a professor or individual should go about building a curriculum around this approach? Charlie Munger: 2022 Daily Journal Annual Meeting Transcript The former majority owners of Bank of Blue Valley and Morill & Janes Bank, Bob Regnier and Kurt Saylor respectively, both signed the shareholder letter. Charlie Munger: Well, the one charitable institution where I have had some influence for a very long time has a whole bunch of hotshot financiers in every branch of wealth management there is on the board. I think that shareholders should be more sensible and not crowd into stocks and buy them just because theyre going up and they like to gamble. Theyre in a place thats gotten more valuable. Charlie Munger: I have seen an episode or two of the Queens Gambit. Will we have fewer gas stations or truck stops in the future? The psychology professors dont know all that much about the rest of knowledge and they have no incentive to master it. Question: Why, almost two years ago, did you believe that Costco was the only U.S. stock worth buying? Im afraid thats the way we all have to leave our swords. I would imagine that applies to the broad market too. Question: What is the biggest lie currently being perpetuated by the investment complex? Gerry, dont you think were doing pretty well? When you pay for order flow, youre probably charging your customers more and pretending to be free. 4 0 obj Capitalism is almost as brutal as that. How would they think about current opportunities with low rates and low inflation? They had to because the traditional business newspaper business is shrinking. And I think wise people should just stay out of them. I find that by working at that, I can actually make some improvements even though Im old. Highlights From JPMorgan CEO Jamie Dimon's Annual Letter It was a background that helped everybody. Shareholder Letters He had excellent judgment. Daily Journal And all I can say is that well do the best we can. Nobody should believe that Robinhoods trades are free. Its difficult, but its not impossible investing in bank stocks successfully. Washington State is actually considering a wealth tax at the state level. And, we have to function as an informal committee in that we have to bring our employees and our clients together to work out what they already know and how we can help them do a better joba more efficient job. And, what about passive investing? And I think the world would be better off without them. You know what her mottoes were? It was absolutely incredible. You get crazy booms. <> So, no I dont think its the responsibility of management to assure where the stock sells. Question: BYD is in the Daily Journal stock portfolio with a very big paper gain. Have you seen the television show Queens Gambit on Netflix? Charlie Munger: I think I had the right temperament. And I dont know whether hes right or not. In other words, to some extent, its a self-correcting system. The total number of shares, represented by proxies at this meeting, are 995,682, which are more than enough to constitute a quorum making the meeting duly held. Any tips on how to generate insight in these types of situations? GM raises its 2023 earnings outlook | Automotive News By the way, the Harvard Business School, when it started out way early, they started out with a history of the business. Of course, if he had a chance to do it over again, he would avoid those mistakes. Its really kind of an artificial substitute for gold, and since I never buy any gold, I never buy any Bitcoin. Or, is it impossible to realize a deterioration quickly enough to exit without a loss? If a civilization can progress only when it invents the method of invention, you can only progress when you learn the method of learning. What do you make of these two pricings? A 2003 examination of what makes Berkshire Hathaway's subordinate CEOs successful. Always on point. And, he was very good company and a splendid gentleman. Furthermore, hed gone through the Great Depression. Of course, its going to be difficult. As a matter of fact, it will be here for a long, long time if we stop using many hydrocarbons in transportation. Bitcoin at 50,000 or Teslas fully diluted enterprise value of 1 trillion. I expect less out of bankers than he does. D07"Kn Im Charlie Munger, Chairman, and to my right is Jerry Salzman, CEO. In a shareholder letter, Barra said 2023 will be a "breakout year" for GM's Ultium-based EVs. Charlie Munger spreads wisdom at the annual meeting for the Daily Journal. Its like evolution in biology. You have to be concerned about employees lives. If you were offered a fresh start today, what would you do differently in life and in investing? And, of course, thats a very dangerous way to invest. Gerald Salzman: There are a number of factors that come into play here. Those are pretty good rules and theyre pretty simple. Think of whats died in my lifetime. All the good things. Privacy Policy. This is a highly desirable thing. Who gets rich faster by class is going to vary over time and I dont think anybody should be too concerned by it. Charlie Munger: I think Ill skip that one. What happened is that BYD is very well positioned for the transfer of Chinese automobile production from gasoline-driven cars to electricity-driven cars. 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. Considering their system, that is not what he should have been doing. Letter He was death on corruption which was a very good idea. Question: If you had a chance to make an addition or revision to Poor Charlies Almanac, what would that be? That word focuses Bezos and focuses the people that look to him for guidance. Read the full transcript of the 2022 Daily Journal annual meeting featuring Charlie Munger and Gerald Salzman. Hell be able to do it. 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. Sources: FactSet, Dow Jones, Bonds: Bond quotes are updated in real-time.
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