2022 Daily Journal Annual Meeting | 2022-02-16

(February 16, 2022) Charlie Munger warned of dangerous speculation in markets, blasted cryptocurrencies, and rang the inflation alarm during Daily Journal's annual shareholder meeting.

Investing in China

The Daily Journal chairman was asked why he's happy to invest in China, whereas other top investors such as Jeff Gundlach are wary of doing so. Munger highlighted China's huge population and technological advances, and explained that he invested in the country because he could get better value.

"I feel about Russia the way he feels about China," Munger says about Gundlach, saying he empathizes with the DoubleLine Funds chief's concerns.

Munger was questioned about the risks tied to his Alibaba wager and undisclosed, leveraged bet. "We don't mind a tiny little bit of margin debt," he said.

The veteran investor elaborated on why he and Buffett invest in China, saying Chinese companies are stronger relative to competitors and cheaper than US rivals.

Crypto
"I'm proud of the fact I've avoided it. It's like some venereal disease ... I just regard it as beneath contempt," Munger said about cryptocurrencies. He asserted that people welcome the tokens because of their usefulness in extortion, kidnapping, tax evasion, and said he admired the Chinese government for banning them.

Munger welcomed the idea of the Federal Reserve launching a central bank digital currency (CBDC), noting that in his view bank accounts are equivalent to digital currencies.

Market speculation

"The great short squeeze in GameStop was wretched excess, certainly the bitcoin thing was wretched excess," Munger said, adding that too much money is being thrown at venture capital. He warned that some people are using the stock market as a "gambling parlor," and says if he was the dictator of the world, he would put a tax on short-term gains that would make the stock market less liquid and discourage short-term investment.

"It's not a good marriage and we need a divorce," he says about stocks being bought and sold so frequently.

Munger compared the rampant speculation in markets to a drunken brawl and warned it could have devastating consequences for humanity. He predicted the current asset-price bubble will end badly, but said he couldn't predict when it would burst.

Inflation

"The troubles that come to us could be worse than what Volcker was dealing with, and harder to fix," Munger said, when he was asked to compare the current spate in inflation to the surge in prices during the 1970s.

Munger was asked what individual investors should do to prepare for inflation. He disclosed that his family owns shares of Berkshire, Costco, Daily Journal, some Chinese stocks via his friend and Himalaya Capital Management's boss, Li Lu.

"It may be that you have to choose the least bad of a bunch of options," he said.

Energy

Munger threw his weight behind the US government supporting investment in renewable resources, arguing that approach would conserve valuable petroleum reserves, and he doesn't want natural resources to be used up rapidly.

Investing
"I'm always looking for something that's good enough to put Munger money in, or Berkshire money in, or Daily Journal money in," Munger said. He downplayed the importance of picking one index over another, and said he tries to swim against the tide as best he can.

Tech giants

Munger said he expected Microsoft, Apple, and Alphabet to be really strong companies 50 years from now. However, he noted that he wouldn't have predicted the department-store giants of his youth would fall by the wayside, or General Motors or Kodak shareholders would be wiped out.

Remote working

Munger noted that lots of people have grown accustomed to not being in the office five days a week, and he expects that to be a permanent shift. He suggested that corporate executives won't be flying around the world as frequently to meet in person.

He noted that Berkshire's directors have only met twice a year in-person for years, and he's happy other companies are saving money and acting more efficiently. He said it may be a good thing if people commute less, as it saves time and reduces traffic.

Stimulus

Munger said former Treasury Secretary Larry Summers was probably right that the US government provided too much stimulus, and it should be less liberal with its giving next time around.

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Видео 2022 Daily Journal Annual Meeting | 2022-02-16 канала Buffett Online