Daily Journal · 2023

Ежегодное собрание Daily Journal 2023

15 февраля 2023 2 ч 30 мин видео

Источник: Daily Journal / CNBC · встроено из оригинала; мы не размещаем видео у себя.

Последнее собрание, которое провёл Мангер. Он ушёл с поста председателя совета директоров Daily Journal в 2022 году, но по-прежнему вёл марафонскую сессию вопросов и ответов, и в свои 99 лет был так же остёр и беспощаден, как всегда, — за девять месяцев до смерти в ноябре 2023 года.

Почему стоит посмотреть. Это поздний Мангер в концентрированном виде: откровенный о собственных ошибках (позицию по Alibaba он называет «одной из худших ошибок, что я когда-либо совершал»), полный нежности к тем немногим компаниям, которыми он по-настоящему восхищается («Я обожаю в Costco всё… я законченный фанат и никогда не продам ни одной акции»), и с присущим ему презрением к криптовалютам. Это ещё и доходчивый мастер-класс по темпераменту — как держать концентрированные позиции, признавать ошибки не дрогнув и сохранять голову, когда рынки теряют свою.

Заметные темы: BYD и бизнес электромобилей; почему он держался за китайские акции вопреки политическим рискам; банковская турбулентность 2023 года; доводы в пользу терпения и против лихорадочной активности.

BYD Tesla Alibaba Costco bitcoin banking China

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all right ladies and gentlemen the meeting will come to order hello everyone I'm Stephen Michael Jones the new chairman and interim CEO of Daily Journal Corporation as of the end of March 2022. I'm here today at our Los Angeles headquarters with an individual who really needs no introduction the legendary Mr Charles T Munger who until last year served as Daily Journal corporations chairman for many decades I'm grateful that Charlie who remains a director on our board has agreed to join us today I also want to acknowledge and express our gratitude that Mr Munger continues to manage Daily Journal corporations considerable portfolio of marketable Securities and at no cost of the business I might add so thank you Charlie over the years this annual shareholder meeting has become an increasingly popular event given it's been a unique and wonderful opportunity to hear from and ask questions of Mr Munger I recognize this is why many of you are joining us today and so my goal is to go through our formal business as quickly as possible without sounding too much like an auctioneer I also want to say that we really wanted to return to an in-person format for this year with a with an audience of our shareholders actually here with us and with the other members of our board Mary Collin and John Frank joining us on stage however for health and safety reasons we opted to err on the side of caution again this year and do another round of the online approach that we've followed over the pandemic I recognize we're all done with covid but covet doesn't quite appear done with all of us so before I turn things over to Becky quick of CNBC to moderate the Q a we'll now proceed to the formal business of the annual meeting Michelle Stevens Executive Vice President and Secretary of this meeting and Ellen Ireland is inspector of Elections Ellen will you please report the number of shares represented at this meeting on December 16 2022 the record date fixed by the board of directors for determining the shareholders entitled to vote today there were 1 million 377 026 shares of common stock of its Corporation outstanding I have a list of the shareholders who were of record of that date certified by the corporation's transfer agent at Kennedy Trust Company I also have an affidavit certifying the completion of the mailing of the notice of this meeting the proxy card and the 2022 annual report along with a prepaid postage return envelope to the shareholders the total number of shares represented by proxy at this meeting is 849 758 which is more than a majority of voting power of all outstanding common stock of the corporation and the meeting May proceed I will attach the affidavits to the minutes of this meeting and have a copy of the minutes of the last annual meeting thank you a majority of the voting power of the corporation is represented at this meeting and this meeting is ready for the transaction of business as the first order of business we will act upon the first proposal which is the election of a board of directors four directors are to be elected at this meeting and the following people have been nominated and received the number of votes and are thus elected to serve Charles T Munger Mary Conlin John B Frank Stephen myhill Jones the inspector of Elections has tabulated the vote the nominees have received the following number of votes Charles T Munger 428 537. Mary conlon 516 625. John B Frank 573 419 Stephen Michael Jones 543 229. since each of the nominees has received the number of votes required for his or her election as director I declare that each has been elected director to serve for the next year until his or her successor has been elected and qualified the second proposal is the ratification of the selection of the independent registered public accounting firm the audit committee and the board of directors have selected Baker Tilly us LLP for this fiscal year and the ratification requires a vote of the majority of the shares represented at this meeting the inspector of Elections has tabulated the vote for 846 716 against 1097 abstain 1945 proposal 2 is hereby declared approved by this meeting the third proposal concerns The Advisory note on executive compensation our CFO and I are the only executive officers at the company and our compensation is described in the proxy statement the approval requires a vote of the majority of the shares listed represented at this at this meeting the inspector of Elections has tabulated the vote and the following votes have been cast four six hundred eight thousand nine hundred and three against 1296 abstain 3005. proposal three is hereby declared approved by this meeting the fourth proposal concerns The Advisory note on the frequency of the advisory vote on approval of executive compensation the option of one year two years and or three years that receives the highest number of votes cast will be the frequency for the advisory vote on executive compensation selected by the shareholders the inspector of Elections has tabulated the vote and the following votes have been cast one year 185 735 two years four thousand two hundred and eighty one three years four hundred and sixteen thousand three hundred and twenty one accordingly the stockholders have elected to hold the vote on executive compensation once every three years since there is not any further business to be brought before the meeting the meeting is adjourned we'll now trans transition to the Q a once again with Becky quick of CNBC serving as our moderator thank you in advance Becky uh I recognize most questions will be for Charlie and I'll likely answer the occasional question if it's specifically about Daily Journal or Journal Technologies thanks everyone over to you Becky Steven thank you very much and welcome everyone we got a great number of questions that came in and I've tried to sort through as many as I could we'll go through as many of these questions as we can during the session but first of all Charlie thank you for taking the time today the first question that we have comes from Ryan fusaro and his question is related to journal Technologies he says can you give an update on the company's new CEO Stephen myhill Jones he was appointed as interim CEO nearly one year ago how's he performing and when will a decision be made on selecting a permanent CEO well the answer is Steve chose his own titles coming in and we'll change it whenever he wants to change it how's that sounds fair enough yeah Stephen uh you know I uh yeah I'll say that when we were in discussions a year ago I told Charlie that I was committed to ensure the success of the business but that I wasn't sure I would be the right long-term CEO and I had incomplete information at the time and I thought it was important that I have the optionality to hire someone better suited or promote from within if we discovered that'd be a better path and um you know I found it and helped grow a geography software company with no background in publishing or the legal and Court sector and what I can say now is that the parallels between the software company I built and journal technology is our are remarkable and I believe I can add value I like the business and the potential for it so I expect we'll have Clarity on our long-term approach sometime later this year okay Stephen thank you the second question comes in and it's in regards to Capital allocation this is from Paul in Linwood Michigan Paul Pham in the past year you've just in the past you've described daily journal's unique position of being a newspaper which generated enough excess cash in the past to invest in an equity portfolio now it's fastest growing subsidiary Journal Technologies accounts for a large part of the company's earnings is the technology business a natural area to allocate excess capital for the best return on equity for the company has gone off oh can you hear me Charlie I'll keep talking I can't hear her one two three four five I'll test this out maybe you guys can play me I don't know if there's a voice of God you could play to the floor there but I'll keep talking in the hopes that Charlie can pick up on this and Charlie just let me know when you do hear this is a question again sounds like they're not hearing folks I don't know in the control room if you guys have any ideas about what's happening again this is the annual meeting for the Daily Journal shareholders meeting we have a lot of questions that have come in for Charlie Munger and we're going to be getting to those questions as soon as we can get the audio fixed for this um sounds like Becky we can hear you over uh someone's brought a tablet over and we can hear you over the tablet for the time being okay Stephen thank you Charlie I'll just wrap up I don't know where you this got cut off but this is from Paul Pham he was asking about yeah Capital allocation and he's just wondering if the technology business is a natural area to allocate excess capital for the best return on equity for the company how should we think about or how does the current investment manager think about investing in the equity portfolio in relation to reinvesting in growing areas of the business or share BuyBacks well it's all very simple we made a lot of extra money out of the publishing business and it's heyday and that was about 30 million dollars and that was a all made in the Foreclosure boom and of course in the old days we had a information Monopoly on publishing the appellate Court's decisions daily and newsprint and the internet came along it destroyed our position our circulation went way down and so forth so we've had a drastic change in Good Fortune in our publishing business and Steve actually ran the small software company in Canada for years and years and years which is quite similar to what general Technologies does and so that's how we got together the future of this business is not in the publishing side it's on the it's on the general technology side and the good news is that we're in a huge Market because all the courts of the world are in the Stone Age still in terms of automating with modern technology and so it's a big Market the bad news is it's a long slow slog where you deal with a lot of bureaucracies in response to rfps a request for proposals and it's just a very slow difficult business so we got a slow difficult business of chewing our way into a huge Market that's not going away with one big competitor in it and that's the future and like many a Publishing Company which use newsprint uh it's a miracle and then you survive if you look in the small and mid-cap edition of the value line books you'll find there are two entries left one is Gannett which used to own the Monopoly newspaper I don't know 50 60 100 different cities and the executive is used to ride around and giant airplanes and be treated like Lords of England when they went to Publishers convention and every newspaper publisher that you know was It was a hugely powerful in his own community so they're like the Lords of England all these Publishers and now Mighty gannetta is just a pale shadow of itself newspapers shrunk down to a tiny little few and very limited assets and so forth so there's been an unbelievable change in the technology and competitive outcomes in publishing ordinary newspapers on newsprint and by and large the safe rule is they're all dying it's just in different states of near death and so if this place has a future it's in the general technology side and that's a long slow grind and the only reason we have a lot of marketable Securities is we had the extra money and we preferred the marketable Securities to cash in the inflationary world and so and of course there's been a minor miracle that we've got as much as we have in the marketable Securities because our investments have done better than average follow-up so I'm the good news as we survived so far and we've got some Surplus wealth and the bad news it's a long slow slog ahead in the main future is in journal Technologies up to that this is a related question it comes from Gareth Moore in Northern Ireland and maybe you can both comment on this he says that given the extended amount of time that it will take to digitize the court systems because of complexity risk and bureaucracy and the fast-moving world of software Innovation how can shareholders be assured that journal technology solution remain Cutting Edge long enough to reward shareholders and how do you think about the risk of arriving in 2030 with a great software business but which only lasts a few years until it gets disrupted by some new technology sure I mean Steve will take that one yeah you know of course there are no assurances um and at the same time you know I do have some background dealing with this challenge uh because I did it for 19 years with my former company um and we earned consistent and uh appealing profits and I expect the model is still working well for the folks who acquired us um you know I think a key responsibility is to get technology change working for us and our customers rather than against us and it and it takes um Advanced planning and investment to engineer software um with change over time in mind and so it's inherently upgradeable and I think this model works great if you can establish a sufficient licensee base to fund that proactive r d to evolve products in a way that manages technology change so that um and it also needs to be highly repeatable and I think all this requires a mindset that enterprise software development um is an ongoing process and not a one-time event and so our uh our customer deployments okay uh let me move on to another question that comes from Gage Sanchez um Gage writes in with a question for you Charlie two years ago during the 2021 yeah let's try that okay go ahead you've got the speaker there okay so Gage Sanchez writes in and says two years ago during the 2021 annual meeting you said daily journals 350 stock was selling way above the price that you would pay for the new shares as I write this Daily Journal trades for 305 dollars a share a 420 million dollar market cap with a total Equity portfolio value of over 310 million dollars debt charges covered several times over by the bank's dividends and journal Technologies off financial statement value in huge Market do you still hold the same belief I believe well he accurately stated our circumstances and we do have a lot of surplus wealth but we need it to attack this big Market the these courts why would they gamble on a little company with no nut worth the courts that are letting the RFP contracts so we're we're using our net worth to help the business but does that get at the question of whether you'd buy this stock at 305 or well I don't buy it and I don't sell it so that's what the mongers have been doing you know what we now have audio it's not a crazy evaluation considering what everything else is selling for these days so have no feeling that it's almost foolishly high on some crazy Mystique some people well it's a small Berkshire and it'll double like rabbits you know and of course it's not a small Berkshire I'm 99 years old for Chrissy that question mentioned the bank dividends that you all have a djco another person wrote in Norman Bergman who asks Charlie Berkshire has unloaded the bank stocks if it's not good enough for Berkshire shareholders why is it good for us well I might have a different idea if you own Securities it's marketable securities within a corporation located in California you pay a huge state and federal taxes if you sell things in a big game and that affects our willingness to sell some of those Bank stocks I bought on the bottom tick in the Foreclosure crisis it literally was the bottom tick and they're practically all gain so I immediately give the government 40 some percent of everything we sell out of that out of those Bank stocks so and of course they're producing a taxi the Dividends are almost tax-free so based on what we would get if we sold them and the return we're getting out of the dividends it's not so bad for us the answer is it's we're not in a normal position all factors considered we're willing to hold them for a while and there is a big disadvantage in Africa's huge layer of federal corporate taxes and state taxes between us and any money we make in a state like California which is a very business unfriendly State doesn't make people are rushing to come out and incorporate in California and there are all kinds of states that have no income taxes and deliberately use that lure to bring in corporations California is trying to force its wealthy people and its wealthy corporations out of the state and I must say it's working fine they're leaving just whatever now it's another and that's that's just the way it is but you know if we succeed in this software business it will all come good in the end and if we fail we have a crutch under us in our real estate and our Securities which means we won't lose so much from the president market price so it's not a crazy thing to own now the market valuation but it's not cheap either right action comes from Thomas Liney who says he's a long time Berkshire shareholder but a pretty recent uh Daily Journal shareholder he says well I know the Daily Journal is not a mini Berkshire Idaho suspected that there would be some shared principles in the area of governance specifically regarding the board of directors I'm surprised to see such a small ownership three of the five on zero shares a fourth owns a hundred shares Thomas says pretty unimpressive doesn't suggest much alignment between the board members and shareholders he says he's not trying to be rude but he thinks it's a fair question well what happens is we used to have Garen and Munger and we were the two biggest shareholders and of course we'd been partners for years and years and we took no fees no directors fees no expenses no nothing and so it was a very user-friendly Berkshire type place well Garen died finally at age 90 so and so now we're down to one last survivor of the Old Guard and of course we need a certain number of new directors and our new directors are pretty damn smart and they're all rich by the way so it's still a very berkshire-like board a smart and Rich and thinking like a capitalist we still we have that I would add that you know while I don't have Equity yet I'm I'm I'm certainly Keen to participate in future growth of the business um what should the timing of that be with someone as new as me I think that's an interesting question um Thomas I work it out yeah right now I don't think that's impacting my driver decisions I already feel enormous skin in the game that Mr Munger and the board entrusted me to take the reins of the business is something I take very seriously it's really quite interesting to have a pile of Securities and one interesting activity in a very high-tech field and with a lot of politics and travel and difficulty in it but it's a huge Market and it isn't like there are a lot of other people in it most of the big corporations it would be our natural competitors are places where they hate rfps in other words one of the reasons the business is good for us is a lot of the big companies just hate what we're doing they want very easier money at any standard Visa software just repeated over and over again they're spoiled we're willing to Slug It Out of the mud of all these little Consulting contracts and that makes us have really a few competitors in the field Charlie since you brought up Rick Aaron oh go ahead no go ahead well since you brought up Rick Aaron I want to get to this question from ronit Pereira and Mumbai who says your friend Rick Aaron passed away about a year ago he was your longtime friend and business partner for several decades how was he as a person as an investor and how do you remember his legacy well he was just terrific as a person investor and I miss him terribly of course we were together for years and years and years and we were poor together and that creates a bonding when we met uh in 1961 we were both poor and struggling and Young so we had a long ride together and but all things end you know that's that's the same that's the nature of The Human Condition I want to get to a question from Lee uh just the first name from this shareholder wrote in a question about chat GPT and artificial intelligence and the impact on daily journals the daily journals business model and civilization at large says I'm not sure if you've tried to converse with chat GPT given all the rage in the news lately briefly it's artificial intelligence known as a language model it's trained on trained on a large data set of texts like books and articles what are your thoughts on ai's impact on daily journals business and more broadly our civilization at Large well I think artificial intelligence is very important but is also a lot of crazy hype on the subject artificial intelligence is not going to cure cancer it's not going to do everything that we want done and there's a lot of nonsense in it too so I regard it as a mixed blessing all this artificial intelligence some people have used it in some things like Insurance underwriting pretty well but a lot of people try and use it in ordinary things like buying Office Buildings or something and I think that's way more I don't think it's going to help anybody to buy an office building not very much anyway through the lens of Daily Journal Corporation AI is something that we started experimenting with in the summer in the summer for certain types of writing of certain types of Articles that's something we're certainly tracking very closely I think in terms of complex work I think it's a it's a long way off uh but for many types of activities especially routine things I think we'll I think it'll be fascinating to see how disruptive it is over a relatively short time Horizon for many types of work and activities illness wrote we had our big disruption with the technology kind of severely inadversely affected our publishing business and we have our opportunity in this new business but it's it's just a long tough slog there's no short there's no rural road to success in what we're doing someone named Peter Ferlin wrote In from Oakville Ontario and he had a question that he asked he asked chat GPT to come up with a question to ask you Charlie and here's what chat GPT came up with Mr Munger you've spoken about the importance of avoiding mental biases and decision making in your experience what's the most challenging bias to overcome and how do you personally guard against it so I'd ask your answer to that question and then what you think of the question that GPT chat GPT wrote for you well what if I had a name one factor that dominates doing bad decisions it would be what I call denial if the truth is unpleasant enough people kind of their mind plays tricks on them and they think it isn't really happening and of course that causes enormous destruction of business where people go on throwing money into the way they used to do things like oil isn't going to work at all well in the way the world is now having changed and if you want a an example of how denial is affecting things take the world of investment management how many managers are going to beat the indexes all costs considered I would say maybe five percent consistently beat the averages everybody else is living in a state of extreme denial they're used to charging big fees and so forth for stuff that isn't doing their clients any good it's a deep moral depravity if some Widow comes to you if I order a thousand dollars and you charge your one point a year for and you could put her in the indexes but you need the one point and so people just charge some Widow you know a considerable fee for worthless advice and the whole profession is full that kind of denial it's everywhere so I had to say it was I always quote demos on these it's a long time ago democity that's 2 000 more than two thousand years ago and he said what people wish is what they believed think of how much of that goes on and so it's of course it's hugely important and you can just see it I would say the agency costs and money management they're just so many billions you can it's uncountable nobody can face it who wants to keep your kids in school you need the fees you need the brokerage commissions you need this or that so you do what's good for you and bad for them now I don't think Berkshire does that and I don't think we've Garen and I did it as a Daily Journal Karen and I never took a dime in salary or director's fees or anything and if I have business I talk on my phone or use my car I don't charge it to the Daily Journal that's unheard of it shouldn't be unheard of and it goes on in Berkshire and it goes out in the Daily Journal but it we have an incentive plan now in this General Technologies and it has a million dollars for the Daily Journal stock that did not come from the company issuing those shares I gave those shares to the company to use in compensating the employees and I learned that trick so to speak from a guy at byd which is one of the Securities we hold in our Securities portfolio and byd at one time in its history the founder chairman he didn't use the company's stock to reward the executives he used his own stock it was a big reward too well last year what happened byd last year made more than two billion dollars after taxes in the auto business in China who in the hell makes two billion dollars it was a brand new intern really in the auto business for all practical purposes it's incredible what's happened and so there is some of this old-fashioned capitalist virtue left in the Daily Journal and there's something left in Berkshire Hathaway and there's some left at byd but most places everybody's trying to take what they need and just rationalizing whether it's deserved or not Charlie you bring up byd so I'll jump to a question from Stephen Spencer uh who writes in from New York New York he's curious why Mr Munger prefers an investment in byd to Tesla well that's easy Tesla last year reduced its prices in China twice byd increased its prices we're direct competitors we're so much ahead of by ATD I mean byd is so much ahead of Tesla in China it's like a it's just it's almost ridiculous and if you look at byd which no mostly y'all never heard of if you count all the manufacturing space they have in China to make cars it would it would amount to a big percentage of all the land in Manhattan Island and nobody ever heard of them a few years ago all right let me jump to another question this one comes from Michael aseo who says did the this is regards to some movement at Berkshire some sales of Berkshire stakeholdings did the sale of some byd in Taiwan semi-shares have anything to do with the relations between the United States and China or was it for purely economic reasons well be what he's talking about 50 times earnings that is a very high price on the other hand they're likely to have increased their auto sales by another 50 this year so it's we sold part of ours by the way years ago not years but about a year ago at a much higher price than the selling for now and uh no we're not a mini Berkshire we're not going to have a big correlation between us and what Berkshire does and you can you can understand why some people will sell Burgers byd stock at 50 times earnings at the current price of byd stock uh little byd is worth more than the entire Mercedes Corporation market capitalization so it's not a cheap stock on the other hand yeah it's a very remarkable company and by the way I want to tell people the great contribution I made to the success of byd I we got into it through lilu and there was a little company that knocked off the Japanese cell phones and the chairman who's got a genius say I want to buy a bankrupt little crappy autoplay and we're going to the auto business from dead scratch when he's making cell phones little tiny nothing company and both Lilo and I started talking about it please don't do this dumb thing if you get your head handed until you're going to the old business little byd and so forth well last year they made more than two billion dollars in the auto business from that standing start at zero it's unheard of but Lee Lou tonight is there all the credit because we tried to get them we tried to talk about them doing what worked so well which shows that there's some accident in life um Charlie this question comes from Michael Gallagher he says according to company filings it appeared that Alibaba shares were purchased with leverage and when the stock price fell last year he was seemingly forced to sell he being you can you ask Charlie to confirm that it was bought with leverage and if so why would he do that as it seems to go against his philosophy I got several questions that were similar to that well yes it's true uh I operated with no leverage for long stretches of my old age and Warren's the same way and recently I did use a little bit of Leverage here in another place because the opportunities were so ridiculously good I thought it was desirable to do that so that you're right it's unusual for us but we did find a few things and by the way if you go back early in my career I use some leverage I sometimes ask myself a mental question I say what is the appropriate percentage of your net worth you should put it in the stock if you think it's an absolute sense well if you're a kind of fellow who's right and when you think something is a cinch the answer is 100 percent maybe 150 percent but nobody in that nobody teaches people to think that way and finance but if the opportunity is great enough The Logical answer is a hundred percent or maybe 200 percent somebody else wrote in and I don't have the email in front of me at the moment but he wrote in quoting you where he said the three things that ruin people are ladies liquor and leverage so why would you use leverage when you know that's one of the three things that can destroy somebody well I used a little under my way up and so did Warren by the way the Buffett partnership used Leverage regularly every year of its life what Warren would do is he would buy a bunch of stocks and then he'd borrow and slow stocks and he'd buy into these uh they used to call it event Arbitrage liquidations mergers and so forth and that was not didn't go up and down with the market that was like an independent banking business and Ben Graham's name for that type of investment he called them Jewish treasury bills and it always amused me that's what he would call them but Barney was leveraged to buy Joey's treasury bills and on the way up and it worked fine for him I don't think either of us everybody's well no Berkshire has a stock an Activision Blizzard and you can argue that's whether that'll go through or not I don't know but that's the Jewish treasury bill Arbitrage the Arbitrage play on Activision well yeah civanda Arbitrage but we sort of stopped doing it because it's such a crowded place but here's here's little Berkshire doing it again an Activision Blizzard and Monger using a little leverage at the Daily Journal Corporation so is leverage I use that leverage to buy byd you can argue that's the best thing I've ever done for the Daily Journal so is Leverage The least evil of the Three L's I think most people should avoid it but maybe not everybody need play by those rules I have a friend who says the young man knows the rules of the old man knows the exceptions all right another question at least if he's lived right he knows everything comes in from uh Brandon McKee he's also asking about some of the situations with Alibaba he said how should investors View geopolitical events in regards to their investment in foreign countries how do you look at the situation of the recent Chinese spy balloon in regards to the Alibaba investment well of course it was a very interesting thing Jack ma was a dominant capitalist in Alibaba and one day he got up and made a public speech where he basically said the Communist party is full of Milwaukee they don't know their assemble arable they're no damn good and I'm smart and of course the Communist Party didn't particularly like his speech and pretty soon he just sort of disappeared from view for months on end and now he's out of byd it was pretty stupid it's like poking a bear in the nose with a sharp stick it's not smart and Jack ma Got way out of line by popping off the way he did to the Chinese government and of course it heard Alibaba and but I regard alibaba's one of the worst mistakes I ever made in thinking about Alibaba I got Charmed with the idea of their position on the Chinese internet I didn't stop to realize there's still a goddamn retailer it's it's going to be a competitive business the Internet it's not going to be a Cakewalk for everybody just about China in general I had a lot of questions that came in regarding that I'll ask this one from Wilco shutzendorf coming in from Walnut Creek California who just said previously you stated that despite certain shortcomings China was generally moving in the right direction however with the recent actions taken by the Chinese government such as capriciously punishing technology and educational companies declining to import effective covet vaccines escalating threats towards Taiwan do you still maintain that China is a viable investment option for foreign capital or is China experiencing a similar regression as Russia has seen under Putin's leadership that culminates in the invasion of Taiwan well that's a very good question of course but I would argue that the chances in a big conversation from China have gone down not up because of what happened in the Ukraine I think that the Chinese leader is a very smart practical person and it doesn't Russia went into the ukrainians that looked like a cakewalk I don't think Taiwan looks like such a cakewalk anymore I think it's off the table and sat on for a long time and I think that helps the prospects of investors who invest in China and the other thing that helps in terms of the China prospects are that you can buy the best you could buy better stronger companies a cheaper evaluation in China than you can in the United States so you're getting the extra risk can be worth running given the extra value you get that's why we're in China it's like we prefer being in some foreign country of course I'd rather be in Los Angeles right next to my house you know it'll be more convenient but I can't find that many Investments you know right next to my house just to follow up on that um Alex writes and Alex formanski I'm sorry it's very small print writes in how have political events in China over the last few months affected your thinking on the country several people including me were taken aback by the forceful withdrawal of former president hujin Tao at the October 22 annual Congress president XI seems to have Consolidated power and his actions have indicated that he thinks very differently about the role of business in Chinese Society well I have more optimism about the leader of the Chinese party than most people do he's done a lot right too and you know he would let a big anti-corruption Drive he's done a lot of things right so and I don't know where this man lives where is there a place where the government is perfect in the world that's seven sorrow the democracies aren't that regularly run either so it's natural to have some decisions made by government that don't work well it's natural to have decisions in each individual life that don't work very well we live in a world of sin sorrow and misdecision that's that's what that's what human beings get to cope with in their days of life so I don't expect the world to be free of Folly and mistakes and so forth and I just hope I'm invested with people who have more good judgment and bad judgment I don't know anybody who's right all the time and Keith from Cupertino California writes in and this is in the same vein but a little more focused how should we think about the political climate around Taiwan and the long-term impact on the semiconductor industry specifically do you see the chips and the science of the chips and science act favorably well a semiconductor industry is a very peculiar industry in the semiconductor industry you have to take all the money you've made and with each new generation of chips you throw in all the money you previously made so it's compulsory investment of everything you want to stay in the game naturally I hate a business like that at Berkshire we like a whole lot of surplus money to come in the we can do something else with and of course now if you're enough ahead of it like taiwan's semiconductor is that may be a good buy at these prices I it's not at all clear to me that are going to succeed mightily but it's a it's a difficult it's a bit of an enormous promise for the big winner but it's a difficult business in requiring everybody to keep increasing the bets on and on with all the money and so it's not perfect that semiconductor business but I remember when Intel on the world intel was once the Taiwan semiconductor business of the world yeah they invented the damn business and they dominated it for decades and until it's not clear to me that Immortal Intel's going to have a very decent semiconductor business getting as far behind as they are now it's my answer is it's not so damn foolproof as it looked even with the incentives to build plants here in the United States it's like Intel is doing in Ohio well of course that will really help but they're borrowing the money there's no indication the government is going to forgive the loans or something it's it's not like the reason loans to business where they said well loan you the money then it was aware heck go keep the money the government is not planning to do that with these new semiconductor loans and so it's it's it's not a field where I feel I have a lot of expertise what the hell do I know about semiconductors do you worry about any conditions that the government would put on companies that end up using any of that money with semiconductors or anything else well of course all of that it's deeply intertwined with government policies of both China and the United States so I would rather have something that's more foolproof myself but I do think Taiwan semiconductor is the strongest selling conductor company on Earth so I'm a I'm a big admirer of what they've achieved it's just incredible of what they've achieved speaking of things you like better and by the way it may be a wonderful investment the fact that I don't like it because I'm an old man and I don't like learning new tricks that doesn't mean it isn't right for some younger person that understands it better than I do okay actually that's I'm gonna I'm gonna switch gears we'll come back to this question in a minute but that leads me to this question about crypto that uh Benjamin writes in he says in 2007 at the USC Law School Charlie said I'm not entitled to have an opinion on this subject unless I can State the arguments against my position better than the people who are supporting it the question is does this also apply to your Wall Street Journal article on Banning cryptocurrencies and if yes would you care to share the arguments against your position well I don't think there are good arguments against my position I think the people that oppose my position are idiots and so I don't think there is a rational argument against my possession this is an incredible thing naturally people like to run gambling casinos where other people lose and the people who invented this cryptocrapo which is my name for it and sometimes I call it cryptocrabble and sometimes they call it crypto and it's just a ridiculous that anybody would buy this stuff yeah it isn't you can think of hardly nothing on Earth that has done more good to the human race than currency National currencies they were absolutely required to turn man from a goddamn successful ape model modern successful humans in human civilization does it enabled all these convenient exchanges so if somebody says I'm going to create something that sort of replaces the national currency it's like saying I'm going to replace the National Air you know it's it's as an eye it is it isn't even slightly stupid it's massively stupid and of course it's very dangerous and of course the governments were totally wrong to permit it and of course I'm not proud of my country for allowing this crap what I call the crypto to it's worthless it's no good it's crazy it'll do nothing but harm it's anti-social to allow it and the guy who made the correct decision on this is the Chinese leader the Chinese leader took one look at crypto and he says not in my China well there isn't any crypto in China he's right and we're wrong and there is no good argument on the other side I can't support so does that counter what you said back at USC that you shouldn't have a position unless you can encounter I do think you ought to be able you ought to be able to stay a lot of issues you ought to be how big should the social safety net be that's a place where reasonable Minds can disagree and you should be able to state the case on the other side about as well so case you believe in but when you're dealing with something as awful as crypto you uh it's just unspeakable it's an absolute horror and I'm ashamed of my country that so many people believe in this kind of crap and the government allows it to exist it is totally absolutely crazy stupid gambling with enormous house odds for the people on the other side and they cheat in addition to cheating in the betting you know it's just crazy so that is something there's only one correct answer for intelligent people there is just totally avoided and avoid all the people that are promoting it how do you feel about the gambling that took place at the Super Bowl and surrounding that in the legalized gambling taking place in this country at this point well it's not as bad as crypto ship I don't think there's much harm and betting a modest amount you can afford on a supermarket ball game that strikes me as pretty you know I'm telling you if you do it with a friend and not with a bookie and so I don't I don't have the same feeling I obviously don't think you should have a gambling compulsing door around begging against odds if you take all the money that I have bet against odds in my whole life I don't think it's more than a few thousand dollars Alan Shea writes in and he says if I'm all in favor everybody with the odds with the odds yeah he says if Mr Munger thinks the Bitcoin and ethereum are rat poison has he ever profited by shorting them no I don't short I that isn't great I have made three short sales in my entire life and they're all more than 30 years ago and one was a currency and there were two stock trades in the two stock trades I'm I made a big profit on one and made a big loss on the other and they canceled out and I and my currency bet I made a million dollars but it was a very irritating way to make a million dollars I've stopped it's a headache I guess well you can laugh but that but that's that's true it was irritating because you were worried well because I kept asking you for more margin I kept sending over treasury notes it was very unpleasant I made a profit in the end but I never wanted to do it again Charlie I said I'd come back to this question this was about something that you do like as an investment Ami Patel from Montreal Quebec writes in that you love Costco so what do you think can hurt Costco's economic mode in the long term well as long as Costco keeps the faith the strong culture and their extreme low markup policy I don't see any stopping it the trouble with Costco's it's 40 times earnings but except for that it's a perfect damn comedy and it has a marvelous future and it has a wonderful culture and it's been run by wonderful people and I love everything about Costco I'm a total addict and I'm never going to sell a share all right the next question comes from David Cass who's a professor of Finance at the University of Maryland he says he's a shareholder of the Daily Journal Corporation and would appreciate it if you'd answer one of these questions the question that I meant that I'll ask from is it is President Biden has proposed increasing the tax on stock BuyBacks from its current level of one percent to a new higher level of four percent what are your views on taxing stock BuyBacks well I'm strongly opposed because I think if you're a good culture has a lot of people that are good fiduciaries and it is like stealing to do something dumb of the corporate money once you can get more advantage to your show or so buy back your own stock and I like encouraging morality and decency and honor and so on your dealings with the people you're the fiduciary for and so I agree with our president on some things but this is not one of them vehemently disagree say that again do you vehemently disagree well I'm not vehement because it's not as bad as cryptocurrency it's a forgivable error but yes I disagree strongly I think it's a big mistake to adopt that policy but you know I'm a republican I sometimes vote for Democrats but I am a Republican another question on stock BuyBacks comes in from Ed prendeville in Morristown New Jersey he says Berkshire share repurchases slowed considerably from three billion dollars in the first quarter of 2022 to a billion dollars in the second quarter and a billion dollars in the third quarter even though the price declined somewhat as did the General market one would think that the buyback would increase with a lower stock price does Berkshire adjust its buyback price based on the intrinsic value of the approximately 300 billion dollar stock portfolio or the quoted price I never pay any attention to how they do it they're they're cautious and careful people and I but if you take the amount that's been bought back in the last three years it's a lot and I thoroughly approve what we're doing and I don't consider it all fair that we're being taxed we're doing something good for our own shareholders the president laid out the case today I think he said something like north of 90 percent of executives are paid with stock compensation at least in part he said maybe this was yesterday that he said this he said that's not fair the best way to Goose your own compensation is to buy back your share so it helps the executives it helps the share the shareholders but it doesn't help the employees or other constituents well there's no question about the fact that he sympathizes with the employees more and that's understandable and a lot a lot of people would have the president's orientation on that issue and I don't have a big opinion about how well thought to be distributed in the country I think I don't know the answer I do think we need a capitalistic system if we want to have a productive economy that makes civilization advance all right the next question comes in from Michael and I think his last name is maso but I'm going based on the address from the email and not a given last name he says he's a very long time Berkshire share owner that who read an irritating recent Barons article that stated Berkshire shareholders could benefit after Warren as the company could come under pressure to break up I don't see how we would benefit with our businesses being broken up as you and Warren have long stayed at the company as a whole is stronger than and one division could always Aid another division in need he says he knows Warren and you Charlie have said that the current structure and philosophies will be preserved after your departures and I hope for a very I hope not for a very long time however please offer us share owners reassurance that the company would never succumb to these silly pressures to break it up well I don't think it's at all likely it'll be broken up for a long time a lot of companies are worth more dead than alive meaning at the current price for whole businesses you could sell things at higher prices but you can only do it once Ms shareholders would pay a big tax then you'd have the problem what to do with the money and so forth I think all factors considered and with Berkshire buying in its own shares when they're reasonably priced I think berkshire's a pretty damn good bet for Cheryl there's a hold of long term in the future and I don't think it's any hardship but it isn't being broken up it works pretty damn well if you everybody that bought Berkshire held on for 20 years has done well I think that will be true for those who buy it at the current price what about the potential for pressure I don't think it'll be as good in the future as it was in the past but it will be okay considering how poorly everything else is going to do why do you think everything else is going to do so poorly because the valuations start higher now and because government is so hostile to business and that's a view over the next 5 10 20 years how far out are you thinking I would say it'll fluctuate naturally between administrations and so on but I think basically the culture of the world will become more and more anti-business and the big democracies and I think taxes will go up not down so I think the investment world is going to get harder for everybody and but it's been almost too easy in the past for the investment class it's natural it would have a period of getting harder I don't worry about it much because I'm going to be dead you know it won't bother me very much but I'm lost like they're dead I guess you want to point out to people you're 99 nobody lives forever and that's what you're referring to you're not sick I know 99 right you're not sick at the moment right well no I'm eating this good peanut brittle that's what you want to do if you want to live to be 99. we did get some people who wrote in asking I hate to advertise my own product but this is the key to longevity C is peanut brittle I can see I saw the Box earlier we did get a lot of people who wrote in questions just asking what your daily habits are what you do every day if you exercise if you think exercising a lot when you're younger is important to longevity well that's a very I have almost no exercise except when the Army Air corps made me do exercise I've done almost no exercise on purpose in my life if I enjoyed the activity like tennis I would exercise but for the first 99 years I've gotten by without doing any exercise at all and you're not planning on changing that anytime soon no I'm not changing it other people's mileage may vary yeah looking for one question that somebody wrote in because I want to word it properly and it has to do with what you've just been talking about and find it there's a lot of questions in here uh oh here it is somebody said this came from adidi Gone in Australia what would the 100th day of your life look like and how would you want to spend it when you step out of bed in the morning well I step out of my bed these days and been sit down in my wheelchair so I am paying some price for old age but I prefer it to being dead and whenever I feel sad maybe in a wheelchair I think well you know Roosevelt ran the whole damn country for 12 years in a wheelchair so I'm just trying to make this filter thing last as long as Roosevelt did it's a good plan I like it um somebody else wrote in this is Adam Mead and he said Charlie in your 1995 talk the psychology of misjudgment you listed senescence as a cause of misjudgment you said old people like me get pretty skilled without working on it at disguising age-related deterioration because social convention like clothing hides much decline you went on to say that such decline was inevitable he says you're my hero Charlie and I offer you this question with the utmost respect but feel it needs to be asked would 71 year old Charlie trust the judgment and mental capacity of 99 year old Charlie well there's no question about the fact that you lose some mental acuity as you get older but some people get Schroeder at adapting to their limitations and they do pretty well and so far I've had plenty of decline but I'm pretty shrewd about the way I handle it and so far the results have not been that bad in my old age as evidence that's actually would be a different subject well I will point out to people we have not given you any of these questions in advance so you're taking blind questions for yeah that's all right yeah for a large stretch of time on this too uh okay how do I follow that up this one's another question this gets back to investing what we were just talking about a minute ago but Michael worked early writes in and says given the increasing rate environment what are the ramifications of moving away from a close to zero interest rate policy Warren and yourself if frequently spoken about Aesop and a bird in the hand is worth two in the bush to describe the essence of investment decision making so what do you do now that the interest rate environment is changing well there's no question about the fact that as the interest rates have gone up it's it's hostile to stock prices and but they should go up but we couldn't have kept them Forever at zero and I just think it's just one more damn thing to adapt to and investment life is that there are there are headwinds and their Tailwinds and one of the headwinds is inflation and I think more inflation over the next 100 years is inevitable with given the nature of democratic politics in a democracy so I think we'll have more inflation that's one of the reasons The Daily Journal owns Securities instead of government bonds Owens Common Stocks instead of government bonds when you say the nature of democratic policies and I forget exactly how you worded it are you talking about the Democratic party are you talking about democracism that was bigger than the Democrats did yeah all Democratic all politicians in a democracy tend to be in favor of printing the money and spending it and that will cause some inflation over time it may have played a few recessions too it may not be all bad but it will do more harm than good I think from this point forward okay on that point Ron uh tree rotola Ron tree rotola says should we may continue to maintain a debt limit the adjustment process seems to be a very simple and mechanical process however such a measure only seems to create an environment Rife with political jocking and sniping what's the purpose if we continue to budget beyond our means and then the bill comes due well if you take the history of democracy in the world and go back far enough it fails a lot and gets succeeded by dictatorships and all kinds of awful things and as a matter of fact the worst thing that happened to the human race in my lifetime was an advanced civilization like Germany was taken over by a dictator as awful lucido Hitler that happened as a consequence of a big worldwide depression it would never have happened if we hadn't had the big depression and once Hitler got in and that meant we were World War II was inevitable and that could have worked out a lot worse than it did for the people like the United States so the these things are quite important and they're not going to be done perfectly in the future no more than they were done perfectly in the past so of course you've got to expect a certain amount of future trouble in the world and your government's going to do some things that aren't exactly right on the other hand I would argue that the U.S government did some things magnificently right I have said on many an occasion that if the thing that makes me proudest of my own government is the way we handle the sequel to World War II instead of punishing the Germans and the Japanese we made them into some of our best friends on earth now that was a stunt and it was to the credit of our country that was done and it was done a bipartisan basis and I think we can all be proud of that was a smart thing to do it took some generosity we had to give up some of our money to help them rebuild and it was it was it was a credit to our species that we behaved that well on that occasion and I don't think our future Behavior will lack similar episodes of some kind black similar episodes something's very right and something's very wrong that's our that's the way it happens yeah that's very churchillesque right they'll try everything all the wrong things until we do the right thing no I would I will keep doing both wrong and right as far ahead as you can see um Charlie Al pitten writes in from Chicago and wants to know if you think we might have on and off waves of inflation like we did prior to when volcker stepped in at the Fed of course it will happen some in the future yes I think we'll have some of that in the future do you think we'll have it immediately right now with what the Jay pal is dealing with I don't I don't I don't I don't regard myself I think I'm pretty good at long run expectations but I don't think I'm going to short-term wobbles I don't know the famous idea is what's going to happen short term okay well let me ask this one as a follow-up it's it's similar and you may not want to answer this one either but Jake pillard says do you have faith in Jay Powell are you expecting us off Landing well I'll tell you the way I feel about Jay Paul is that I feel he's about as good as we have any right to expect I think he's honorable and intelligent and doing the best he can and I have no feeling that I know a lot of people who do it a lot better so I'm glad we have him Charlie another question comes in from Chris freed of Philadelphia Pennsylvania he says you've recommended the use of an index fund for the average investor as these index funds continue to expand in size their influence on corporate boards and ultimately management is ever increasing this concentration of voting in the hands of a few index funds is alarming to me do you see this concentration is alarming as well and what reforms would you suggest to address that issue well of course it's a very serious issue because it's an enormous amount of power and for a while all these index funds got the feeling they were suddenly made god-like to clean up the world and but Vanguard has retreated from that policy and I think wisely so and I have some hope that Larry think will follow I don't think it's smart for these index funds to try and influence the policy and politics of the country just because they're an index fund I think they should be satisfied to eliminate some of the Fall April investment management and do a better job for their clients which I think they do very well and I think they should be pleased with that and not try and run the old damn country as a matter of corporate governance I have no feeling that anybody at Vanguard or Larry thinks operation has any special Genius of how American corporations ought to be run and the extent they asked Berkshire to do this or that I wish they'd stop ask Marsha to do what to oh to follow their guidance I'm just not interested in their views as to how Berkshire should behave all right this next question comes from Karsten federoff who's an equity allynist analyst from Germany and his question is stock-based compensation is a popular means of incentive compensation in many companies in some cases these take on alarming proportions it feels like companies are competing to outbid each other in some companies 20 of sales are paid out in stock based compensation how do you perceive this development in recent years and what's a heavy what's a healthy level of incentives well I think you will find in American corporations very good incentive systems and others that are too liberal and others that are too narrowedly and what else would you expect of human nature but a certain amount of variety and I agree that some of this yeah and many a corporation everybody would vote to being allowed to have stock-based compensation you didn't count in Computing the earnings they just want any damn way of making the earnings appear higher it's just human nature of course they want their it's like your little kid goes off to school they want a very own good grades not bad grades and so it's it's sure there's a big problem of excess Corporation pay in some places other places like Costco I would say the compensation system is damn near perfect it's it's and there's a fair amount of stock but we always buy in enough stock in Costco to pay for the stock we're issuing a lot of people in high tech they issue the stock and they and they don't look they don't buy it in so it's a net delusion I think there's a lot that's wrong in American compensation systems and but why wouldn't there be by the way when I was young it wasn't so bad why this is something that's happened in the last 50 years I don't know it's just the history of the way things came up and the greater hardship and the pioneering ethos or God whatever it was when I was young executive nobody complained about executive compensation now practically everybody in the investment world thinks in many cases executive compensation has gotten too high take General Electric in its Heyday think of all the big compensation packages they paid and think of how they were phoning up the earnings and so forth to pay for it was disgusting and of course if that kind of crap Creeps in everywhere in our civilization the civilization will perish we need more on or not less and but I haven't any I have no suggestion as to how to fix the places where it's successive it's a difficult issue really difficult Jeffrey Malloy writes in and asks this question uh he's from San Francisco he says do you think Elon musk's ownership of Twitter specifically his hands-off approach to content moderation is good or bad for American society well you know I don't use Twitter so I'm not a good judge on that subject and my policy and Elon Musk is that he's a very talented man but also could peculiar and so I don't buy him and I don't sell them short I just say well he's a very unusual person you said some nice things about him the last time I talked to you and what he's done with Tesla oh it's unbelievable who else is a donut except byd e it just shows how tough capitalism is even if you're a jaina Genius Like musk is in some ways there's always some little byd that comes out and does better capitalism is not easy all right this question came in from Jeremy saltzberg in Costa Mesa California he says Charlie last year in 2022 a Missouri court awarded a victim 5.2 million dollars in compensation from Berkshire subsidiary Geico after a woman was infected with an STD in a car that was insured by Geico auto insurance the claimant says that the man was negligent and didn't tell her about his health diagnosis your grandfather was a judge and you have a background in law did the Missouri court get this verdict right well I wouldn't doubt it myself but it's in the nature of things that not every court is going to be right in every verdict for every judgment and I do think that allowing that you again you raised a very tough subject that you will get occasional verdicts that are just totally outrageous that's inevitable and of course that's what appellate courts are for but sometimes the appellate courts are very sympathetic with crazy verdicts again I can't fix everything that's wrong with you in life and I including a few crazy verdicts you'd put that in the category of a crazy verdict though yeah sure this question comes from Stefan Armand who is writing in from Toronto there was a lot of excitement about the relationship between Berkshire and 3G for the craft Heinz transaction has your perception of the private Equity business changed on the back of that partnership well like every other human being on Earth some deals work out better than others for 3G and they would love to have a way of going back and turning all their bad deals into good deals Berkshire would like to have the same option if we don't get it either averaged out through 3G did pretty well but recently there they've had some their approach hasn't worked as well in recent years is it as would be ideal again welcome to human life it isn't so damned easy art presser writes in and says the Florida governor and legislative body has recently taken a stand to try and control Disney's exclusive self-governing Authority previously set up in Florida under the founder Walt Disney as your organization I guess by this they mean DJ Co still owns Disney shares you think Disney Shares are still a good investment given this backdrop we've never on Disney shares that's my mistake though no but Disney is an interesting case practically every business that Disney has gotten tougher than it used to be again welcome to human life think about Disney once owned the world Lion King was running the long run on met on the Theater District of New York they went from triumphs around marching all of a sudden I'm practically every front it's more difficult this is what happens imagine Kodak which totally dominated Photography in the world and the invented this new technology Kodak wiped out its common shareholders you think Disney's had it done the same path or you think that they'll be able to Pivot I mean I know you followed the company no I think Disney has a lot of Assets in it but yeah it's unpleasant to have something how would you like running the sports ESPN now at Disney compared to it's a day it's going to be way harder for them stocks up this year's doesn't move movies look to me like it's going to be a bloodbath too so it's not a bit easy and it was easy in the Heyday of ESPN Disney made nothing but money out of ESPN it was a total gold mine what about other uh movie businesses I'm thinking of Paramount which is a huge holding that Berkshire now owns recent because I live within a few blocks of Paramount Studios and I don't even know anybody at Paramount I have avoided the movies like the plague as an investor all my life I've never made an investment in a movie business in any way shape better or form it always gives me the will it was I don't like the unions I don't like the crazy agents I don't like the goddamn crazy lawyers I don't like the crazy movie stars I don't like the people who sell dope to them musicians I mean everything about it is not my culture I like those old English actors when they came over you know I grew up with them and but basically movies is not my scene so I've avoided it's a very it's always been very hard for the people who put up the money it may be a very good place to make a living as an actor or a writer or something or a musician but it's a hard place to make money if you're an investor right this one's an interesting question it came in from Eric Howe in Milwaukee who says the population of the world is thought to have increased by more than four-fold time since you were born mind you I'm not holding you personally responsible but there has been that magnitude of growth is there a point where the biggest existential threat to humanity is the growth of the population and Humanity if so how do we discern when that point has arrived well that's an interesting subject if you'd looked at the way things that happened in the past you would have concluded like Paul there like did that the world's headed for an absolute population disaster but what actually has happened is quite different what's happened is that as the world has gotten more and more prosperous including in places like China the birth rate has gone down and so that there's actually sort of a population shortage in a place like Japan so the production of all the great experts based on extrapolating the past graphs it turned out to be totally wrong it now looks as early world's population in the advanced countries will sort of self-limit the same camp with Elon Musk he's made some of the same arguments that it's really shrinking population that's a bigger threat to humanity those I said he's a smart man sometimes like all the rest of us Denny Poland writes in and says when assessing the character and competence of a business's management have you ever made a mistake if so when did this occur and what did you learn from the experience well everybody makes mistakes am one of the I'd say one of the most interesting things that happened in my lifetime was the rise of IBM and the fall of IBM was the most admired company in America where most of my young life they just marched from triumphs and Triumph of the triumph and you know in the last 10 or 15 years they've slipped and they've their falling back in relation to other people in their field let's see the apples and the Googles and so forth came ahead IBM just they kind of missed the boat I think that's almost inevitable Kodak missed the boat of the changed digital photography too and I've heard Bill Gates say that it's almost the rule and a really disruptive technology comes along the incumbents screw up their reaction to it's hard to change your ways when they've been successful for a long time and go into a totally different way of behaving and thinking right this question is where we're sitting we're seeing in Daily Journal Corporation we're adapting to the new world see how different it is publishing a newspaper and being a inventing software records to automate these are two radically different businesses this question comes in from someone named Gene who says Mr Munger do you think that currently in the United States we have systemic racism we have what systemic racism well I suppose we've got some sure of course you're going to have a certain amount of animosity one group toward another and the whole history of the human race we've had a certain amount of that I think it's gotten way better in my lifetime however I would argue the racism is going down a lot Charlie this question comes in from Neil Doss who says what if any impact do you think the insurance industry will see because of climate change over the next 25 years well I'm not sure I have any good answering that kind of a question are you raising rates in any of the Berkshire insurance I don't think I don't think I don't think I know particularly I will I think there's a good chance that climate change will be less important than a lot of people think that doesn't mean it'll be unimportant but I think it won't be an absolute full one horror capacity with no possibility into a just oh I wait because sometimes when I wait you say more on things but I'll give you time to no I'll do it okay let me get to this question from Tony Huang He says that he's teaching the introduction of personal finance and the introduction of corporate finance to undergraduates at Indiana University in Bloomington most of his students are non-finance majors and this will likely be the only finance class that they take in college what should he teach them incorporating as many writings and speeches that you've given over the years so that they have the foundations and common sense to effectively deal with their personal or corporate finance problems later in life well it's that's a good question because it's a big question and if you have good judgment your life will work a lot better than if you have bad judgment and you get good judgment gradually over time partly they're making bad judgments and having them not work out poorly um so my counsel has always been to start trying to be better and keep doing keep trying to improve all your life and you've got about half a chance if you don't do that you've got like no chance and so I it's I used to say I could only teach with the other person almost knows then I can just trim over the brink when he's hanging on the edge but if a guy is not within miles of even starting I never make any public I never succeed so when removing idiocy I have no I have a 100 fail and you tell them laughs I've never succeeded what would you push in that direction if you've got a class full of Finance students in college maybe one of the a few questions I would teach to the people who can learn and that the others couldn't keep up the hell with them it can't be improved can't be improved I just I don't believe in but anyway I had against the wall and that by the way that's the way most Education Works they just throw out those who can't keep up that's the way Academia works that's the reason it gets so good at the top I talked yesterday on Zoom with a law professor at a great place oh my God this is an admirable guy and he's just so goddamn smart and balances incredible but he's a very senior law teacher one of the great law schools of the world so I would expect them to be pretty good but he was more than pretty good he was awesome and I thought my God Academia is quite competitive you know by the time you get to the top of the professors at a good place you find some very remarkable people and but what the but they can't there's a limit to what they can accomplish one of the reasons they turn out such good people is they take in such good people that's their secret they can't fix the clouds nobody can tough love it's an old saying dumb as for dumbest forever dumb and diamonds uh Alejandro Salcedo writes in he says reading many entrepreneurs and famous people they always say that you have to dream really big instead you say Charlie that the secret to a happy life is having low expectations could you please expand on that well yes you climb as hard as you can by just advancing one inch at a time that's the secret of life and now there's always somebody who's a little nuts and who succeeds but that's but for every guy who's exceeds their thousand failures is this an under promise over to over deliver situation too well of course who in the hell is Right mine would like going around making a lot of commitments and failing Time After Time After Time and doing what you'd promise to do everybody would hate you right there's no more guaranteed way to make people hate you than to fail them in their reasonable expectations so of course you want to live a life where by and large you're meeting me reasonable expectations of other people that's what civilization requires of all of us Charlie someone named Joe Rhoden from China and he says he's an investor from China he's sorry that he can't see you face to face this year he wants to ask you a question about life during the pandemic he says I always give bits of advice to the elders in my family like avoiding high temperatures and falling down at home but during the pandemic especially since China reopened I can seldom give them any advice except stay at home and get vaccinated so as a wise Elder yourself did you get covered during the pandemic and how do you stay healthy what's your advice to these elders I did get covered but I got it after I was vaccinated and I had like a tiny sniffle for about 10 minutes and that was Mike Ovid but I tested positive during that time and in terms of the general idea of cautious adjustment I had so a lot of elderly friends who either died or had terrible injuries from Falls and so when I got old myself and it got time to use something to avoid falling down people tried to sell me on the cane but I noticed that my friends who used canes would fall down occasionally so I did I never used the goddamn cane instead I bought one of these modern Walkers and wherever I was worried about falling down I pushed my Walker I did that for six and a half years I never fell down once in six and a half years just because I was more cautious that is my advice to old people just be a little more cautious now I've gone to the wheelchair and I've got another six and a half years probably but some of it I've already used up and I'm just as cautious of my wheelchair what is the harm of having a little extra caution makes sense yeah I want to Pivot to a question from Frank Wang in Houston Texas uh this question about Berkshire he said Berkshire previously took a position in Exxon and then exited fairly quickly if I recall correctly he says I believe you had stated that Berkshire thought it was a good alternative to cash at the time is the same type of thinking with berkshire's new position and Occidental and Chevron is it the same type of thinking or is it likely to be more of a long-term type of holding for Berkshire going forward well that is a very good question and I think having a big position in the Permian Basin through those two companies is likely to be a pretty good long-term hold so I like that aspect of that position and Ben Graham used to say if it's a good investment it may be a good speculation and I think that's generally true but I don't do those short-term speculations at least not very often and but I but I like the big position that Berkshire has in the Permian through those two I kind of admire both places a lot both accidental and Chevron are very admirable places and by the way oxy didn't start like that yeah if you go back 30 or 40 years Aki was on my crook and you know it's a it's evolved into a wonderful place but it started as a sleaze bag running it 30 or 40 years ago a man named Armand Hammer oh before your time Becky you're too young I know Army Hammer the younger one yeah anyway uh all right uh Paul D writes in and I believe it's Paul damicop says Charlie you're largely credited with Warren Buffett's Evolution to buying great businesses at a reasonable price or in simple terms a willingness to pay up for a great business given Ben Graham's exceptional insights and understanding of investing how or why did he himself not evolve to foresee the inability to scale his net cigar butt approach what do you attribute your early willingness to pay up stems from foreign a lot of Ben Graham's rise in life was during a period when there was plenty of low-hanging fruit among mediocre businesses that were way too cheap and he was relatively rare and in doing his hunting in that Garden and so he made a pretty good living for himself buying these and what happened is that low-hanging fruit eventually went away as the after half of the Great Depression went away and Ben Graham actually made more than half of all the money he made in his life out of one stock and that stock was Geico which was a great business so if you actually look at the great man's own life you see that what he taught wasn't the way he got rich himself and by the way he told that story on himself late in life carefully computed how much he'd made in Geico compared to everything he had ever done in his previous life and so you can argue that Ben Graham himself woke up once what uh why do you think that you so early on were willing to come up with this idea of paying up for great businesses well because it's so obvious and I'm good at doing things that are obvious of course it was obvious if you wanted to have particular numbers all you got to do a great company you know I recognize that greatness was good you know big deal Charlie Munger genius recognizes greatness is good of course greatness is good Paul aini from Toronto Canada writes and he says when you're evaluating a company for potential investment what do you place the most emphasis on the business or the management and do you differ with Warren when it comes to what you place first no I know I think we're the same I think we like the business great first and then second we want a great manager but we have not made a huge success by investing on grade managers to take over lousy businesses that is not the way we Rose Matt McAllister writes you're a lousy manager you really you really need a great business and can a great business be run by a lousy manager the inverse so sometimes Coca-Cola was run for years by a man with a very severe mental impairment and the directors just assumed he was drunk and let him stay there year after year now that's my idea of a wonderful business that you can you can be mentally defective and rather pretty well that was Coca-Cola and it's heyday how far back were we talking oh well 25 years foreign do the math on that figure out the timing Matt McAllister writes in and says Charlie you've described too much diversification as diversification being at best an average return producing strategy in light of that thought if one was allowed only one stock to hold for a very long time and it would be the most important asset to him and his family and their future well-being please describe what you would look for in that stock or company and also talk about the features that you would consider most important when you're trying to figure that out well it helps to have a somebody that said lucked into a good position so a great business it'll be what you'd like and of course you'd like a great management too and occasionally we've had both the right together for a long period and but of course everybody's looking for the same thing and the trouble with it is you will find when you get into those good businesses in a place is picked over and analyzed as American stocks are you can imagine the amount of time spent thinking about American stocks and you will find by and large in America it's really a great business it's at least 25 times earnings and maybe 30 or 35 or something so that makes it a much harder of course because if something goes wrong you can lose a lot of your investment and of course that's what makes investment so difficult is the fact that the good businesses don't stay cheap you gotta somehow recognize a good business before it's recognizable as a good business that's very hard to do some people get good at it but not many I don't think I would want 95 of the people who are America's professional asset managers I wouldn't want working for me really I think it's that hard I think you need to be in the top five percent they have a reasonable chance it's I mean it's very difficult now it's not difficult this is by an index feeling sitting on your ass that's the great default position your assets and by the way that's that's if you said look at the Daily Journal Corporation we just put in a 401K plan what are the investment options for the people that work zero it's all index funds and if you have a percentage of American what percentage of American 401ks have our plan index funds required about zero am I right or am I wrong of course I'm right it's a logical thing to do okay so percent worth two and twenty sometimes being worth two and twenty I would say that is way less than five percent the van is worth two and twenty that is really that's getting that's getting very rare indeed particularly under modern conditions where every Niche is occupied really if you take early stage Venture Capital lengths La Jolla does how many people have a sequoia-like record I don't think there's one in a hundred thousand square trap record Chris Reed from Philadelphia Pennsylvania writes in and says you've said previously that by the way even Sequoia makes even Sequoia makes an occasional mistake they you know everybody does but overall you still think it's worth it yeah okay so Chris freed writes in from Philadelphia and says you've previously you've said previously that you should destroy at least one uh good idea that you have each year what good idea did you destroy in 2022 and anything in 2023 so far well the idea that I destroyed it was it wasn't a good idea it was a bad idea when the internet came in I got over Charmed by the people who were leading in the online retailing and I didn't realize it's still retailing you know it may be online retailing but it's also still retailing and I just I got a little out of focus and that made me overestimate the future returns from Alibaba and so I have never gotten twice about lemonade mistakes and I think I just lost Charlie's audio rubbing my own nose in my own mistakes like I am doing now because I think it's good for myself I can hear me but I can't hear you dropped out during that last question can you do me a favor just raise your hand if you can hear me um Charlie can hear me I'm not hearing him so if you guys can call and I'm hooked in directly to the line now I'm hearing program not this program I'm hearing live on air program coming from here music that's coming in Charlie I'm going to ask you another question just so that everybody else doesn't have to listen to the to me talking this through we're going to try and get this fixed here in the control room but this question comes in from let's see let's go to this one Chris Benassi who asked the question about he says hi Charlie a notable theme during the last Daily Journal conversation revolved around positive and negative trade-offs between different systems Frameworks and choices can you discuss your views on the health care industry specifically the trade-offs between capitalist systems like the United States and single-payer systems like Canada in the UK and I'm asking this single-payer Health Care question because for those who don't know you serve for a long time Mr chairman at a hospital in Los Angeles so you do have some insights into what this situation is and feel free to talk a long time while they're fixing this but yes all right I don't hear anything when somebody asked Warren what happened when their experiment with JP Morgan Chase and Amazon and so forth and they were going to change they improve the what was wrong with the American medicine and its cost and when they gave that up as a total failure Warren just said the tapeworm won and that's what happens I'm the American system is costs way too much can you hear me Charlie I see your lips have stopped moving so I'm going to ask another question yeah I'm hearing power lunch in my ear right now if anybody's paying attention in the control room um but this question comes in from Brad heck Brad heck is in South St Paul Minnesota and says Charlie I'm a big fan of your disciplined approach to life do you get up at the same time every day and go to the bed at the same time and finally what's the first thing you focus on each day well I vary a little in my time but I'm pretty regular and I'm a pretty good sleeper in my old age so I'm very lucky in that respect man see your lips have stopped moving so I'm gonna stop talking got you I got you ah finally I hear you okay Charlie let me ask you this question we got sound again yeah I've got you modern technology yeah I know we think we'd be a little better at this sometimes it works uh Jim Noel writes in and said if you could inaugurate anyone for president in 2024 who would you choose well I think I'll duck that one I don't want to get into presidential politics okay I hear that I can understand that uh Charles writes in and says first of all he wants to thank you Charlie for gifting some DJ co-shares to establish that newly that new Daily Journal management Equity incentive plan you talked about that earlier on he said additionally he's excited about the rumored new addition of poor Charlie's Almanac first of all is that true but the real question he has for you he said you said that you admire Benjamin Franklin can you please elaborate on this subject and highlight the qualities that you admire in Ben Franklin well Ben Franklin was a genius it was a small country but remember he started in absolute poverty his father made soap out of the carcasses of dead animals that stank now that is a very low place to start from and he was almost entirely self-educated two or three years of primary school and after that he had to learn all himself well the rise from that kind of a starting position and become by the time he died he was the best inventor in his country the best scientist in his country the best writer in this country the best Diplomat in this country you know thing after thing after thing he was the best there was in the whole United States so he was a very unusual person and he just got an extremely high IQ and a very kind of pithy way of talking that made him very useful to his fellow citizens and he kept inventing all these things a man imagine inventing the Franklin stove and bifocal classes and all these things that we use all the time I'm wearing bifocal glasses as I'm looking at you these are Ben Franklin glasses what the hell kind of a man that just goes through life and his sight gets a little perfect he invented the goddamn bifocals and it was just one of his many inventions so he was a very remarkable person and of course I admire somebody like that we don't get very many people like Ben Franklin no I'm thinking the library system he was the best writer in his he was the best writer in his nation and also the best scientist and also the best inventor when did that ever happened again yeah yes all these other things yes so is there a new edition of poor Charlie's and he played four different musical instruments everything else yeah that part I did not know one of which he invented which one she invented the glass thing that you know we rubbing his fingers on my glasses they still played occasionally yeah with like different layers of water in it but he actually played on four different instruments yeah and he was a diplomat and helps yeah no yeah write the rules of the country um and taught us about compound interest with the trust that he set up for both Philadelphia and for Boston that still hundreds of years later are paying out no he was a very amazing person and of course the country was glad that we were lucky to have him is it true is there a new poor Charlie's Almanac coming out well they're creating an online edition okay you've talked about some by the way the Chinese Edition sold way more than the one in the United States well there's more people there that's not the sole reason why else well a rich old man looks like Confucius in their system there's nothing better than a rich old man yeah uh Charlie sang Park writes in a question and this is about delayed gratification taken to the extreme how rational is it for a person of your age and wealth to practice delayed gratification if it's not rational at your age how is it rational to delay gratification for the average adult so what's the rational point in life to live with no delayed gratification too I'm still I'm still doing the now that I'm old I buy these apartment houses it gives me something to do the way everybody else runs them everybody else is trying to show high income so they can high distributions we're trying to find ways to intelligently spend money to make them better and of course our Apartments do better than other people do because the man who runs them does it so well for me the man there are two young men that do it with me and but it's all deferred gratification we're looking for opportunities to defer other people are looking for ways to enjoy it's a different way of going at life did you start out that way you get more enjoyment on my life doing it my way than theirs what did you start out um having to work at delayed gratification or is that just how you were born no I learned this trick early and you know I've done that experiment with the two marshmallows with little kids yeah wait yeah and then they've done watch them how they work out in life by now and the delayed grass the little kids who are good at deferring the marshmallows are although also the people that succeed in life it's kind of sad that so much is inborn so to speak but you can learn it to some extent too so I'm gonna go home and test that out on my kids I was very lucky I just naturally took the Deferred gratification very early in life and of course it's helped me ever since uh Matt McAllister writes in and says first thank you for your sharing your wisdom those of us fortunate enough to listen have benefited significantly we've come to know that Warren Buffett we've come to know Warren Buffett as a learning machine because of your candid descriptions aside from this quality what others would you credit to Warren that has helped make him one of the greatest investors and Compounders that the world's ever seen well born is not only a very good thinker and a good learner which is important but Warren has a big strong fiduciary Gene he cares about what happens to the shareholders Lauren and I were lucky and that the early shareholders were people who trusted us when we were young and didn't have a reputation and so on and naturally we feel an exceptional loyalty to those people and of course naturally they're all dead now but we're still loyal to them I Warren and I still care what happens to the Berkshire shareholders a lot and I think that helps us I think that it helps if you're good at loyalty foreign and says that many large companies including meta which owns Facebook and various insurances are choosing to self-insure against liability either for directors or for the business risks if it's carried to extremes it would know as it no doubt will be over time this could cause potential systemic issues would you share your thoughts on this please he says he's been a shareholder of Berkshire Hathaway for 16 years and thanks you for your stewardship and sharing your thoughts generously with the younger Generations in my own life I'm a big self-insurer and so is Warren it's ridiculous for me to carry fire insurance on my houses because I can so easily rebuild a house that would burn down so why would I want to bother fooling around with the claims process and all kinds of things so if insurance you should ensure against things you can't afford to pay for yourself but if you can afford to take the bumps you know so unusual expense coming along doesn't really hurt you that much why would you want to fool around with some insurance company if your house burned down I would just write a check and rebuild it and all intelligent people do it my way don't say all but maybe I should say all until intelligent people should do it my way there should be way more self-insurance in life there's a lot of waste you're paying when you buy insurance for the other fellows frauds and there's a lot of fraud in life and if you can afford to take the risk yourself and not fool around with claims and this and that and commissions and time of course she did self-insurance simpler and so forth think of what I've saved in my life I never I don't care I never carried never I think once I but one exception I never carried collision insurance on a car and once I got rich I stopped carrying fire Insurance on houses I just self-insure it's a little bit of a surprising take for the guys big insurance is the right way to do it well that's a little bit of a surprising take from a guy who's a vice chairman at Berkshire which has so many insurance companies well but I'm not I'd rather tell it the way it is and tell us in a way that helps Berkshire I'm not going to tell it differently than I think it really is just because it's better for Berkshire even though it's bad for Berkshire I want to tell you if you can afford to self-insure self-insure even on things like medical or I just think you might think you could afford these things no that is different your insurer pays the doctor in the hospital is a small fraction of what you pay so that's a different kind of calculus everything in medicine is the cost of American Medical Care and the medical insurance it's it's a disgrace if you go to Singapore you will find that they do the whole thing better than we do and it costs 20 of what we pay and again I my audio was that by the way I have no idea of how to get from where we are to where Singapore is because all the people are getting all that extra money if I'd like Fierce Tigers to hold on to it and they control boards and cities and states and every other guy so I don't I don't know how to fix the costs in American Health Care they're totally out of control and i Warren tried to fix it with Amazon and all that stuff he failed to everybody's failed with it we everybody in America has a marvelous record failing and handling our cost of medicines Matt McAllister writes in and I realized he's asked a couple of questions I didn't realize this was a repeat send in but I like the questions he said what are some of the most important things that we need to know about Greg Abel have you experienced examples of him also being a learning machine and if so could you share one yeah well Greg is just sensational at being a business leader both as a thinker and as a doer and he's also sensationally good at smoothly getting things done through other people so he's a very remarkable human being and Berkshire is very lucky to have him and he's also it's just a tremendous learning machine you can argue that he's just as good as Warren is learning all kinds of things and one of the interesting things about Greg is there's some things he's better at than Warren is and Warren knows that and he just keeps dumping on Greg everything that Greg can do better and it's a lot and so the system at Berkshire is working pretty damn well we're very lucky to have a 92 year old in good shape as Warren and awareness and we're very lucky to have us a chief executive like Greg is very remarkable Greg is trusted by Insurance regular by uh utility regulators and rightly so he is trying to run all those utilities as if he were the regulator now how many people think that way but it's such a smart way to think you mean just from a show of good faith and yeah why not please your why not do it the way that you'd want it done if you were on the other side of the transaction how can you fail if you treat other people you'd like to be treated to yourself it's the golden rule of course it works all right someone named Jim writes in and you know I asked this question because I got a lot of similar ones just in terms of Investments but this one is probably a question that a lot of people as they start to get up 65 and Beyond start to wonder he just says would you recommend I take Social Security when I'm 67 or wait till I'm 70 when I'll receive more per month well I can't make that choice for you it's it depends if you know you're going to be dead pretty soon I go ahead and have more money to spend you think you may live a long time you may have a different calculus and I would say that most people who are healthy and so forth and who have a pretty good life expectancy they're generally they're ways to defer the Social Security taking and take more money later I guess it's optimistic thinking too if you're thinking that you're going to live a long time that's the way to play it out well what do you do Becky well I'm not 65 yet so I haven't thought about it yet I'm waiting my guess is I would I would probably work I don't think you're gonna need Social Security Becky I'm not worried about you I think I would work longer I'm naturally conservative so um yeah Le ping Wu young writes in you urge the US government to ban cryptocurrencies as China has done I have a more general question with boom and bus Cycles in different countries in history what should a good government do and not do for economic growth well you've got to do if you want growing GDP per capita which is what everybody should want you've got to have most of the property in private hands so most of the people who are making decisions about how properties do he cared for own the property in question and that makes the whole system so efficient that GDP per capita grows in a system where you have easy exchanges due to a currency system and so on and so that's the main way of civilization getting rich is having all these exchanges and having all the property in private hands if you like violin lessons and I need your money when we make a transaction we're gaining on both sides so of course GDP goes like goes like crazy when you got a bunch of people who are spending their own money and owning their own businesses and so on and nobody in the history of the world that I'm aware of has ever gotten from hunter-gathering to Modern civilization except through a system with a of where most of the property was privately owned a lot of freedom of Exchange and by the way I've just said something that's perfectly obvious but it hasn't really taught that way in most education even the you can take a course in economics in college and not know what I just said they don't teach it exactly the same way anyway that would be your best suggestion yeah that okay yeah okay uh this one comes in from Matt and he says throughout your experience with Berkshire Hathaway what are a few of the things that have surprised you most based upon some of your previous rational thoughts and ideas also how have you used some of those surprises in your quest to become a better learning machine these are all I would say the things that some of the things that surprised me the most was how much dies the business world is very much like the physical world where all the animals die in the course of improving all the species so they can live in niches and so forth all the animals die and eventually all the species die that's the system and when I was young I didn't realize that same system applied to what happens in capitalism to all the businesses they're all on their way to dying is the answer so other things can replace them and live and it causes some remarkable death imagine having Kodak die it was one of the great trademarks of the world there was nobody who didn't use film they dominated film they knew more about the chemistry of film than anybody else on Earth and of course the whole damn business went to zero and look at Xerox was once on the world it's just a pale shrink it's a nothing compared to what it once was so practically everything dies if you yeah a big enough time scale when I was young enough that was just as obvious then I didn't see it for a while you know things that looked Eternal and been around for a long time I thought wouldn't likely be that way when I was old but a lot of them disappeared practically everything dies in business none of the Eminence lasts forever think of all the great department stores think of how long they were the most important thing in their little community they're way ahead of everybody in Furnishing credit convenience in all seasons you know convenience back and forth you the same Banks of elevators and so forth multiple floors it looked like they were eternal and they're basically all dying or dead and so that once I understood that better I think it made me a better investment investor I think I mean the same can be said for managers I've talked with Doug McMillan of Walmart who carries around in his wallet like on him he carries around a list of the top retailers over the decades and nobody's ever the same you know yes we're gone yes of course retailers live in Terror because you can die someone got some yeah it's a better way of doing it you just die like those department stores did the ones that you invested in early on you mean Baltimore well no most of the think of the department stores that are gone just chain after chain after chain and big downtown that they're not weakened they're they're gone dead and to have IBM have a huge position at once had in terms of utter dominance and now it's just one of the also Iran's and it's still an admirable place I'm sure they have a lot of talent left in IBM it doesn't help you die even though you're talented and hard-working author Khan writes in and he's a Daily Journal shareholder who lives in Toronto he says Mr Munger while many of us admire you and look up to you I want to ask who were some of the people you most admired and looked up to what was it about them that made them so special well um some of the best people I would argue that Jim Senegal at Costco was about as well adapted for the executive care he got and by the way he didn't go to Wharton he didn't go to the Harvard Business School he started to work at age 18 in a store and he rose to be CEO at Costco and in effect he was a founder under a man named Saul price and I would argue that what he accomplished in his own lifetime was one of the most remarkable things in the whole history of business in the history of the world Jim Senegal in his life he's still very much alive but he's but he had a one business throughout his whole life basically he just got so damn good at it there was partly nothing he didn't understand large or small and there aren't that many gem senegals and I'll tell you somebody else for a job that of the kind he has Greg Abel in a way it's just as good as Greg sent on but Senegal was yeah he has the kind of a genius for the way he handles people and so forth and problems and I can't tell you how I admire somebody that has enough sense to kind of roughly his utilities and so he were the regulator he's not trying to pass on the cost because he can't do it he's trying to do it the way he wanted to know if he were the regulator instead of the executive of course that's the right way to run a utility but how many are really run that way so there's some admirable business people out there and I've been lucky to have quite a few of them involved in my life the guy who ran TTI was a genius TT is the Berkshire subsidiary yeah a new Daily Journal people saying how lucky you would be if we still had our Monopoly on publishing our cases or something we'd be like TTI well TTI is just marched some triumphs and Triumph and it was run by a guy he got fired and created the business I fired from where he invented the whole uh General some place defense contractor I forget which one General Dynamic Maybe I can't remember exactly but he was a terrific guy and he ran the business for us he wouldn't let us raise his pay how many people have the problem with their managers they won't let them they won't allow you to raise their pay it's pretty rare Charlie I spoke with a friend of yours yesterday and his question that he had for you is what quality has helped you the most in life well that's easy rationality if you're just not crazy you have a big advantage over 95 percent of the people because most people have all kinds of crazy patches if you just are consistently not crazy you had a you get a big advantage in life and here patient and uh gratification defer in addition to being not crazy then it's practically a cinch and then if you're exceptionally good at satisfying your commitments to other people then you've got you just automatically improved your resources and your chances in life enormously and it's so simple and why don't more people do it's an interesting question I don't think you can educate your children to do it automatically that's why you have 10 children you'll have some that are a lot better than others doing this is it harder with success age wealth to hold on to rationality I think it's it's always hard but you get better at it if you get good at Young keep practicing but it's it's never easy if you had to that question somebody asked what one stock would you buy if you had to just rely on that one stock only for your sole living expenses you weren't allowed to have any or any income at all you just had to invest a million dollars and live on that one stock how many people would give an intelligent answer to that question in America I don't think it's one in a hundred I think they wouldn't even know how to begin I think one of my favorite things that I've heard you say and it's something I repeat often to a lot of people is whatever you are age and wealth makes you more so um I came up with that a while ago what led you to this yeah of course yeah do you have any I guess no I didn't I think that's true that we all tend to we all we all tend to get a little more so in every way and uh I thought of that when I woke up this morning and put on my trousers on I thought you know I really economized in buying those trousers you know why am I economizing in my trouser buying but I have it is just so ingrained I can't stop and I'd like to Circle back to a question on Daily Journal to wrap things up Daily Journal and some of your Holdings this question comes in from Moshi Sable who says in a previous shareholder meeting back around 2018 you spoke about byd and said Journal Technologies is not quite byd but added that by the way it might work out just like byd now a few years on do you still find Journal Technologies can turn out similar to byd well it won't be as fast that I guarantee you and I won't be as great I can also all rightly guarantee that Baywood is one of the most remarkable Venture Capital successes in the history of the world he was the eighth son of a peasant had an older brother that recognized this young kid was kind of a younger brother was a genius and the older brother sacrificed himself to get this peasant Sun into some good engineering school and he became an engineering professor and then an entrepreneur and how many times you get a story like that and imagine buying a little bankrupt Auto company in China and turning it into something that this year they're going to sell more electrical cars than anybody else in the world at a time when electrical reserves are hot and it's a remarkable story but again a very unusual human being Juan chonpu and by the way in his case it wouldn't have happened if Juan John Foo hadn't been so unusual how he's a goddamn it is a damn genius and he's been thinking about the right things 17 hours a day all his life he's a workaholic auntie he can do things that ordinary human beings can't do is that the favorite stock you've ever purchased byd or Costco well I would say yes I have never helped do anything in Berkshire that was as good as byd and I only did it once our 270 000 investment there is worth about 8 billion now or maybe nine and that's a pretty good rate of return yeah I'm pretty good yeah we don't do it all the time we do it once in a lifetime now we have to add some other successes too but I don't think hardly anything like that we made one better investment you know what it was we paid an executive recruiter to get us an employee and he came up with Aussie chain the return that rajeed has made us compared to the amount we paid the executive recruiter that was our best investment at Berkshire which was I'm paying the executive recruiting for him to get a get us a chain but again it only happened once yeah that's uh quite an investment too Charlie I just want to thank you for all your time today all right we're all through I guess and being so generous I guess our meeting is over and we'll turn it back over I'm still here to do one more with you people we've been at this quite a few years so my best to all of you bye thanks everyone thank you Becky thank you Stephen thank you Charlie no

Его словами — из этого выступления

«Я люблю в Costco всё. Я законченный фанат и никогда не продам ни одной акции.»

Daily Journal annual meeting, 2023 · 2023

«Это ведь так просто — тратить меньше, чем зарабатываешь, разумно вкладывать, избегать токсичных людей и токсичных занятий, всю жизнь стараться учиться и помногу откладывать удовольствие на потом, потому что такая жизнь вам больше по душе. И если вы делаете всё это, успех вам почти гарантирован. А если нет — вам понадобится много везения.»

Daily Journal annual meeting, 2023 · 2023

«Я усвоил этот приём рано. Они проводили тот эксперимент с двумя зефирками на маленьких детях... Те малыши, что хорошо умели откладывать зефирки, — это и есть люди, которые преуспевают в жизни. Всё дело в отложенном удовольствии».

Daily Journal annual meeting, 2023 · 2023

«То, что продираться через это так мучительно, как раз и означает, что люди, жаждущие лёгкого удовольствия, сюда не приходят. Если вам это кажется медленным и болезненным, то нам это, пожалуй, как раз и по душе».

Daily Journal annual meeting, 2023 · 2023 · as recalled

«Если бы мне нужно было назвать один фактор, который преобладает в плохих человеческих решениях, это было бы то, что я называю отрицанием. Если правда достаточно неприятна, разум начинает играть с человеком злые шутки, и ему кажется, будто на самом деле этого не происходит».

Daily Journal Corporation Annual Meeting (2023) · 2023

Слегка очищено от устной заминки; из его ответа в 2023 году на вопрос о том, какие искажения наносят наибольший вред.

«Сначала нам нравится сам бизнес — он должен быть отличным. Затем, во вторую очередь, нам нужен отличный управляющий. Но крупного успеха мы добились вовсе не за счёт того, что вкладывались в отличных управляющих, которые берутся за паршивые компании. Не так мы поднялись. Если ты паршивый управляющий, тебе и правда нужен отличный бизнес».

Daily Journal Corporation Annual Meeting (2023) · 2023

«В бизнесе умирает практически всё. Ни один из великих не вечен. Все они на пути к смерти — чтобы на их место пришло и зажило что-то другое».

Daily Journal Corporation Annual Meeting (2023) · 2023 · as recalled

Расшифровки расходятся в одном произнесённом слове ('eminents' против 'eminence') — канонического написания не существует.

«Некоторые говорят: ну, это маленькая Berkshire, и она будет плодиться, как кролики, — и, конечно же, никакая это не маленькая Berkshire. Мне, чёрт возьми, 99 лет.»

Daily Journal Corporation Annual Meeting (2023) · 2023 · as recalled

Формулировка по вычищенной расшифровке; в разных расшифровках фразировка слегка различается.

«Это глубокая нравственная порочность — когда к тебе приходит какая-нибудь вдова с 500 000 долларов, а ты берёшь с неё один процент в год, хотя мог бы вложить её деньги в индексы, — но тебе нужен этот один процент. Вот люди и дерут с вдовы немалую плату за никчёмные советы.»

Daily Journal Corporation annual meeting, 2023 · 2023

О советниках, что берут плату за советы хуже бесплатного индексного фонда.

«У меня есть друг, который говорит: „Молодой знает правила, а старый знает исключения“.»

Daily Journal Corporation annual meeting, 2023 · 2023

Он приписывает эту фразу другу, чьё имя не называет.

«Мы живём в мире греха, скорби и ошибочных решений».

Daily Journal Corporation annual meeting, 2023 · 2023

«Alibaba я считаю одной из худших ошибок, которые я когда-либо совершал. Я очаровался идеей их положения в китайском интернете и не остановился, чтобы осознать, что это всё-таки чёртов ритейлер.»

Daily Journal Corporation annual meeting, 2023 · 2023

«Всякий раз, когда мне грустно оттого, что я в инвалидном кресле, я вспоминаю, что Рузвельт целых двенадцать лет управлял из инвалидного кресла всей этой чёртовой страной. Я просто стараюсь продержаться в этом кресле столько же, сколько продержался Рузвельт.»

Daily Journal Corporation annual meeting, 2023 · 2023

«Я не думаю, что против моей позиции есть хорошие доводы. Я думаю, что те, кто ей противится, — идиоты».

Daily Journal Corporation annual meeting (February 15, 2023) · 2023

О криптовалюте, когда его попросили привести доводы противоположной стороны.

«Coca-Cola много лет управлялась человеком с очень тяжёлым психическим расстройством. Директора просто считали, что он пьян, и год за годом оставляли его на месте. Так вот, это и есть моё представление о замечательном бизнесе — можно быть умственно неполноценным и при этом неплохо им управлять.»

Daily Journal Corporation annual meeting (February 15, 2023) · 2023

«Нет более верного способа заставить людей вас возненавидеть, чем обмануть их разумные ожидания. Так что, разумеется, вы хотите жить так, чтобы по большому счёту оправдывать разумные ожидания других людей. Именно этого цивилизация требует от каждого из нас.»

Daily Journal Corporation annual meeting (February 15, 2023) · 2023

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