每日期刊 · 2019

2019年每日期刊年度股东会

2019年2月14日 2小时视频

来源:每日期刊 / CNBC · 嵌入自原始视频;非本站托管。

到2019年,每日期刊股东会已成为价值投资日历上的固定节目,CNBC在线播出了整整两个小时的全程。芒格当时95岁,依旧从容掌控全场——回应有关市场、银行、中国以及自己失误的提问,用的还是几十年来一以贯之的简练措辞。

为何值得一看。若想了解芒格如何同时评估一家企业与一个国家,这是最有分量的单场之一。他直白地解释了为何在多数美国人视中国市场为禁地之时,他却早早入场、毫不犹豫——这一立场在当时显得逆势而行,也与他和李录对比亚迪等公司的笃信直接相连。他对银行业的评论堪称一份实用的清单:他警告说,金融业里的大部分钱,是被那些愿意做他不愿做的事的人赚走的,所以诀窍在于持有那少数由不愿如此行事的人掌舵的银行。

值得关注的话题:尽管存在政治风险,中国仍是一个可投资的市场;如何分辨稳健的银行与危险的银行;耐心与集中持仓的理由;以及他一贯的坚持——避开愚蠢胜过追逐聪明。

banking China patience value investing

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Geri salzman president and everything else Peter Kaufman a resident wise Vanna Michelle Stevens secretary and to toe the controller and Mary Jo Rodriguez vice president a very important person here Ellen Ireland inspector of Elections and Ernest Miranda and Martin taking chaos of square mile you Miller LP are independent registered accountants will now proceed to the journal a daily General Corporation for whole business will go through rapidly and then we'll I'll speak briefly and take questions if anyone needs help raise your hand and somebody will help you give a written voting thing Ellen will you please report of the number of shares represented at the meeting on December 21st 2018 the record date fixed by the Board of Directors for determining the shareholders entitled to vote today there were 1 million 380 746 shares of common stock of the corporation outstanding I have a list of the shareholders who were of record as of that date certified by the Corporations transfer agent aquinnah T Trust Company I also have an affidavit certifying the completion of the mailing of the notice of this meeting the proxy card in the 2018 annual report along with a prepaid postage return envelope to the shareholders proxies representing 1 million 243 845 shares of common stock entitled to vote at this meeting have been filed the total number of shares in person or by proxy at this meeting is 1 million two hundred forty three thousand eight hundred forty five which is more than a mint of majority of voting power of all outstanding common stock of the corporation and the per meeting may proceed I will attach the affidavits to the meeting minutes of this meeting and have a copy of the minutes of the last annual meeting since we have enough votes in present in a majority for election of all directors we announced that the directors have all been reelected and that we have very common also don't we have one new director right very comment will you raise your hands Mary was an important executive at Pixar before they sold out to Disney so she is satisfied what about requirements that all directors be rich they also like the young and good-looking but we failed everywhere else the well announce that all those people are now elected as directors and we now have to approve that as amendment to the bylaws which accomplishes all that the third proposal is the election of the sixth director that's Mary Conlon and that's just happened and the people of the inspector of Elections has evaluated the votes and everybody has a majority and I won't go into minor differences in the voting players Leela badly off the Audit Committee of the board has selected square Milner LLP as our accountant so we need to ratify that selection and that's happening too as the proxies or inspectors election has tabulated the votes and there are enough votes to do a whole ad and all those formal matters have now been done Gerry is there anything else I was supposed to do it was very burdensome I've got so many of you have come from such great distances I'm going to speak briefly on a number of topics that may interest you and then I'm going to take questions the it's amazing the number of people at the meeting of the little Daily Journal Corporation which after all is a pretty small operation we've got two businesses one a steadily declining legal newspaper which now earns about a million a year pre-tax and shrinking and the computer software business where we're trying to automate courts and justice agencies and various other governmental departments and that is now bigger by far in terms of prospects and customers and employees and so forth than our shrinking newspaper business and there is hardly it's hardly can be imagined how hard it is to deal with a whole bunch of different courts in different states and their advisers and the RFP process and the bureaucracy this is a part of the software business that the Giants tend to hate they like a business we need to stamp out an extra copy of something and 98% of the revenues go immediately into the tills cash and there's no extra work and that is not handling a bunch of justice agencies Attorney General's state courts federal courts and so forth all over the country with different requirements different consultants and of course steady and aggressive competition the nature of the our business it's more like technical consulting it is just epistemic stamping out software it's a very high service business it's very difficult the computer science is time-consuming and difficult but just dealing with that much bureaucracy over that many different fields the political reality it's just immensely difficult so it's a very slow grinding business and that's the nature of the game we've always liked it because the business like this requires a company that's very rich and very determined and is willing to keep plugging and of course that's what the Daily Journal has done how are we doing well that's hard to judge but I would say watching it quite closely that it's like a pharmaceutical company with seven waterful drugs in the pipeline we have a lot in the pipeline that is very important to us Australia Canada California we're talking big markets and our main competitor is Tyler technologies which is listed on the New York Stock Exchange and of course they've been out of the long time and they're way bigger and but we are getting some significant volume and we have some very pleased customers and how am I held is the little daily journal corporation attract the government of Australia is a big place but I've gotten to love the Australians yeah and I think it's gonna succeed in Australia mightily and so it takes a long time and it's hard work and it's also very difficult work not everybody can do this just the mass of complexity we would never be where we are we didn't have Gerry salzman to do everything he's done over the last 10 years anybody else would have failed at this now Gerry is 80 and he and I have one kind of common we both use canes well I'm not in a wheelchair I use a can and so the idea of taking on the whole world when the Chairman is 95 and the Vice Chairman is 89 in the chief executive it does all the work is 80 and uses a cane it's a very peculiar place that you people have come a long way to what the hell are you thinking about it's weird and what's happened of course is that is we're standing a bit for some combination of basic morality and sturdy common sense and it's amazing how well berkshire hathaway and the journal for that matter have succeeded with nothing more than a basic morality and sturdy common sense but of course when people talk about common sense that they mean uncommon sense every time you hear that somebody has a lot of common sense it means he's got a lot in common sense and it is much harder to have common sense than is generally thought let me give you an interesting example in the investment world people enormous amount of high IQ people trying to be more skillful or normal imagine another activity that gets so much attention and weird things have happened and years ago one of our local investment counseling shops a very big one yes they were looking for a way to get an advantage over other investment counseling shops and they reasoned as follows we've got all these brilliant young people from Wharton Harvard and so forth and they worked so hard trying to understand business and market trends and everything else and if we just ask each one of our most brilliant men for their single best idea then create a formula with this collection of the best ideas we would outperform averages by a big amount and that's the implausible to them because they were ill educated that's what happens when you go to Harvard important and so they tried it out and of course it failed utterly so they tried it again and it failed utterly they tried the third time and it also failed and of course what they were looking for is the equivalent of the alchemists of centuries ago who wasn't heard glad did the gold just buy a little ad waiter magic walked over to the gold that would be a way to make money oh this counseling shop was looking for the equivalent of turning led into the gold and of course it didn't work I could have told them but they didn't ask me nothing the interesting thing about this situation is this is a very intelligent group of people what's come from all over the world you've got a lot of bright people from China where people tend to average out a little smarter and the issue is very simple there's no question why did that plausible idea fail just think about it you've all been too fancy educational institutions I bet you there's hardly one on the audience who knows where that thing failed that's a pretty ridiculous demonstration I'm making how could you not know that it's one of the main activity of America there's an obvious important failure surely we can explain it you have to have stayed awake in your freshman college courses to answer the question but if you ask that question as a department of finance the leading place the professor's wouldn't answer it right now I'm going to leave you that question because I want you perplexed and I will go on to another issue but that's when you should be able to answer it shows how hard it is to be rational on something very simple how hard it is how many kind of crazy ideas people have and they don't work you don't even know why they don't work even though it's perfectly obvious they've been properly educated and by the way my definition is being properly educated is being right with my professor is wrong anybody can spit back what the professor tells you the trick is to know what he's writing when he's wrong that's the properly educated person and of course they're frequently wrong particularly in the soft sciences in fact if you look at a modern elite institution it's fair to say that a lot of the faculty are a little crazy it's so left-wing now in the humanities and it's very peculiar that's another thing why should 90% of the college professors in the amount of these to be very left-wing I leave that question for you too but it happens and another issue of course that's happened in the world of stock picking where all this money and effort goes into trying to be right trying to be rational is that we've had a really horrible thing happened to the investment counseling class and that is these young exponents have come along and they basically beat everybody and not only that the amount which they beat everybody is roughly the amount of a cost of running the operation and making the changes in investments so the whole profession is basically being paid for accomplishing practically nothing this is very peculiar this is not the case with bowel surgery or even the criminal defense bar of the law or something that we'll whole profession where the chosen activity they've selected they can do anything now in the old days the people in the profession always had some of this problem and they rationalized as follows we are saving our clients from the insurance salesman and the stockbroker the standard stockbroker for it serves the active trader and they were saving people from the life insurance salesman and the hustling stockbroker who liked their trading and I suppose in a sense that the investing class is still saving those people everyone even worse fate but it's very big profession that worked so hard and it's so admirable and the members of which we are delighted with may marry into our families and they just can't do what the is really trying to do which is get those average results how is that profession handling this terrible situation as index investing gets more and more popular and including a lot of fancy places that's very simple answer they're handling with denial they have a horrible problem they can't fix so they just fear this is non-existent this is a very stupid way to handle a problem now it may be good when you're thinking about your own death what you can't fix just deny all the way to the end but in all the practical fields of life this problem thoroughly understood is half solved or better cope with so it's it's wrong to have all these people in just a state of denial doing what they've always did year after year and hoping the world will keep paying them for it even though none man context is virtually certain to do better it's a very serious problem and think of how much New York say needs a flow of money from finance what happened manager more trading spreads and so on and so it's a weird situation and of course it's it's unpleasant big investment counseling shops are some of them shrinking and some go out of business and the value investors of course so many of I know because we came from that tradition the value investors were honorable are quitting boom and what worked for them for years stopped working they their honorable people they just quit and they're also rich so it makes it easy but those who aren't rich or have a hell of a problem and it costs about $50,000 to send that happen to send your kid to preschool not deductible and that's just the start of an endless procession of years of past expense so if your game is money management you have a serious problem and I don't have any solution for this problem I do think that index investing if everybody does it won't work but for another considerable period index investing is going to work better than active stock picking where you trying to know a lot now the place like Berkshire Hathaway or even the Daily Journal we've done better than average and now there's a question why has that happened why has that happen and the answer is pretty simple we tried to do less we never had the illusion we could just hire a bunch of bright young people and they would know more than anybody about canned soup and aerospace utilities and so on and so on and so on we never had that dream we never thought we could get really useful information on all subjects like jen kramer pretends it tends to have and we always realized we worked very hard we can find a few things where we were right and the few things were enough and that was a reasonable expectation that is a very different way to approach the process and if you would asked Warren Buffett the same thing that this investment counseling did give me your best idea this year and you just follow Warren's best idea you would find it work beautifully but he was trying to know the hole he would give you one or two his stocks he had let more limited ambitions I had a grandfather was very useful to me my mother's grandfather and he was a pioneer he came out with no money but youth and health and took it away from the Indians he fought as a black boy he was a captain Blackhawk Wars and he stayed there and he bought cheap land and he was aggressive and intelligent and so forth and eventually he was the richest man in the town on the bank huge family very happy life and he had the attitude having come out to Iowa when the land was not much more than a dollar an acre and having stayed there until that black topsoil created the modern rich civilization and some of the best land in the world his attitude was the favored life like his when you're located in the right place he just got a few opportunities if you lived to be about 90 and the trick in coming out well was that were your fair share that came along when they did and he told that story over and over again to the grandchildren around him all summer and my mother who had no interest in money remembered the story and told it to me but I'm not my mother's natural imitator and I knew grandpa was right and so I always knew from the very first a little boy that the opportunities that were important that we're gonna come to me were few and that the trick was to prepare myself for seizing the few that came this is not the attitude that they have at a big investment counseling thing they think if they study a million things they can know a million things and of course the result isn't almost nobody can outperform an index where as I said here was my daily journal stock my Berkshire Hathaway stock my holdings of Lee Lewis Asian fund my Costco stock and of course performing everybody 95 years old a friend may never have a transaction right they're wrong and that's why it's worked for me and not for them and the question is you want to be more like me or more like them the idea of diversification makes sense to a point if you don't know what you're doing you want the standard result and not be embarrassed well of course you've been widely diverse somebody nobody's entitled a lot of money for recognizing that because it's a truism it's like knowing that two in two equals four and but the investment professionals think they're helping you by arranging a dirt Dirk diversification maybe it could diversify a portfolio and or a computer for that matter and but the whole trick of the game is to have a few times when you know that something is better than average and invest only where you have that extra knowledge and then if you get a few opportunities that's enough carry on three securities and JP Morgan Chase owns a hundred you know it's what's wrong with only a few securities well no he says he lived going town and you owned stock and three of the best enterprises in the town isn't that diversified enough the answer is of course it is they're all wonderful places and that fortunes formula which got so famous which is a formula to tell people how much to bet on each transaction if you had an edge and of course the bigger your edge the more close the transaction was to a certain winner the more you should bad and of course there's mathematics behind it but of course it's true it's perfectly possible to buy by only one thing because the opportunity is so great in such a change or only two or three so the whole idea diversification when you're looking for excellence is totally ridiculous it doesn't work it gives you an impossible task what fun is it to do an impossible task over and over again I find it agony I just who would want to do it and I don't see the way my father had a client he was a client whose husband and the guy my father sold so company this was one of the richest people in town I'm in a little depression and what she had was a little soap company and a best mansion and Omaha the best neighborhood they sold the soap company she had a mansion him the best neighborhood and $300,000 but $300,000 in 1930-something was an incredible amount of money a little hamburger was an echo a big hamburger was a diamond the all-you-can-eat cafe would feed you all you this day life or two bits a day I mean 300 thousand well she didn't hire investment counselors you knew it wonderful old woman and she just took that and she divided into five chunks and she bought five stocks I remember three of them because I probate in her estate and it was almost General Electric's one was now one was DuPont got the other two then she never changed those stocks she never paid any advisor she never did anything and she bought some municipal bonds he never spent her income and she bought some isso bonds from time to time with Leigh Ann she died in the 50s she had a half dollars no costs no expenses I said how did you decide to do that and well she said I thought electricity and chemistry were they coming things he just chunked it all in and sat on her ass I always liked that little one my kind of a girl and but it's rare you know but if you stop to think about a thing of all the expense and palabra she didn't have to listen to and all the trouble she avoided zero costs and of course but people don't realize because they're so mathematically illiterate is if you make five percent and pay too little bit to your advisors you're not losing 40 percent a year future you're losing 90 percent because over a long period of time that little difference this advantage to you it's important for somebody who's a long-term holder not to be paying a big annual performance and of course there are a few big-time advisors now are using indexation very heavily and of course they're prospering mightily and of course every time they get somebody it's just agony for the rest of the investment counseling business and it's a very serious problem and I think these people were used to winning is the old time value investors who are now just quitting the profession that's a very understandable thing to do I regarded as more noble and staying in well you know playing along with the denial it's an interesting problem I can see I'm trying not trying to make your morning I'm just trying to describe things the way they are and but this business why does Lee Lewis succeed so mildly well partly he's sort of a Chinese Warren Buffett that really helps and partly he's fishing in China not in this over searched over popul is highly competitive American market and there's still pockets of ignorance and lassitude in China that gave him so unusual opportunities at first rule and fishing has always been fish where the fish are and the second rule of fishing has always been don't forget rule number one and was good and the rest of us are like cod fishermen are trying to catch Cod where the fishermen fished out it doesn't matter how much you work when there's that much competition every little idea I see in the world some are going after ice at once an investment committee at the University of Michigan and then came one of their successful investors located in London and what had this investor done in London he decided to invest in sub-saharan Africa and the only marginal securities were a few banks that traded in the Pink Sheets so he would buy very tiny quantities of these banks and every time some poor person got tired of having the money in the mattress and put it in a bank he did a little better and of course you made a lot of money he was nobody else was missing little tiny banks in Africa but the net was soon filled what the hell do you do for encore after you put your class play a bunch of little tiny banks in sub-saharan Africa the niche gets failed quickly okay and how many wonderful niches those are gonna be when some guy in London this tiny little bank stocks in Africa it's hard and then if you take the modern world where people are trying to teach you how to come in and trade actively in stocks well I regard that is roughly equivalent to try and do see you but you'll start off on heroin it is really stupid and when you're already rich to make your money by encouraging people to get rich by trading and then there are people on the TV another wonderful place and they say I have this book it will teach you how to make 300 percent a year and all you have to do is pay for shipping and I will mail it to you how likely is a person who had suddenly found a way to make 300 percent a year we trying to sell books on the Internet to you it's ridiculous and yet I've described modern commerce and the people who do this all day think they're useful citizens the advertising agents invent the lingo insurance they say well they say the two people who shifted from guy go to the glutes insurance company say four hundred dollars each but they don't tell you is there only two such people the whole United States and they were both nuts but they mislead you on purpose and I get tired of it I don't think it's right that we deliberately mislead people as much as we do let me tell you another story that I think it's an interesting one of the modern life but this goes back to a different time and as man has this wonderful horse it's just a marvelous horse got an easy gait and good-looking and everything it just works wonderfully but also occasionally just gets so he's dangerous and vicious and causes enormous damage in trouble and breaks arms and legs for this writer and so on and he goes to the bet and say what can I do about this horse that says that's a very easy problem and I'm glad to help you what should I do and the man says the next time your horse is behaving well so it well think of how I immoral that is and haven't I just described what private equity has to do when private equity has to sell something that's really troublesome they hire an investment banker and what does the investment banker do he makes a projection you can't I have never seen such expertise and my whole life I just created in making projections you know that's not banking there is no business so lousy it can't get a wonderful projection and but is that a great way to make a living to have phony projections and use it to make money out of people you look right into the eyes of I would say no and by and large Warren I we never tried to make money out of the dumb se out of stupidity of our dumb buyers we tried to make money by buying and if we were selling horseshit we didn't want to pretend it was a cure for arthritis and I think it's better to go through life our way instead of theirs and III I think it's always been this way there's always been chicane rethinking the carnival's ugly the carny operator think how much trickery there is a carny operation and people just seek out the weaknesses of their fellow man and take advantage and you have to get wise enough so you avoid them all you can't avoid them if they're in your family I have no solution to that one but where you have a fair choice there just so many people it should be avoided my father had this best friend and client and he also had this other client who was a big blowhard and he was always working for the big blowhard and he wasn't ever working for his wonderful clown whom I admired and I said why do you do this and he said Charlie you idiot he says the big board is an endless source of legal troubles he's all oh he's in trouble overreaching and misbehaving and so forth grab my baton treats everybody right the employees the customers everything he gets involved with some psychotic he walks over there and makes it a graceful exit immediately it's a man like that doesn't need a lawyer and my father was trying to teach me something and it really worked I spent my whole life trying to be like grant my Faden and I want to tell you that works it really works Peter Kaufman is always telling me if the crooks only knew how much money you could make me being honest differently it's Warren has a wonderful saying I like is you take the high road that's never crowded and it's work take the daily journal corporation we made quite a few millions of dollars out of the foreclosure boom because we published legal notices and we dominated the publication of foreclosure notices in the worst real estate depression in the history of modern times and we could have raised our prices at the time and made more tens of millions of dollars but we didn't do it you know when your fellow citizens are losing their damn houses in the worst recession Charlie Munger billionaire raises prices but look wowsie on the front page of the paper and for people around the office too it should you do it and the answer is no of course not but if you want your Warren always said it's probably always a mistake to marry for money and it's really stupid if you're already rich and it's really stupid when you're already rich to get a reputation of being total no-good Rick garran always loved the story about the guy who all his life he died now is the time in the funeral ceremony when somebody says something nice about the deceased and nobody came forward and nobody came forward nobody came forward finally one guy stood up he said well he said his brother was worse well you could laugh but there are people like that when Harry Cohn died here the same was a everybody went to the funeral to make sure he was dead and so it's there are a few simple truths that really work and when it gets to this difficult business the daily journal is in I would say it is a real pleasure to be serving these courts and agencies they need the automation other people are trying to take advantage of ways that we aren't and we're struggling against the odds a little tiny company and we're taking a lot of territory that's slow going but the prospects are good and of course the nice thing about ring riches it doesn't matter if it's a little slow and you know how do we get rich well we remember grandpa hangin one of the few opportunities came along we reached out the seized it think of how your life works in my life to give another example the mongers would have twice the assets they now have if I hadn't made one mistake of omission back in the 1970s and really stupid and I got I blue they would have doubled my brother net worth that is a normal life you get one or two how things work out we all know people are out married that I mean I suppose there's so much better think what a good decision that was for them way more important than the money and I love them did it when they were young just they stumbled into it no you don't have to stumble into it you can be very careful a lot of people are wearing signs Danger do not touch and people just charge right ahead that's a mistake what you can laugh but it's still a horrible mistake and it's been fun for the people on this board to know one another work on these oddball things and handle life's vicissitudes of course it's very peculiar that we're so old I mean imagine a place where gang woke us is one of the young men guys wife is still in golf champion but that's them because she's good when she's old I mean yeah it's it's an amazing group that's the example to imagine being as old as impaired as I am and having a pretty good time how does that happen well you that is another strange to a couple of other stories to could you like stories here's an apocryphal story that has very instructive a young man comes to visit Mozart he says Mozart nice is I want to write symphonies and Moses how old are you in the Man 723 Mozart says you're too young to write symphonies he said the Mozart he says you were reading somebody's when you were ten years old yes but I wasn't asking other people how to do it now there's another mozart story here's the greatest musical tell him maybe that ever lived and what was his life like it was bitterly unhappy and he died young that's the life of Moser what the hell didn't what's our do to screw it up make himself what he did to things that are guaranteed to create a lot of misery he overspent his income scrupulously that's number one that is really stupid and that other thing was youthful jealousies and resentments if you'll spend or spend your income and be full of jealousy and resentments you can have a lousy unhappy life and die young all you've got to do is learn from Mozart you can also learn from that young man asking Mozart how to write symphony they drove the matter is that not everybody can learn everything some people are way the hell better and of course no matter hard you try there always some guy that use more some guy or gal and the myalgias so what do it does any of us need to be the very top of the whole world it's ridiculous and another thing that people do like their guard is amazing is they build these enormous mausoleums I think they figure they want people to walk by that mausoleum and say gosh I wish I were in there anyway you can see we've had some fun as we go along and it works so well but if you actually figure out how many decisions were made in the history of the daily journal Corporation or the history of Mercer Hathaway it wasn't very many per year that were meaningful it's a game of being there all the time and recognizing the rare opportunity when it comes and recognizing the normal human allotment is to not have very many now it's a very confident bunch of people who sell securities who act as though they've got an endless supply of wonderful opportunities well those people are the equivalent of the race dragged out there not even respectable it's not a good way to live your life to pretend to know a lot of stuff you don't know one pretend astonishing and my advice to you is avoid those people but not if you're running a stock brokerage firm you need them but it's not the right way to make money and controlling the costs of living simply and that was the secret how much money Warren and I had tiny little bits of money we always under spend our incomes and we invested in me well you know if you end up rich it's not very complicated and now there is a part of life which is how do you scramble out of your mistakes without them costing too much and we've done some of that to look at Berkshire Hathaway think of its founding businesses a doom department store Doom New England textile company Doom trading stamp company out of that came birch or Hathaway now we handle bows losing hands pretty well when we bought into the Murray chamber but of course that's came from changing our ways and getting into the better businesses and it isn't that we were so good at doing things that were difficult we were avoiding things that were difficult things that are easy by the way when we bought the daily journal what was easy what we're doing now in this software business is difficult but due to the accident of these good associations on the back of these old colleagues who lived so long we're doing pretty well on the new business it has potential and it's fun to do and how many declining newspapers have hundreds of millions marketable securities lying around and a new business with some promise we're like the last of the Mohicans oh he's giving it to somebody important well I'll take some questions now I we need some system of order I have a question yeah somebody want to point to these people all right go ahead all right good morning me tomorrow happy but I'm tired to you and we wish you a great held until work sure split shares my name is Anne Lee and I'm from Hanoi Vietnam in the book Outsiders we lamp toward I least eight CEOs that achieve superlative for comments to the sp500 and their peers so other than meter Buffett and me to Murphy did book sure you invest in all other six companies of the other CEOs and if not why I didn't get that so I think I just didn't understand the question so machinist we lambtron Diocles HCL's and along with them is eight companies and two of them about you either way and capital cities so I want to ask that among the other six companies did book sure you invest in them at one time and if you don't need best I mean if you didn't invest in one of the after six company what has the reason for that well I can't answer that question I don't know the other six companies and but I would say generally speaking as things have gotten tougher we've been better sitting on our asses what we have then we have in buying new ones it's been hard to buy new ones we haven't bought a whole company of any size since we bought the truckstop operator so if you're having trouble with the present time with anything join the club good morning yeah please a comment on proposed legislation in Washington to restrict or tax share buybacks to tax what Rick tells a story about an old Irishman they used to steal from the church and drunk all the time he's dying the precess if it renounce the double and he said I can't do that because in my condition I shouldn't defend anybody and I don't think I should you get me started on politicians I may be in politic so let's go to another subject hi mr. Munger thank you for taking our questions today my name is Paul Smith from Los Altos my question is about commercial banks many of us here I suspect have tailgated you and mr. Buffett into some wonderful banking investments thank you for that my question is about smaller banks if you look at banks greater with assets greater dependability us and go up and sort of stop at the super regional level there's about 250 of those banks and my question is that an ingrained that you would think applying the principles of value investing that is likely to maybe yield one or two you know great businesses at a yes oh I had a second question iris the second part to that the next question whatever it is right here over here Charlie so you and warm adapt advocated for decades the CEO should tell shareholders everything they need to know to value a business from visiting and calling courthouses around the country I've personally seen the success that you've had you know ordered Khan excuse me contracts against larger contracts against larger competitors for jti however your opaqueness regarding contracts that have been awarded but not completed leaves a wide range that an estimated value could fall for so if a shareholders unwilling to cold-call fifty courts around the country to find these contracts that haven't been accepted yet could you please provide a little bit of detail for us shareholders as far as the willingness for courts to accept these have you have you had any contracts that haven't been accepted after you put in the work and it's very complicated I don't report to understand each one because I've trusted Gerry and the people who are doing it but generally speaking I can see that the trend is favorable but more than that I can only say you would be horrified if you watched it up close how difficult it is it's difficult but in spite of its difficulties we're doing pretty well but we haven't got any magic wand if you read all the reports if I read all the reports in great detail and spend all my ever trying to understand it I wouldn't understand it very well so I think your chances are very poor thank you yeah Charlie yeah one of my favorite lines from you is you want to hire the guy with the IQ of 130 that thinks it's 120 and the guy with an IQ of 150 who thinks it's 170 will just kill you how do you how do you assess someone when making a hiring decision of course I want the guy who's who understands the guy who doesn't on the other hand I learned something terribly important in life I learned that for Howard Ullman so you know what he used to say never underestimate the man of what were estimates himself these weird guys who overestimate themselves occasionally knock it right out of the park is a very unhappy part of modern life but I've learned to adjust to it I have no alternative it happens all the time but I don't want my personal life to be a bunch of guys who are living in a state of delusion occasionally win big III want the prudent person I Charlie I'm Philip from the Philippines early part of your talk you mentioned about Lulu what did you see in him versus other investors in China because in his biography it looks like he's more fun outsider and how similar or different he is versus Ted comes or Ted Weschler and can you comment like because last year gave an interview with him in China or is there any reason why you gave that interview last year well I did it because he asked me and I sometimes do that I'm foolish that way the answer is Lily was normal he's the Chinese weren't Buffett he's very talented and of course I've enjoyed that way 95 years I've given Munger money to some outsider to run once in 95 years absolutely of course out of the park it's very remarkable it's also pretty picky and of course once I've got Li Lu if I marry him well so am I gonna pick and by the way that's a good way to make decisions that's what we do if we've got one thing we can do more of we're not understand anything that's not better than that simplifies life a great deal because there aren't that many people better than Lido so I just sit it's amazing how intelligent is to spend some time just sitting a lot of people are way too active good morning mr. Munger you said in the past that you expect the u.s. to adopt a single-payer health care system or Medicare for all the next time that Democrats control all three branches of government what will this mean for health insurers hospitals and medical device companies it'll still be a big business but it will be a helluva mess the existing system is so over expensive and over complicated and has so much unnecessary cost so much unnecessary over tear of the dying so much over treatment don't be a best left alone so much unnecessary expense yeah the other hand it's the best system there is in the world in terms of the quality at the top so it's a very complicated subject but it's a hell of a mess I find it a new moralizing to see in Singapore they spend 20% of what we spend in America on medical care and their system is way better and what they're doing is just the most elemental common sense but of course it was created by one Chinese guy it was in control of course it's more intelligent then our outcome of our political process that Sambora system was created by the Lee Kuan Yew of course it works better but to have it cost 20% and work better you know advanced plays like Sam horse there's a lot to be demoralized about in terms of the potential of our medical care system and of course this is what our politicians are good to fixing systems like that so if you don't like it now I confidently predict you won't like it later either still on your left charlie this my name is JD I'm from Phoenix Charlie I read a lot of the stoic philosophers last year Epictetus Seneca Marley what you would there's a lot to be stoic about agreed and as I gleaned lessons from them there was one name that kept coming to mind and that is Munger so I wonder can you talk about baby link Marcus Aurelius all right can you talk to me about the influence that the Stoics had on you and a lawyer and advice from them a lot a lot including epictetus who started as a slave no I like those old Stoics and part of them of the secret of a long life that's worked as well as mine is not to expect too much of you in nature a lot of problems and they have your life full of seething resentments and hatreds it's counterproductive you're punishing yourself and not fixing the world can you think of anything much more stupid than trying to fix the world in a way that ruins yourself and doesn't fix the world it's pretty still but I just don't do it I have a role for politicians it's it's a stoic rule and like what climate to use is the sort of rule so well for me I always reflect never so bad you don't live to want them back when I was young the California Legislature was full small-time insurance brokers and lawyers looking for an unfair advantage they're being interred here and came restaurants and prop with prostitutes and bars by racetracks and liquor distributors and so on and so on fade in fade out we have a different kind of a legislature now I just want all those old crooks and lobbyists prostitutes back are you laughs but you young people you're gonna live to wish we could have Nancy Pelosi and Donald Trump we're immortal good morning mr. Munger rajab rambha from the San Francisco Bay Area we all know you're an avid reader could you share a reading recommendation for us it's potentially a new one that may be fundamentally change your viewpoint on something but I do find that they're amusing anecdotes and so forth that I occasionally read them like but I like the old anecdotes pretty well too it's so obvious some of these pithy stories the storytelling really works to get Messi's around one of the interesting things is look at our modern politicians and then think about Abraham Lincoln who in our modern politician reminds you of Abraham Lincoln in either party Lincoln at one time was hired by some guy whose partner had died leaving Brangelina no money and wife and three children and he owed some money to his surviving partner came to Lincoln and said I want you to collect this money and Lincoln said to this guy he said well he says you look like an enterprising fellow who can get that much money back pretty easily through a little effort and if you want to bring a little money out of this for two or three shows you'll have to get a different kind of lawyer does that remind you of any of our modern politicians that was Abraham Lincoln what a story no wonder he's remembered and you know who deserves the credit for Abraham Lincoln who never gets it this stepmother Abraham Lincoln was the child of two illiterate but the stepmother who is father just mired in desperation to help raise the children she took a shine to Lincoln and so I was bookish and she helped him all the way along I am going to donate a picture of that stepmother eventually to a particular place because I'm I admire what that stepmother accomplished in life imagine being responsible more than any other person Lincoln next charlie my name is Jung Lee from New York and thank you so much and I wanna say first a happy Valentine's Day thank you for sharing your wisdom and secret to success for to life for business for investment that is tremendous value for myself and many of our attendees here my question is about intellectual property because they are lawyer by training given the complicated landscape in this field is there a better way to share international property across relations especially in the case of Huawei II is the bitter fight are the better legal framework to handle intellectual properties thank you well you know I don't know that much about the world of intellectual property I've made my way in insurance furniture stores papers so other people are good at the lecture and a good intellectual property I'm go to them waiting subjects I'm not good at and one of them is intellectual property I'm not surprised that the Chinese are stealing a little property we Americans did it all the time we stole Dickens work we didn't copy just reprinted his copyrighted stuff we stole only technology from the English textile manufacturers people have been pretty aggressive about wanting to know other people's ideas this is an old problem I do think that allowing intellectual property to have these profits is desirable but the exact complexities I don't so much time thinking about hi Charlie and thank you for being here today and sharing your knowledge with us in last year's daily journal meeting you talked about one of the five aces of a money manager was a long runway I'm I'm young and have at least hopefully a 40 year runway ahead of me or your legs I passed my physical with flying colors so thanks a lot I'd like to compound my money at the highest rate and then give most of it away at the end which money managers would you recommend besides you and Warren thank you well I just said I've only hired one myself in the lifetime I don't think that makes me an expert although I must say that wasn't did work out rather well no I can't help you everybody would like to have somebody manager that would make him rich think of what it does of course we all would want that I would like to be able to turn lead into gold but it's hard it's very hard if you're finding it difficult that just shows you understand it next Charlie and Peter Kaufman I just actually I don't have a question I just want to thank you both for putting together Pete poor Charlie's Almanac it has been an incredibly foundational book in my life and has really helped inflect my thinking on many different things so thank you both very much for your work on that well it really was Peter Kaufman's idea he did the whole damn thing and he paid for it himself being a rich and eccentric man and I just wish that one change in Peter Coe my Peter Kaufman has made me adored in India and China I wish the hell he can do more for me at Los Angeles the Chinese version of her Charlie's alma has been pirated enormously unchecked totally pirated but the legal sales are what three hundred forty thousand or something Peter's made me very popular in China but he does nothing for me in Los Angeles hi Charlie question for you over here you've paraphrased you've paraphrased Ben Graham and saying that good ideas are wonderful but you can suffer terribly if you overdo them yes how do you balance that against the risk that you potentially forego an opportunity altogether or are late to enter into an opportunity for fear of not materializing problem is thoroughly understood as half solved the minute you point out there's a big tension between good ideas yet over done so much they're dangerous and good ideas that still have a lot of run way ahead once you have that construct in your head and start classifying opportunities into one category the other you've got the problem I have solved you don't need me you've already figured it out you've got to be aware of both potentialities and the tensions hi charlie yeah my name is Jason here from Toronto Canada and in your letter on berkshires past and future you know you wrote about the principles that have made it for extra successful over the years my question is why is it that Berkshires organizational principles as a holding company have not been copied more by others given its incredible success and track record thank you well it's a good question I think the main reason is it looks impossible if you were in Procter & Gamble but its culture and its bureaucracy and you said how can I make Procter & Gamble more like Berkshire Hathaway it would go me too hard well that's just too hard there's too much momentum but you raised by your question a very interesting thing that deserves more attention when it gets one of the reasons that Berkshire has been so successful is practically nobody at headquarters we have almost no corporate bureaucracy you know a few internal auditors who go out from the air and check this or that but basically we have no bureaucracy having no bureaucracy is a huge advantage the people who are running it are sensible people think how poorly all of us have behaved in big bureaucracy even though we have a lot of talent because we couldn't change anything so bureaucracy has a standard bunch of evils on a standard a bunch of stupid wastes and so forth and avoiding it is hugely important and of course this tendency of successful places particularly successful government ways is to have more and more bureaucracy and of course it's terribly counterproductive and of course the bureaucracy the individual bureaucrats they're benefiting from more assistance more meetings more there's more that so what looks like poisoned us from the outside because the decisions are so terrible looks wonderful for them it's opportunity and I've just described that a great tragedy of modern life modern great success bureaucracy and successful bureaucracy means well you're in stupidity how could it be otherwise that's the big tension of modern life and some of these places that go into a stupid bureaucracy and fire a third of the people of another place works better they're doing the Lord's work but you wouldn't think so if you were working there and but there's a lot of there's a horror and waste in bureaucracy and it's inevitable it's as natural as old age and death that cheerful go on to the next one hi Charlie my name is Frank at this moment right now I'm researching what makes partnerships successful such as you and Warren and in particular I'm researching personality psychology I was wondering what your thoughts are on that if you have any thank you to talented people working well together of course that works better good morning my name is Matthew Peterson Matthew Peterson from Manhattan Beach mr. Munger in the past you've praised the significance of cultures at firms like Glen arcuate and Costco what view what are your views on the culture at Daily Journal and in particular Journal technologies and similar to your Berkshire 50 or essay can you share a multi-decade vision for general technologies Thank You general technologies came into be I guess had a weak moment in Warren Garin talked me into it and it worked because Jerry took a hold of it and word miracles so I don't know so much credit it's Garon I just clap clapping hello mr. monk I'm on your right you speak about the importance of fishing in waters with ample fish if you were starting out today what you know see would you be fishing in other than in China of course well other than China but if there's one good place in the world that's more than my share there are others I'm sure but it's hard for me to believe that they get better for the mongers in China I can't help you I thought my problem you'll have to saw yours by the way the water is fine in China and some very smart people are waiting in and in due course I think more will wait in the great companies of China are cheaper than the great companies in the United States hi mr. Munger my friend Mikkel and I were from Barcelona and I have a question for you regarding long-term investment and compound interest so I try to remember if it was your Einstein that said that compound interest was the strongest force on earth and in the last few years with very low interest rates out there it's been difficult to find opportunities for having a long term in compound interest based strategy so beyond investing in Berkshire body investing or index funding where would you invite us to find opportunities for long term investment where compound interest is really that horse well my advice for a seeker of compound interest that works ideally is to reduce your expectations because I think it's going to be tougher for a while and it helps to have realistic expectations makes you less crazy and I think that you know they say that common stocks probably aftermath of the Great Depression which was Thor's the english-speaking world in hundreds of years to the present time maybe an index is produced ten percent that's pre inflation after inflation and maybe seven percent or something and they're seen seven in ten in terms of those consequences are just hugely dramatic over that long period of time and if that's seven in real terms that may achieve starting at a perfect period through the greatest boom in history starting now it could well be three percent or two percent in real terms it's not unthinkable you'd have 5% returns and three percent inflation or some gas becomes like that and so the ideal way to cope with that is to say if it handles if that happens I can have a happy life because why should you be happy in spite of the back that the civilization wasn't quite as easy as it was right generation and now beyond that when it gets more difficult how should you do it well the answer is me because it's gonna be very difficult you should work at it oh it gets you a 6% for a lifetime of work instead of five you should be cheerful about it you want to hit it out of the park easily you should talk to Jim Cramer hi there Alex Rubalcaba over on the left here hi building on the question about the corporate culture at Daily Journal corporation it's great to see a new board member and I was wondering if we could ask the other board members about the long term succession plan for the board another speaker hi I'm curious has the berkshire hathaway equity portfolio outperformed the S&P over the last five or ten years and if it is not why wouldn't a Berkshire just invest in the SP for its equity portfolio hi I think Warren after all a mere boy of 89 things that Mercer can do a little better than the S&P from this point I don't think many people can but you may be right about himself and the team he has in place it won't be by huge margins that I confidently predict I'm mr. Munger Andrew Pogue over here on your right just a question on how you think about downside protection and how do you know when to exit an investment I Berkshire I bought in 1966 oh I've been a good picker but other people know more about exiting I'm trying never to have to exit so you're you're talking I think there is a working styles of investments that worked well with constant ex exits just hasn't haven't have been my forte so I'm no good at exits I don't like even looking for exits I'm looking for holes think of the pleasure I've got from watching Costco March ahead such an utter meritocracy and it does so well why would I trade that experience for a series of transactions and maybe a little first I'd be less rich not more after Texas the second place it's a much less satisfactory life than rooting for people I like and admire so I say fine Costco's not good exits good morning charlie you mentioned in an interview with CNBC in May 2008 een Bookshare is a little bit too restrained on buying more Apple stock to use the opelu so do you have any new comments on Berkshire is what picture is too restrained on buying more Apple stock its owns document hypo Apple OS oh yeah this new Peluso and do you have any more comments new comments on Apple no I don't think the world would be improved by more comments for me on Apple you have a very patient man and I know a lot but I don't know everything I like Apple but I don't feel I'm the expert good morning mr. Munger my name is JC I am 11 years old and I come from China my question is also welcome my question is also about Apple so last year last year you said that you wish you had more of Apple stock but now it's price has declined by a lot so what is your opinion about its moat or the competitive advantage why do you think it has declined thank you very much I know enough about it so I admire the place but I don't know enough to have any part of our secret is that we don't attempt to know a lot of things we have a I have a pile on my desk it solves most of my problems it's called the to hard pile and I just keep shifting things to the to hard pile every once awhile easy decision comes along and I make it that's my system everything was the two hard files which I make probably hi Charlie Sam from Chicago on your left when you're assessing the quality of a business do you place more emphasis on quantitative metrics such as return on invested capital or qualitative ideas like brand strength or quality of management well we pay attention to qualitative metrics and we also pay attention two other factors generally we like to pay attention to whatever is important in the particular situation and that varies from situation to situation we're just trying to have that uncommon sense I'm talking about and part of our uncommon sense is just to refer a lot of stuff to the too hard pile the simple life is the obvious right answer but most of America ends up like Mozart in debt and overspending how did you maintain the discipline to live the simple life in the face of all these other temptations I was born this way good morning mr. Munger my name is on the left my name is Benjamin Jovic and I'm an engineer at BYD and I was interested to hear your perspective on the current state of infrastructure in the US and just some areas of growth that you might see in the future for infrastructure thank you a big deal practically everybody in China where me the idea is so active by the way the Daily Journal on some byd but be YDE is going to be huge and electric vehicles they're already huge and they're going to be much more huge and then they're going to be huge in monorails which is also a business as time has come and they're also huge in these lithium batteries and losing batteries re improved and materially improved and the place is full of fanatics and by the way they're being supplier to Apple and Huawei and they're very satisfactory some wires all those things so I am terribly impressed with you IDs been on one of the real pleasures of my life to watch on who's the eighth son of a peasant and older brother recognizing a genius had been family he just gave up everything in life to nurture that brother genius now that's Confucianism and by the way Confucianism will do a lot better for civilization the important foundation did you know Confucianism was strong family ethos like that is a really constructive thing and confusion as a partly created BYD that older brother Huang Shan Fu's was a hero and of course what one shampoo is done is a miracle and of course that was a venture capital type investment we bought marketable securities not birch sure but and it's been a wonderful investment and it's been a very admirable company and I like being part of something that's inventing better lithium batteries and better mount rails and so on and so on so if you work for bi d or a very fortunate person and you're gonna have a wonderful life watching and participating you can hardly have a better employer at least if you like demanding it cheaper than a day or weeks hi mr. Munger thank you for taking all of our questions you mentioned earlier that when you had an opportunity to raise prices you didn't want to raise them during the Great Recession because it didn't seem right for Charlie Munger to be raising prices on people that were losing their houses so I wanted to thank you for that as well and I wanted to ask you about those I wanted to ask you about the causes of the Great Recession specifically the credit ratings agencies and your 24 standard causes of human misjudgment I think they hit them pretty much all the Pavlovian association denial you're right about that the financial behavior and our leading financial institutions was inexcusably awful and when other people were regularly in a disreputable urban fashion everybody piled in that they didn't want somebody else we making yes participating the standards and lending the standards and managing disgusting intellectually disgusting morally and of course it caused a whirlwind that could have taken the whole civilization down into a great depression and that's a pretty major sin and none of those people has been punished I it's unusual I agree so thoroughly well a little forum but I was wrong they have that big mess and I haven't nobody punished mr. Munger I've written a blueprint for a non-profit credit ratings agency I'm not gonna ask for your money because I understand you're invested in booties and you probably do not want to give money to a non-profit that's gonna spend some time possibly criticizing Moody's ratings but I'd love to get your feedback it's only ten pages I'll hand it to your people after the event thank you what is the V Bagon the feedback on a blueprint that I've written for a nonprofit credit ratings agency it would be a verifier of ratings issues very things that far out I usually leave the other people you know and not because Berkshire Hathaway owns a big chunk of one of the credit rating agencies but I can see why the existing situation would draw you draw your concern but there's some human problems I don't want to bother with it and you have just produced one but you're right it wasn't perfect hi mr. Munger my name is William and ricean down the middle I'm a student at the University of Southern California and my question relates the country's national debt we've just recently passed twenty two trillion dollars in our debt to GDP is above 100 percent now at a time when our GDP may be near a peak and interest rates may be rising and it seems to me that politicians seem fine running the deficit because they won't be there when the crisis comes and consumers are happy to take a deficit because it's better to consume now than tomorrow my question is do you think is that there's something we can do about this and if so what should be done or is human psychology such that until the crisis is upon us it's hard to imagine anything gets done thanks so much well that's a very interesting question the whole science of economics had no idea 15 years ago it would be possible to print money on the present scale and get so awash in internal debt as we have certainly in a place like Japan which is way more extreme nobody dreamed that was possible and the people who did dream it was possible I met were a few they would not have predicted 20 years of stasis in spite of everything the Japanese did was very extremely there's a lot that's peculiar and what we're doing and eventually if you can solve all your problems by printing money there'll be some disaster and when it's coming how bad it will be nobody knows nobody dreamed 15 years ago we can do as much as we have now this little bad consequence and Sophie Churchill used to say that Clement Attlee had a lot to be modest about that's the way I feel about the economics profession they have a lot to be modest about they thought they knew a lot that turned out not to be so not to be so and there was a Greek philosopher that said no man steps in the same river twice you know there is different the second time he comes in and so is the man and that's the way where they get a little mix it's not like physics where the same damn principles are your whole body you've the same damn thing at a different time and you get it ever resolved it's complicated and of course you're raising a very important question and of course nobody really knows the answer who knows how much of this we can get by with it my personal bed is that these democracies will eventually borrow too much in cause some real troubles I don't know when hi Charlie I'm Jonathan lo I'm from Shenzhen China I do have a quick question basically a lot of people ask you about how you know how you determine what investment or deal to do and you tell people that you can do this really quickly my question is how do you tell like for example when you look at a money manager or a management company that you're investing if they have the right character or the right integrity how long does that take you to do that and what are some traits that you look for thank you well no I don't look for anybody else so I'm the wrong person Wow what are my chances I'm gonna get somebody better than Lu yeah so I it's very easy for me but you need is only Lu and I don't know how to get you on hi charlie my name is Julia LaRoche last year we saw a record amount of share repurchases and now we're hearing rhetoric out of Washington DC specifically legislation to curb stock buybacks what's your take on stock buybacks and do you think politicians should be telling companies what to do thank you so much well generally speaking I'm restrained in my enthusiasm for politicians telling corporations what they should do but I will say this when it was a very good idea for companies to buy back their stock they didn't do very much and when the stocks got so high-priced and it's frequently a bad idea they're doing a lot welcome to adult life this is the way it is but it's questionable at the present levels whether or not it was smart was that he Lambert's hard to buy back so much Roebuck no love there was a lot of that kind of mistake that's been made hi Charlie my name is Neal Ganta I'm a 20 year old from Kansas and similar to your mozart anecdote I wanted to ask you what advice would you have for someone my age looking to live a long successful life like yourself well I had that much success changing any of my children and I don't think I get to change them give helpful advice to perfect stranger it's hard to improve the next generation and the scattered result is going to be mediocre and some people are gonna succeed they're going to be few that's the way human significance is a lot of human significance will always go to the fuel there's no way of creating a few insignificance to meet the demand and I think personal disciplines personal morality good colleagues good ideas all the simple stuff I'd say if you want to carry one message from Charlie Munger it's this if it's trite it's right all those old work user they all work hi Charlie in the center in the back you point out a great deal of human folly but at least from the perspective of the listener don't seem to be that upset about it has that always been the case and is that a correct perception I didn't quite catch that oh you point out a great deal of human folly but seem to have a sense of humor rather than anger or upsetness about it is that a correct perception and it has that always yeah okay stream its my system I've copied it from the Jews I saw it worked well from them and it was my natural inclination anyway and so no I humor is my way of coping hi Charlie my question is what is your proudest accomplishment in life and why I don't have a single I set out to try and have more uncommon sense than most pretty limited objective and I'm pleased I did as well as I did in that game and if I had to do all over again I think it would be a lot harder I think part of my success was being born in the right place in the right time so I'm not particularly proud of success that kind of came from being bored in the right place at the right time I'm pleased but not but not proud thank you for your time mr. salzman I have a question for you I was wondering if you could please comment on how journal technologies implements the invariant strategy principles things like trust getting employees to go all-in positive sum and win-win relationships thank you very much yeah how do you solve the problems of God first of all you have to deal with each individual because each of each individual each employees and independent contractors that we have to work with each client is different and so you have to relate to their specific circumstance you do not handle it because it's in a checklist or something a little Charlie hold Peter I'm here on your left my name is Darren home from Irvine California this question is for both of you Charlie once said any year that you don't destroy one of your best loaf ideas is probably a wasted year and I like to ask if you both of you destroy any of your beloved idea in 2018 and if so what are they thank you Darren are you destroyed any idea 18 yes if you have destroyed any good ideas in 2018 something different in two different challenge everyday and the good part about my job it changes every day so I face something different I am elected like a newspaper editor I start with the bank blank page every day well how do I go to the next situation how do I solve a particular problem that's my day that's what I do mr. Munger thank you for taking the time to answer our questions in October 2008 a month after Lehman filed bankruptcy and in the depths of the abyss mr. Buffett famously wrote an editorial saying that he was buying stocks and he was bullish on America you're famous for bottom taking Wells Fargo in March of 2009 what made sidewalls to by Wells Fargo in March of 2009 instead of October of 2008 well I had the money and later period and the stock was cheaper those are two very important parts of the purchase hi Charlie my name is Jordan I'm from Canada in the back I've heard that you've started some new real estate developments what are you developing now and what's the little B the key to its success I didn't get that either you hear me Oh real estate that you've started some new real estate developments no I bought some apartment houses a lot of partner houses from her book what's the key to their success then the apartment house is doing well by the way that phrase seemed like a good idea at the time came to me from a man I knew many years ago and five minutes between trains he managed to conceive an illegitimate child by somebody he met in the park our bar car and my father was asked by the young man's father he had a nice wife and three children what about hell were you thinking about you know the young man said it seemed like a good idea hi charlie you know charlie I'm standing to your left thank you for sharing your anecdotes I think everybody loves them Herb Kelleher passed away recently and I'm hoping that maybe you have some anecdotes about herb that you would like to share with us thank you ooh Herb Kelleher the founder yeah well he was a very remarkable businessman I never knew him but he was he was an original and he created an amazingly sound company while drinking one hell of a whiskey and oh yeah a hell of a lot of cigarettes this is not my personal style and to do as well as he did was so much bourbon and so many cigarettes it set a new record in human life so we should all remember Herb Kelleher we all wish we gonna have him so much strength that we could abuse it so much it's still perform it wasn't I didn't get such a hand I regard him as a miracle good morning mr. Munger if you didn't have access to Lilu and to the Chinese exchanges through him like many Americans don't would you feel comfortable investing in the American depository shares of most Chinese companies that are comprised of a VI a structure and offer shareholders few rights and minimal protections from the Chinese government I don't know much about depository chairs I tend to be suspicious of all investment products created by professionals and I tend to go where nothing is being hauled aggressively or merchandised oppressor lairs sold aggressively so you're talking about a world which I don't even enter so I can't help you're talking about a territory I have boy hey Charlie all the way in the back this is John Howell with less Altos so my concern is I've done a lot of research on that banks and you guys have done a great job in helping me but I also saw at large derivative portfolios of these major use of banks are getting quite large on the balance sheets SEC reporting doesn't require much transparency so I thought do you guys worry about this kind of stuff I know you've have in the past and in the banks that you own and then do you worry about other banks as well Thanks well all intelligent investor's worry about banks because banks present temptations to their managers to do dumb things there's so many things you can easily do in a bank that looks like a cinch way of reporting more earnings soon where it's a mistake to do it long-term considerations being properly considered as Warren puts it the trouble with banking is there are more banks than there are good bankers and he's right about that and so I would say just in banks you have to go in at a time when you've got a lot going for you because there'll be a fair amount of stupidity that creeps into banking hey Charlie Jason from San Francisco when you don't have the luxury of picking your negotiation counterparties how do you what's your best recommendation for dealing with somebody who not only won't negotiate rationally but will also criticize you for trying to negotiate wrassle rationally situation I try to sell buy avoidance if I can solve that problem I'd have a line around the block I mean you wouldn't be able to squeeze in here everybody who had an insoluble problem with a difficult person think what we'd all do to solve that one I'm afraid I don't have a solution to that one avoidance is my principal method hello I know mr. monk on your left I'm sorry a term from Taiwan thank you for sharing everything so generously and you do sound confusions and happy Valentine's Day I have two questions for you the first one is both you and mr. poppy worked in puppets grandpa's grocery store a teenage years and do you think early real world and early working experience helped you gave you a strong advantage over other people in this investing profession could you and a second I was able to learn from my dead grandfather great-grandfather when I was a little boy what I learned at a very young age and I was just a kid I can see so the adults around me were nuts and yet they were very talented I can see how much your rationality there was and very talented people and so I got interested in seeking out the patterns of understanding why it happened and learning tricks to cope and so on and I did that when I was a little kid and of course it helped me who has not helped when early started in a promising activity and what activity could be more promising in diagnosing stupidity hey Charlie on your left what level of discount would you be applying to potential investments today thank you they have to accept less than they were used to getting under different conditions just as an old man expects less out of his sex life than he was 20 hello betta manga I want to come back to the William Thorndike books and I now have the list of the eight companies it is General Dynamics work sure Hathaway The Washington Post DC I'd capital cities Teledyne general cinema and Ralston Purina I know that what's another way have the long-term investment in Washington Post and capital cities and have been invested in companies of john malone but white berkshire did not have long-term investment into General Dynamics Teledyne general cinema or Rosslyn after one of the events business contracted nobody else was willing to sell anything except generals which kept selling it higher and higher prices and warren noticed that we had a huge position in General Dynamics made-up words we always admired the founder of Teledyne who is a genius Henry singleton but we had mired him from afar we never invested it was just one of many mistakes of omission hi Charlie Cameron Hamidi from San Diego I was happy to see you at this meeting turn 90 now you're 95 and I hope well I hope you look to be 120 and I always thank you for your positive influence on our lives my question is related to stress and sleep and longevity in business there are what I call criminal competitors you're honest and ethical but the competitor across the street is beating you by cheating and running a massive insurance fraud business and life can cause a lot of stress like it did for Whitney Tilson but you've always seemed to stay cool like Mohnish Pabrai what mental tools do you use to defo 'kiss and keep your equanimity for 95 years how do you detach and even during the Salomon Brothers scandal were you always able to get eight hours of sleep at night well it's not true as a matter of fact I had more difficulty sleeping when I was young but I do have a tip for four I've learned late in life I never consciously blanked out my mind when I tried to go to sleep so I allowed my mind wrestle through my problems and keep me awake very late while I lay in bed wrestling with problems if I didn't sleep well one night I figured what the hell leaves the next night but that was pretty stupid now I actually deliberately blank out my mind I can go to sleep rather easily and I recommend it to all of you it really worked I don't know why didn't get to it before 93 hi Charlie thank you for your answers you gave Robert Cialdini one chair of Berkshire for writing influence and a $20,000 check to Atul Gawande for writing a New Yorker article on health care apologize for any miss pronouncements are there any other writers you gave something to for their writing or ideas I forgot but there aren't many you know Gandhi is a very remarkable physicians person and so is he and so I do that kind of weird stuff occasionally but I don't do it all the time I'm proud of those two by the way hi Sharlee in a spa quit from Virginia if someone can invent a time machine and you can go back and have been there with your version self a 41 year old what piece of advice would you advise your former self now that you are what 74 75 with all the knowledge that you have now thank you well I'd avoid that one mistake of omission that cost me half over the worth I would now have a been smarter I think we all we can all go back and make some decision better and but it's a nature thing you're gonna blow one occasionally my general idea is there's no point in fretting too much about what you can't fix and it's a big mistake you can kill yourself with resentments and hatreds and so on and it's such a simple idea but so many people ruin their lives unnecessarily it's like envy is such a stupid thing to have because you can't possibly have any fun with that particular sound wouldn't let it ever had any fun than envy what good couldn't Envy possibly do for you and somebody's always going to be doing better than you are it's really stupid and so I my system of life is to figure out what's really still but it never employed it doesn't make me popular president Britain's a lot of trouble hi Charlie Alan San Francisco I was just wondering if your comment on the Berkshire portfolio I mean we're here on Valentine's Day listen to a 95 year old we're thinking about health care and why is there so little health care in the Berkshire portfolio and I mean isn't there something that can comment on that they're two pretty good reasons for not investing hi charlie this is sweetheart from San Francisco Bay Area there are a lot of companies in my region which I you know read they kind of produce a winner take it all style of outcome you know do you have any thoughts on such kind of business models have you seen it in the 50s and 60s and any thoughts well I didn't quite get that you do nothing in India where no these are companies which produce a winner take it all type of outcome yes do you have thoughts on what's ideal if you can find one in advance and predict it accurately it's perfect winner take all that's obviously perfect what do you think I do because everybody's looking for the same thing I miss among go oh you talk about identifying your circle of competence and trying to expand it um I'm at a point in my life I don't already know what my circle of competence is so I would like to know how you found the ores I didn't catch that either so you talked about your circle of competence and you should stick to it and try to expand it oh yeah well it's a hugely important thing going the edge it's hardly a competence if you don't know the edge of it you know if you if you have a misapprehension regarding your own competency that means you lack confidence that you're gonna make terrible mistakes so hardly anything is I think you've got to constantly measure what you achieve against what other people who achieve bunt and you have to keep being determined really rational avoiding a lot of self-delusion but after a lifetime observing it I think the tendency to be pretty rational about one's own competency is largely genetic I think people like Warren and I were just born this way now it took a lot of Education but I think we were born with the right temperament to do what we did and I have no way of taking you back and rebirthing you hi Charlie yeah in spite of being partners for so long why is Warren so much richer than you well you got an earlier start you probably a little smarter you worked harder there's not a lot of reasons why it was Albert Einstein poorer than I was we are coming to the end of our a lot of time I'll take one more question and then we'll quit we're through hello mr. bunker I'm Richard Lewis from Culver City you've been very positive on the investment prospects of China and you've said that most of Americans are missing out on China what do you think we're missing and what should we be aware of when we invest in China thank you well what you're missing is there's more opportunities there than there is here and yeah I don't see how I could guide you any more firmly than that are you finding things so easy here you don't need China well that we're through yeah thank I'm thinking some thank you all for attending the daily journal shareholder meeting this year we welcome you all back for next year good thank you yeah we are yes yeah I have to leave you yes you can have what you want you

他的原话——出自本场谈话

“幸福生活的第一条法则就是降低期望。如果你抱有不切实际的期望，你这一辈子都会痛苦。你要有合理的期望，并以一定的坚忍，坦然接受生活带来的结果，无论好坏。”

Daily Journal annual meeting, 2019 · 2019

“如果你只想从查理·芒格这里带走一句话,那就是这句:陈词滥调往往是对的。所有那些古老的美德,样样都管用。”

Daily Journal Corporation annual meeting (2019) · 2019

“静静地坐着，竟然是如此明智的一件事，这真是了不起。很多人都太爱折腾了。”

Daily Journal Corporation annual meeting (2019) · 2019

“在我看来，真正受过良好教育，是指教授错的时候你能是对的。谁都能把教授讲的话原样复述出来。诀窍在于：知道他什么时候对，什么时候错。”

Daily Journal Corporation annual meeting (2019) · 2019

“现代生活造就了成功的官僚机构,而成功的官僚机构又孕育出失败与愚蠢。怎么可能不是这样呢?这就是现代生活的巨大张力。”

Daily Journal Corporation annual meeting (2019) · 2019

他称之为“现代生活的巨大悲剧”。

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