每日期刊 · 2020

2020年每日期刊年度股东会

2020年2月12日 2小时视频

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2020年2月的这场股东会,是芒格在疫情来袭前主持的最后一场——它如同一枚珍贵的时间胶囊,记录下他在一场自己未曾预见、也从不声称预见到的崩盘前夕的思考。当时他96岁,照例主持了整整两个小时,思维敏锐,不慌不忙。

为何值得一看。贯穿全场的主线是:理性是一种练就的本领,而非天生的性情。芒格主张,能够意识到自己错了是“天赐之福”;他坦言自己有相当一部分财富,来自于平掉那些因错误理由建立的仓位;并讲述自己如何在反证出现时主动摒弃旧有信念。这是他谈论“改变想法”这门手艺时讲得最清楚的一次。至于加密货币和各种金融科技狂热,他以最具芒格特色的方式不屑一顾——直接扔进“太难一堆”,连想都不值得想。

值得关注的话题:“太难一堆”这门纪律;理性以及依据证据更新看法;中国与某些特许经营护城河的持久性;以及他天性中对一切散发着“轻松钱”气味之物的警惕。

Tesla inflation China rationality

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people the meeting should now come to order I'll give you some time to sit down welcome to the Catholic cathedral this is the most amazing place oh you haven't ever seen it should go look at it from the inside it looks like hell from outside but inside it's a startlingly good architectural work and you it's quite interesting our director Peter Kaufman is on the committee the runs in Cathedral and if you want to be buried in the same column of the ashes of Gregory Peck he'll arrange it for $100,000 we have a very commercial crowd you can't even die without pain okay I have a script I'm going to go through and after we're through this script let's take care of the formal business of the meeting will answer questions in the usual way after one brief little explanation from the chairman I want to first introduce the people who are here I'm Charlie Munger chairman and the other others are Rick garran vice chairman wave Rick Jeri Salzman who really runs the place Peter Kaufman how many of you know I can't read very well but that's a problem of age Gary Wilson Wilcox and Mary Conlan our new director Michelle Stevens vice-president of the daily journal wave Michelle was the one that ran the public the foreclosure notice business who made all the money she is a hero and around here go to this is our main financial accountant Mary Jo Rodriguez who's a pillar of the place and odenie mani Domini I have a vice-president of the journal Technologies Ellen Ireland has been here forever and as a mother pillar of the place Ernest Miranda Andy Richardson Martin cassis and guat Milner and these are our accountants and having fired two previous that comes we really love these counting by the way it's really difficult about what's not an easy profession particularly a place like this and I have the feeling that whoever imagine whoever is auditing Boeing this year is earning his money that's how hard that would be to do I will now proceed to the formal business of the meeting and then go on to the questions if anybody has the proxy haven't delivered ignore it because we've got enough proxies anyway Ellen will you please respond report the number of shares presented at the meeting on December 20th 2019 the record date fixed by the Board of Directors for determining the shareholders entitled to vote today there were 1 million 380,000 746 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 a Quinnie titre company I also have an affidavit certifying the completion of the mailing of the notice of this meeting the proxy card and the 2019 annual report along with a prepaid postage return envelope to the shareholders the total number of shares represented in person or by proxy at this meeting is 1 million one hundred ninety eight thousand nine hundred eleven which is more than a majority of voting power of all outstanding common shock the stock of the corporation and the meeting may proceed I will attach the affidavits to the meet meeting minutes and have a copy of the minutes of the last Annual Meeting thank you we will now proceed to the individual items the first order of business is the election of the Board of Directors we have enough proxies to elect goli directors when we've named I hereby declare them all elected the number of shares voting in favor of the directors is rather interesting I do not leave the list and the single most useful person in the places Salzmann has the lowest number of votes but I haven't I'm fighting to do as well as he does anyway that we all we all got practically the same number of votes it's rather interesting with some previous occasion Price Waterhouse had fired somebody and so somebody came to the meeting and a long diatribe against Price Waterhouse our auditor very humorous annual meetings are very peculiar in America and of course we now have the chief shelter directly every big company in America is some index huh and it's weird that the voting power of America goes to much index fund operators nobody planned it just happened and God knows what the consequences will be alright the second - Rosel is the ratification of the selection the end of and public accountants and again behalf proxies for that and that is just passed the all the committee of the of the Board of Directors have selected Scott Milner be the accountants and we need a ratification of that and again we have my proxies in that passes a third proposal is to approve the amendment to the companies Articles of Incorporation to adopt a majority vote standard for election of the directors the state of California asked us to pass this and so we're passing it and that is just passed a reason though you so all the proxies there requires I don't need to go into exact numbers as years the fourth proposal that proposed was approved the one that the California Assessor passed that's passing all over America god knows what it does not much I think fourth proposed proposal concerns the Advisory vote what Jerry salaries I know it's yeah and that also passes there ever is anybody who earns is pay around here it's Jerry the approval requires of all or that stone and I'm coming to an adjournment oh yes we now needed a motion to adjourn the meeting and go on to the questioning there a second on favor we are adjourned I will discuss briefly the state of affairs that's reflected in our reports and then I will take questions the this company of course started as a public notice rag which made money by Pope doing public notices and morphed into a very successful legal daily newspaper which had a monopoly I'm publishing the opinions of all the appellate courts in California and every law firm had to buy it and there's a lot of other useful things and was a small but very profitable paper occupying an ideal niche many of the newspapers in America had similar niches where they just made regular or substantial profits a very easy simple business run of course what's happened is that technological change is destroying the daily newspapers in America including the little ones like cars the revenue goes away and the expenses remain and the there they're all dying Berkshire Hathaway owns what about a hundred of them and the matter is they're all gonna die and there's nothing that can be done with good management to save them and it's a sad thing because those newspapers were an accidental part of the government they called them before the state and each one had come into being sort of by accident of capitalism without any planning but founding fathers and the people who ran them became very powerful people due to great American institutions one is nepotism and the other is monopolies and all those nepotistic monopolist many of whom drank too much actually morphed into a function where they were more useful than our legislators and of course we're losing them all and what we get is these opinion services on TV that everybody watches where everybody believes some ridiculous version of things that's led us as much as anybody good and it's it's not a good thing in America that we lose newsweek type magazine and all of our daily newspapers and get back Rush Limbaugh and his ilk on the other side and that's what's happened and it's a sad thing nobody planned that we had a Fourth Estate that was really a branch of the government that worked very well for us and that took pride in being accurate and so on and nobody plans it would go away it just happened now daily journal corporation strangely is not going to disappear all of our business fails we still have a lot of marketable securities so we're going to do better than these other newspapers I'm not counting the ones like there it was regional in the New York Times or a few that will survive no matter what but basically they're all going away and the daily journal is not going to go away and leave the shareholders with nothing because of our big barnable securities we also have a second business which we're trying to use to replace the economic strength of the newspaper that is imperiled and that's journal technologies and that is a computer software business that helps courts and government agencies replace human error-prone inefficient procedures with simpler and better procedures run by software that is a very difficult business ordinary software like the software teacher uses to help teach a class or the software that's used counting if your dealer and Chevrolet's or something that stuff is a gold mine because it's just standard and you crank it out and everybody uses it sufficient what we're doing is servicing all these government departments of a lot of different kinds and they all have special requirements and they're almost all quite bureaucratic and they're also political and it takes forever they're full of lawyers and consultants the RFP process so it's a branch of the software business is intrinsically very difficult where everything takes forever it's very hard to do and so on and a lot of people just totally avoided for that reason you just want to crank out a few bits of software and we're just everything on the cloud whatever they do and count the money and of course we're in a business where you need our reason people to help all these courts all over the world automate probation officer work or court filings and so on it's all going to happen so this all this automation and the effective software is going to happen but it's unbelievably difficult an RFP involving a government and a bunch of consultants is intrinsically very difficult and you have to keep good nature you have to have huge patience and you have to have huge talent and you have to just keep rolling with it and then the money comes in very slowly and has more bureaucracy yeah it's very difficult in spite of all those difficulties and the fact that everybody at the very top of this company is very old we've done fairly well and don't ask me why it was kind of a miracle and but a lot was done right just to make it to our present state and it's a big market but it's not gonna be easy and it's not gonna be fast and on the other hand we all like customers I fallen in love with the government of Australia it just such nice people I think it's wonderful let us drag you once automated courts and I don't think it's wonderful they're smart enough to hire us imagine hiring a little daily journal company for the courts of Australia and my guess it's all gonna work for them and for us it's a miracle I figured out them this little company it would be a pretty safe choice I think part of the reason we've been successful is so many of our competitors are so awful so we don't deserve as much credit as we're climbing and but it's gonna take a long time and it's an everlasting struggle it's kind of fun to watch because we have the most unlikely cast of characters and a lot of them are quite successful Jerry just made a big report to the Board of Directors it's just amazing the goodwill with which the people attack this very difficult work and just keep everlastingly out of them they have troubles let it go around or somebody goes crazy they tell them no you know there are many opportunities to do this wrong and but I think it's all going to happen I think we may end up with a big share of it but it's all done you shoulders veto of patience it's really hard this is not the easy part of the software business this is more like trying to create another Pricewaterhouse that would be difficult in and this is difficult and of course we can't guarantee that we will succeed but I consider it like but I think it'll be he's slow and awful I don't anticipate any really easy times for a long time but I suspect it'll keep growing Jerry why don't you how well do you think we're gonna do in the next two or three years where's Jerry yep I'm blind in my left eye so look we certainly devoted a lot of energy and resources to journal technology we have approximately 250 employees in journal technology and we have offices here in Los Angeles obviously in Corona because we acquired a company in 2013 with an office in Corona California we have an office in Logan Utah where we acquired a company there in 2013 and we have an office in Denver because our original interest in this system of serving courts started because our of our interest in providing ever seen that the court of Los Angeles - the largest in the United States at least has sufficient resources in a service provider that's how we got involved in 1999 and we are seeing lots of changes you take for example in Los Angeles Los Angeles now uses our system to do electronic filing attorneys to the filing electronically if you go down to the courts in Los Angeles where people used to have to stand in line or have a service provider stand in line on behalf of the lawyer there's nobody there also in conjunction with LA we were able to enable lawyers to determine when they would come to court and see the judge so attorneys are now setting their own schedule and then it reduces some of the personnel requirements at the court these are some of the innovations that are taking place and if for example you get a traffic ticket in Riverside you're using our system to pay for them so die fast through Riverside and we make some good inroads into other California courts we have we have one basic system and we have three four or five different configurations of the system one for courts one for public defenders one for district attorneys and one for probation officers so we have to only modify one system and make sure the configuration of other of the main system is appropriate for other agencies this is a big advantage when we come to the point of doing installations and Charlie mentioned the people in are the projects in Australia the government of Australia we now have four or five six or seven people down in Australia and we've worked for the state of South Australia and Victoria at the present time which is Melbourne so we have we have most of the courts we have all the courts in those two states and they range from mineral courts to other types of courts that we sometimes don't see here Los Angeles in California in each County only has one court if you went to other states you'd find that there was a probate court a civil court a family law court just goes on and on and on and in California they're much more efficient than you can imagine when it comes to by comparison where they have all the administrators four or five administrators and separate systems and separate IT departments very inefficient that's what we are confronted with all the time as we move forward the financial results will depend upon the number abusers in these various justice agencies yes we do get implementation fees but we can only take that in to income but everything is delivered and so we focus of trying to get to the point where everything is delivered then we can take it in to income and reflected in the financial statements this is a very important thing we have no simple way of just counting up ours and sending little invoices to the government that's what most consultants like to do is build ours and we don't get the right to collect money until the thing works and we do that on purpose it reminds me of one of my favorite tales which really happened when I was young a lot of the earthmoving was not done with bulldozers it was done by teams of mules who were guided by contractors who ran these mill teams and their big plows that they and it was a Latino contractor who had an enormous number of mules and when the war came the big builder called Emma and said I've got a cost-plus contract with the government I'm gonna make you costs plus I want your rules start tomorrow morning on this big project bus plus us percentage it cost this Latino said oh no he said I can't do that because why not he said well he said I'd get business all these years because I'm so efficient and he said when I take a cost-plus contract even my mule seemed to know what they all go to hell and that's the daily journals policy we're trying to avoid deteriorating by thank you miss awful contracting of course man and we're trying to be good like that Latino contractor and my guess is this is gonna work whether you have to be very cheerful to take it because it's agony I can't tell you how the people like Microsoft and Google and soy they don't want our branch of the software business I kind of like it Peter kind of likes it because he senses that Peter Kaufman raise your hand Peter likes it difficult if he thinks he will keep it forever once he gets it and that's our system but I certainly can't guarantee it's gonna work it's a lot of a lot of very difficult work and I would like to tell you who we're just ask deepen talent and we have four qualified people for every job we're just the opposite we're like a bunch of one-armed paper hanger where you go way the stuff and so far it's working and of course what's happened in America of course is that software has grown enormous ly you take every big college in the engineering department the most popular course is computer science and if you are do venture capital the most popular investment is some kind of software and I do not find venture capitalist backing of software companies pretty because there's just so much of it and there's some wretched excess in following in high prices and so on it's not a scene that the tracks are normal where's your Hathaway type I'm not saying it won't work for a great man yet very well but there's also gonna be a lot of casualties it's and I don't like it when bad stuff comes you I don't like it investment bankers talk about evanov which I translate is earnings and I don't like all those talk about J curves and all these private sales of software companies someone bet your capital to another and Mark opposites it looks like a daisy-chain to me so I think there's a lot of wretched excess but it reflects an underlying sound development which is this huge growth software changing the technology of the world but it's going to have some unpleasant consequences because there's so much wretched excess Emma and I bet I know what I'm this room almost everybody has somebody in software in the family I got two people in private equity in my family and private equity has grown to than to the trillions and of course it's a very peculiar development because there's a lot of promotion a lot of crazy buying it's what I call fee driven buying much of it where people are buying things to get the fees I'm not used to I buy things because I don't work for me for a long pole as the owner I'm not thinking about scraping fees off along the way this is a very different very it makes me very nervous to have all this fee driven by and whatever this is all just raise the fund that's twice as big as the last one and throw more money at more deals and of course with more money and more overhead it's it's attending the man for fees but will the world provide wonderful results for always people the answer is no it won't it's gonna be a lot of tragedy huh in the past the people who did well in venture capital where the clients of Sequoia which is one of the best venture firms that ever existed in the history of the earth but there aren't that many Sequoia is and Sequoia had such a wonderful record because it kept itself small and now everybody is trying to be enormous ly large and to grow enormously and hire more and more people would like more and more fees and it's it's weird and it's it's not gonna work perfectly and I am trying to give you the same service my old Harvard Law professor gave me when he said tell me what your problem is and I'll try to make it more difficult for you by the way the guy that told me that was do me a favor it's a pretty good way to proceed I have this saying a problem thoroughly understood as have solved it's hard to understand that well and well I guess that's enough for the daily journal you're in for a long difficult ride and not only that the dam leaders look like an old people's home I'm 96 Rick is 90 our CEO is 80 I mean you're not the crapper you don't belong here and I think we will gradually work things out in spite of this agent group of directors after all we got a young man like Wilcox's past retirement age and of course we've got a new director Barry Conlon who are up here partly to make the rest of us look good or bad rather and but it is always odd results in capitalism it is peculiar the one little newspaper is all of Margaretville securities and it's probably not dying and advance was seen in the business none of the people understood not look people have named as a computer software engineer and it's it's weird and yet you people who come from all over the world to this place you're as nutty as we are and if you ask me I think it's slightly more likely it'll work but not work and it's a very good thing to be doing the world needs what we're trying to do and we're trying to reward the right people and really trying to serve the customers when it comes to customers my mably my ambition is to be as close to costco as i can possibly be I've never been associated with a company that works harder than Costco to make sure the customers are served well I mean I just love success that occurs that way and I hate success where you deliberately trying to cheat people or something it's not good for them like gambling service and I'll say yes by the way I'm not trying to irritate our customers in Las Vegas I'm doing it by accident anyway but I do think there's something to be said you have the option for selling stuff that's good for people instead of stuff that tricks them anyways that's our that's our approach and I would choose that approach even I made less money I in fact I think you make more it reminds me of Warren Buffett's favorite saying is you'll always take the high road as it's less crowded and that's the system I think the politics of the country are weirdly awful because of the excesses of hatred that you see everywhere in California with a gerrymandered house the representatives they have the only danger of getting tossed oh I just like sure is if your left us somebody who left you may come in if you're right if somebody the writer you wake up into the primary and this gets too great so awful legislature where the individuals hate each other and they're maybe evil we can sort of sensible Republicans and ten kind of sensible Democrats in the California Legislature and every ten years he's not cases of the right and left get together and throw all the sensible people out back gerrymandering them out because they all agree that if you own their own party that are there the Metalurh are horrible that is a crazy way to be governed and it is not pretty and I have no solution it's just interesting Warren said to me the other day he said it's so interesting now he says I would like to stay around for another thirty years if I couldn't participate if I could just watch and I said I'd sign up for that too it is very interesting it's weird and think about different television is when it when Cronkite is gone and we have all these clowns and the opinion servers lying to us in a very shrewd way and they're really good at it you know the ability to mislead people is greatly underestimated any good admission good magician can make anybody's see all other things happening without happening and not see a lot of things happening that are happening and of course we're all dealing with various people who through practice evolution have been good at misleading us and so it's very hard to be rational and stay sane of course that's part of the reason that some of the companies that I benefit have been successful it's not that we're so smart it's we've stayed sane because a lot of what goes on is absolutely nuts and we all see it in politics of course even so it isn't business sometimes we businessmen try and get it into our share of the stupidity it's and you people come from all over the world to this thing out of some deep hunger I read you as nerds because I was once one of you and I know a nerd when I see one and you come here because some fellow nerd has managed to succeed this might ease defects and you need to similar result and you know something that's really odd you're right if you could learn some of our tricks you'll get more success of life than you deserve that's what's happened to me and how did it happen I tell you how it happened it's obvious that I got better life outcomes then I deserve based on energy or intellect and of course that's an interesting process of everybody would like more of it who doesn't like to get a lot more than one deserves and I stumbled into a few metal tricks early in life and I just use them over and over again I take the high road because it's less crowded of course that's a smart thing to do and then I feel that there's a I was raised by people who thought it was a moral duty me as rational as you could possibly make yourself and that notion which was just inherited basically from my jeans and my surroundings has served me enormous ly well it's like Kipling's if you can keep your head when all around you or losing theirs it's a big advantage and just think of all the dumb things that are or are done by our politicians that are business leaders and the wretched excess you see in the system and I can remember one of the earlier crazy booms that caused one of our earlier recessions all these traders would go to Las Vegas some people have three stacks of chips and stripper ISM that was our securities market I mean it was grossly awful and a lot goes on now that is grossly awful imagine politicians who ever understood Adam Smith it would be like hiring an engineer to design your airplane he didn't believe in gravity well I laughed too but they're tears in my laughter and but this business of being determinedly rational does work you usually keep everybody at it because it's harder to say just saying then there's all credible of course I one of the things that's wrong with the present system is the way the heads get cabbage DUP by the activity and the owners of the heads don't know what's happening one of my favorite actors from I was young mr. Cedric Hardwicke was such a good British actor he was knighted by his monarch Sir Cedric Hardwicke heart we got old of course he kept acting right and toward the end of his life he made one of the great statements in the history of acting he said I have been a great actor for so long that I no longer know what I truly think on any subject you stop to think about it that's exactly what's happened to most of our politicians except they don't know it's just every heart rate at least knew is brain a bit nerdy cabbage where's our politicians they like cabbage anyway and so yeah and of course the young people want to shout out their resentment of this that you know I always say what they're doing is pound get in nobody's listening to the money shout out they're just pounding a lot of nonsense in it's a big mistake to pretend that practically anything because you become what you pretend to be now sometimes that works I knew a couple of no-goodniks in my youth who became leading philanthropists and they did it just to mislead people but after they don't for a while they became religious philanthropist and that always gave me the gig hypocracy really is better than most people think it does change you that constantly pretend one thing is another and of course it changes you to say something repeatedly I always felt that Ronald Reagan was shifted from Democrat to Republican Oh his acting career filled and he was hired by General Electric tour around I give right wing speeches of course he became a real good and but no world where that's the way your own mind tricks you of course if you have some prophylactic measures where you're more cautious about your views thank you how we all love to have a bunch of children and we're a little more cautious about their views I've got some children in the audience they're fine large a pretty good bunch but if I had my druthers there's a thing or two I would change and a good laugh but that's the way life works well I have to know who ruminations of one imagine coming to listen to some 96 year old man amazing I'll take questions now from anybody go ahead we probably have to wait for a microphone they have my Gribble in Syria hello oh okay good morning everyone mr. Munger Bill Brewster here thanks for doing this in the past you've referred to value investors as a group of cod fishermen and suggested that they may be fish in a different pond conversely you've also discussed how over a long enough time frame and investors realized return would mirror the businesses return so given that many of the highest-quality businesses are in the u.s. wouldn't some of our time be best focused analyzing the quality of the businesses here in the US and I understand that the odds offered on the bet matters a lot so I'd be curious to hear in your mind how you weigh the quality of the horse versus the odds offered on the horse thank you well both are important but basically all investment is value investment in the sense that you're always trying to get better prospects that you're paying for and so but you can't look everywhere at once any more than you could run a marathon than 12 to earn states at once and so you have to have some system of picking someplace to look which is your hunting ground but you're looking for a value in every case and what is interesting to me is you talk about the yes I don't agree with you I think the strongest companies are not in America I think the Chinese companies are stronger than ours and they're growing faster I have investments in them and you don't and I'm right you're wrong well you can laugh but I just spoke a simple truth it was here I saw his face in the audience he's the most successful investor in the whole damn room where does he invest China and boy was he smart to do that and is he good at it oh that it really helps if you know which hunting ground to look in fact well we all do better hunting him when we hunting where the hunting is easy I have a friend as a fisherman he says I have a simple rule for success in fishing fish where the fish are that's you want to fish where the bargains are that simple the fishing is really lousy where you are used well we look for another place to fish somebody else dear mr. Munger my name is Vishal Patel I'm a portfolio manager from Toronto Canada working for dynamic funds it's my third year here and I love coming back each year I want to thank you for your time over the years you've shared lots of comments about India and China I would love to hear any and all insights you have about your friendly neighbors to the north whether it's our Canadian political system banking system housing sector resources industry health care system any and all insights wisdom on Canada would be much appreciated I'm very partial to Canada and I think there's always medicine system work it's I think they're wise to have it and I think they're wise to pay their pharmaceutical prices instead of ours and I think it's wonderful that we've gotten along with Canada so well all these years and I think you should be quite pleased with Canada I don't think it helped you to have two different like we just spoken that was an unfortunate accident but I basically like basically like Canada and I think in some ways you do better than we do good morning miss Jerry points out that we have customers in Canada he's encouraging me yes go ahead good morning mr. Munger RJ Manuel II and I'm a attorney just like yourself following in your footsteps I had a question regarding investing with computers and artificial intelligence rapidly getting better at investing than humans what should analysts and portfolio managers and the investment management industry do to remain competitive thank you well that's a very good question I think what people in the investment management industry ought to do is prepare for tougher times ahead I think this indexing thing is gonna run and run and run and I think that the their wretched excesses in a lot of well-paid hedge funds and private equity businesses that will in due time result in a lot of troubles that give pain Oh everywhere I see the endowment managers have the same mantra they want fewer and better investment managers that's not going to be good for investment managers and the rest of the people are indexing now do you want any other cherry news the cherry news is that if you think the way we nerds think and keep at it long enough you'll do all right but if you if you go with this crowd I think there's pain ahead a Charlie on your left my name is Jonathan bird and I'm from Phoenix in the past you've recommended index funds from people seeking wealth accumulation and in the past Warren Buffett has recommended using this sell-off strategy for income as opposed to chasing dividends if we synthesize those ideas it seems like the best course of action for investing over a lifetime is to use index funds for accumulation and the sell-off strategy for income in retirement would you agree with that and if so what benefits do you see in using that strategy thank you well I think the reason it's growing is that for most people it does work better and on the other hand there's a huge proclivity to gamble it's very interesting to play in a game where the returns are variable and so there's a huge lure that comes to gambling in China the ordinary holding period or the individual investor is short they love to gamble in stocks this is really stupid it's hardly a match I do imagine anything dumber than the way the Chinese or the old stocks and they're so good at everything else it shows how hard it is to be rational but I don't think investment management is going to I think there are lots of troubles coming it's too much wretched excess Charlie my name is Bart Chaudhary I'm an investor from India once again when I thank you so much for the time that you spend with us and give us so much of your time I had a question regarding the Stoics it's something I've read after you've started you actually mentioned it there is a great anybody who's read your life you're a testament to the idea that to not be a victim but to be a survivor and it's an attitude that has helped me in my short life so far could you perhaps expand on that idea how it's helped you and how that is perhaps one of the greatest ways to live your life out regardless of what happens to your course some people are victimized by other people and if it weren't for the indignation that causes we wouldn't have reforms that we need but that truth is mixed with another it's very counterproductive for an individual to feel like a victim even if he is best attitude is just to be cheerful about everything and keep plugging along and therefore I don't like politicians to get ahead by trying to make everybody else feel like a victim and they make my flesh crawl and I just don't believe it of course wants to be a victim instead of a survivor of course we want and but feeling like a victim you can recognize your position as bad and try and improve it that's okay but to have a deep feeling of it wouldn't it's all somebody else's fault is a very counterproductive way to think oh people don't even like being around it's really stupid and yet our politicians build on it and friend make their careers work by doing something that's very bad for all the people are talking to and they think they're doing the world's work you know it's crazy it's absolutely crazy I'm mr. Munger it's a privilege to be here with you my name is Paul Smith from Boulder Colorado Daily Journal and Berkshire around a lot of the very large banks I suspect many people in this room do I know I do it's kind of tailgating you and mr. Buffett my question is concerning some of the thin Technica FinTech technologies coming up your position on crypto is very clear but some of the other FinTech technologies my question is do you see them as being a threat to the long-term profitability of those large banks well I don't know much about crypto technologies except to avoid them so and by the way I have a lot of things at work I call the too hard pile and if your here's my too hard pile I throw you into my to heart I don't think about them now every once in a while like take something on or drift into something really difficult and then I continue doing it just because and perverse the daily journal was basically a ridiculous Enterprise it's really difficult and I'm an enormous ly rich and I'm 96 years old you know I care terribly how it works out a little insane I don't wanna hurt you why would you come here I'm talking to a nutcase like me but no I hate things like Bitcoin I mean I hate things that are intrinsically antisocial of course we need real currencies and one of the interesting things about the current condition is that the Americans have created the reserve by accident have created the reserve currency of the world and the world needs a reserve currency and I don't sense any great sense of Trustee ship among my fellow Americans for behaving very well in our responsibilities to the rest of the world with our own currency all right we'll do what pleases us that's not my view I think once you get a big responsibility to other people anything on you all think about them too mr. Munger we have record budget deficits record unemployment and record expansion of the balance sheet why do you think we don't have inflation and secondly could you recommend some good books you've read the last year well you know the economists of the world thought they knew a lot more than they did what has happened is weird but in response to the Great Recession all the nations of the world are printed money like crazy and have bought all kinds of investment assets and they've done things that nobody in the economics profession would have recommended on this scale even favor so years ago and yet the inflation has been very low I think we all have a lot to be modest about when we talk about economics Lyndon Johnson said that giving a talk on economics as well I'm pissing down your leg he says the feets feels hot to you but it doesn't influence anybody else very much and I'm afraid I can't do much better than the London Johnson cooks Oh I people send me books more than I can read and I've gotten so I skim a lot of them very rapidly and I'm not sure I'm the right one anymore to do books are so important to me all my life but I find that my mom I used to read fewer books and read them better than I do now because I don't see very well so maybe you should talk to some younger man about your books hi Johnny my name is young Lee I'm an investor from New York thank you so much for this great platform to learn from you and sharing your wisdom my question is about your outlook for global market and economy especially given the slowdown in global economy driven by Chinese economy and also the rising geopolitical risk so what's your take a market and economy going forward thank you well I am mildly optimistic about China for a variety of reasons nobody has ever taken a big nation they had as fast as China has come ahead and I think they've done a lot right so I'm I'm a big admirer of what's happened there if you stop to think about it they were in am L to Z entrap and they prevented 500,000 babies are being born they did it by methods that we wouldn't like in the United States but I think they were doing the world a favor and I think that what they did was admirable so basically I don't have this hostility toward China I really admire what the Chinese people have achieved and I think considering that they started as communists their leaders are pretty good and it's amazing imagine a communist country creating this enormous period of growth and prosperity and lifting 800 million people out of poverty and oh I like what's happening in China and I think the united states all they get along with China and China ought to get along in the United States and regarding the global situation it's so peculiar they have negative interest rates another thing I greatly admire is and this will strike you as very peculiar there's one modern nation which has had like 25 years of stasis how can anybody admire 25 years of stasis I think the Japanese have handled 25 years of stasis with magnificent skill and philosophy pan is not going to hell they don't like 25 years of stasis but they take it like men and they aren't bitching and wailing and they don't act like victims and so I really admire the way the Japanese have handled their adversity and I don't think the adversity came from a lot of mistakes I think the adversity to Japan they were an export powerhouse and up came China and Korea of course they had some troubles we'd all have troubles we had way tougher competition and so I think that's my I don't know I don't think Japan's stasis was Japan's fault I think it just happened and I think they bear up and magnificently well in order to be greatly admired and of course they got into this defect three manufacturing ethos in a big way and led the world in it so I think the United States there's a lot to learn from Asians thinking house everything's clean in Japan you know see the homo sleeping I'm a defecating in the street either oh I guess a lot to be said for a Japan Carly thank you very much for having us here today and sharing your wisdom and your beliefs I was hoping that you might share with us some examples of how you've used disconfirming evidence to change some of your important to terminate determinedly held beliefs well of course being able to recognize when you're wrong is a godsend if you take good bit of the Munger fortune came from liquidating things we originally purchased because we were wrong of course you have to learn to change your mind when you're wrong and I actually work at trying to discard beliefs and most people strand cherish whatever idiotic motion they already have because they think it's it's their notion that must be good and I think of course you want to be reality what you previously thought particularly when disconfirming evidence comes through and there's hardly anything more important than being rational and objective just think of all the dumb things you can do in life think of the brilliant people who are just utterly brilliant who do some of the dumbest things you want any trouble thinking of examples active you most of us can know what we are on accident last year - and we can all pull up an example or - it's hard to be rational good morning mr. Munger thank you so much for teaching us I also want to thank mr. Kauffman here comes my question I recently watched a documentary that introduced the economic masters Keynes and Hayek I would like to know your comments on both of them and which economic theory you would prefer and to take a step further if applied to personal goal setting which model would you advise us to follow between planning and flexibility thank you very much well Keynes of course was a very interesting man and he probably had more influence on the economics profession anybody maybe excepting Adam Smith and of course I lived in the great depression and his ideas were exactly right for fixing the Great Depression and what happened was we got out of it finally week because accidental Keynesianism came in courtesy of Adolf Hitler in World War two oh I don't see how you could study economics without Keynes heck is more complicated and I don't think I'm the world's best understander of a peg I've read him and I and the rather admire him but I'm not sure I totally agree with him it's too tough for me therefore I quit clever to you I mr. Munger yeah over this side my name is Glen tongue thank you for this wonderful meeting and especially for serving food this year I want to ask you about Tesla the company has a market capitalization of about a hundred forty billion dollars it traded last week about two hundred billion dollars in stock and traded about five hundred billion dollars in options and the stock moved about 20 percent a day meanwhile mr. musk seems thrilled to stoke this volatility I wanted to know what your thoughts are on this situation and particularly what your thoughts are on mr. Musk's behavior my thoughts are - I would never buy it and I would never sell short have a third comment so the man found nothing Los Angeles for years named Howard Amundsen you once said something that I've taken to my heart never underestimate the man who were estranged himself I think Elon Musk is peculiar any you may overestimate yourself but he may not be wrong hi mr. manga my name is Joe I mean my sister from China I do the venture capital and three things first I really thank you for are you encouraging so many investors around the world and I hope you'll keep up all the well and do this a little longer and it is how to questions first place what do you think of the value investment in next fifty or hundred years and second question is do honey Hawaiian otherwise on the industrial research all the industrial investments thank you well I don't think I've got any wonderful comments to make about industrial investment I do have the feeling that the world may change and two changes though I think are possible yeah I think they may extend five average life duration by fancy tricks and I think they may reduce cancer deaths by fancy mouths well I think weird things may happen they don't intend to make money any of it happens to me I think that what's already happened in technology imagine the whole internet developing whole different things and although sold companies all the daily newspapers dying and total change in manufacturing processes and it's been a lot of change and of course this caused a lot of lost people who own stocks and I do have the feeling that whether it was really important this probably already happened it's gonna happen from this point forward how much better can it be what you have enough to eat meat you like and a few other things you know what is extra money gonna do for you so I yeah i do think that but i generation had the best of all this technical change no we are children stop dying living standards are way up air-conditioning came just there are million good things that have medicine greatly improved they could replace your aching joint women it caused that unique i don't think we're gonna get as much improvement in the future cuz we've got so much already mister mugger on your right earlier in the media you mentioned the benefits of taking the high road treating the customers the right way etc there's a sense which may or may not be true but there is a sense that in china there's more moral flexibility in business less respect for the rule of law and less transparency than there is in the west you share that concern well I'm naturally more comfortable in my own country with its traditions that I haven't do what's evolved out of Chinese communism and of course I but I admire considering where they were mired in this Malthusian poverty and I also mired in some ignorant and that leader who said I don't care if they get his black or white I want to know if it catches mice that was one smart leader and I think that smart leader yesteryear has other leaders now who are smart and I think they're gonna keep improving I even think the Chinese may yet over there crazy Lobo gambling I once talked to a bunch of Chinese leaders I say I got the Feng Shui and I said get over it your superstition good morning charlie hey how are you I'm your right-hand side all right and quick question any cigarette on Jeopardy and how many hours do you work a day how do you stay like so occurring with all the information a lifelong learner oh I don't think I deserve any credit for longevity it just happened I don't have any there's no male in my family that ever lived any such age and it's weird oh I can't help you okay hey Charlie good morning it's Jason leader of Bellaire Texas thanks for your time and also thanks for your perspective you mentioned earlier that some mental tricks have been helpful to you one was taking the high road the other is being perfectly rational what other mental tricks have been helpful to you during your life and also you've mentioned you touched on excesses and you're worried about some excesses whether it's in venture capital private equity political sphere and also I guess in government debt what other excesses do you see in the system right now I think the opioid echo that I don't think the wide use of opioids has helped us either there's always some miserable excess and it's a very complicated subject you remember how the Chinese emperor got rid of opiate addiction when something like one male and eight or something like that in China was an opium addict you didn't have to kill very many people he just had death penalty for users no exceptions no way went is addiction problem I think somebody will may try some of that stuff sooner or later if things get awful enough yeah it may not be either worse way to handle it that cheery note I'll go to the next mr. Munger over here on your left side yeah I'm a father of three young children under the age of fourteen and my question to you is what would you recommend to teach children to teach children on how to prepare them to be successful in life I think the best thing any parent can do is be a good example pitching doesn't work rather damn there are over 10 trillion dollars of securities around the world with a negative yield and by the president's Twitter feed it seems that he wants to bring negative interest rates the United States are you for negative interest rates or against them make me very nervous however I don't think the authorities had much choice it's politically impossible to do big stimulus rapidly and the only weapon they had in a crisis was to print money and change interest rates and I think it was probably the right thing we done of course it makes me nervous I think having worked once people will overdo it and that's the nature of governments and people and of course that makes me nervous I don't know what to do about this hi Charlie I'm in the back of the room on your right I'm Cameron hamidi my question is about the effects of low interest rates on insurance lower returns on float may be causing a tighter supply of insurance for example there used to be three main underwriters insuring all the taxicabs in Southern California now it is heading towards just one underwriter who will have a monopoly on all commercial taxi insurance in Southern California you have access to sea of Geico and Wesco and a Rolodex that we can only dream of so do you see 10 years of low interest rates posing a systemic risk to the supply of insurance I am made uncomfortable with the idea of extremely low interest rates or negative interest rates even more extreme lasting a long time I don't think anybody knows how those work oh if you are a little uneasy welcome to the club I think it's I think it's dangerous and peculiar well I think we had to do what we did other words I don't have any good solution for you I think you're right to be worried about Charlie um it's okay to talk I'm Steve Houseman I've been in the broker business since 1966 I came to your meeting back in the 80s I think we had 25 or 30 people at your at your annual meeting the question I have with the deficits so high with interest rates interest rates in more of a bubble situation and I remember back in the 70s we had the nifty 50 is our technology stocks in the same criteria as it is now as it feels like there's 1015 stocks everybody's investing the value situation has been down for the last four or five years I was also looking at a couple stocks that your own Kraft Foods with your 26% in the company how come is it make sense to you for your company for a purchase or Hathway to buy out Kraft fooled completely and take advantage of the low price but Berkshire Hathaway might do next what price but nifty 50 is an interesting question at the height of the Neff t-50 craziness which was created by the morgan bank of all places in a home towing company was all your 50 times earnings all the sewing great God we are not that crazy yet oh I don't think that I think that a lot of what's happened is not crazy I think these companies are very valuable well they may be thought to high prices but home sewing was sure to fail I don't think our leading tech companies are all sure to fail well I think it's not nearly the current situations not nearly as crazy as well after you've helped you was absolute dementia so hi mr. Mergen Munger my name is Nicholas gonntchev I'm currently pursuing my MBA at USC Marshall many of my classmates are considering careers in private equity and venture capital you yourself mentioned that some of your family are because are having careers in private equity you also mentioned that you see a lot of excess in that sphere what advice they give to your family that is starting careers in private equity and what advice do you give would you give to young people as a whole starting careers in those sectors thank you and I respect their disinterest and but I do think we've got way too much registered access any time you have any new names to sort of mislead people like adjusted a bizarre but think of the basic intellectual dishonesty that comes when you start talking about adjusting epidural it's you're almost announcing you're a flake and yet our respectable people talk that way and charge fees for talking that way it's ridiculous and so I don't like the wretched X don't lay all these transactions where one private equity group sells to another and the guys who really honor they're just sort of raising the fees higher and higher ever owning the same in the intellectual mix it's it's a lot that's financed by its nature but the temptations are too great in it goes to wretched excess of course I don't like it I don't think it's good for the country I would argue that the wretched excess that led to the Great Depression which led to the rise of Hitler I think we pay a big price eventually for wretched excess and stupidity and greed and so forth I'm all versed in control other words for behaving a lot more good morning mr. Munger thank you for having us it's a privilege to be here my name is Alan Chung I'm from San Francisco my friend Tony Huang wanted to be here and asked this question himself but he's currently stuck in China so he's asked me to ask this on his behalf mr. Munger is well known that you're an avid and voracious reader Tony wanted to ask do you ever reread books that you've already read before and if so which books do you reread yeah I do let me give you an example of something I want to reread that I haven't reread yet the other day I was musing over the current situation and popped into my head that I had read a poem about 80 years ago by George Sand and George Sam was a female writer but you know writers to get ahead in those days sometimes use men's names George says and wrote a poem and it was an ode to the goddess of poverty she said hail to the goddess of poverty wonderful goddess of poverty she tells the fields she Minds the Mayans and so on I remember right toward the end the goddess party-party said you trying to banish me you'll live to walk me back I kind of agreed with this poll but I'd like to see it again I don't know how to punch notes on the internet and get George sands poem to me so somebody will send me or Paul mile but very much like it but I'm telling you this because it's an antidote to our politicians who want to tell us they're gonna about while he's all poverty it's a stupid idea you know it's like saying we'll all be riches in a modern civilization or a relative thing its status where we want it we need more beans and the throw of reaching for status is that the bottom 90% are always gonna contain exactly for some of the people no matter how hard we work around much pieces to succeed and we actually need some tough incentives in a civilization to make it work in other words George Sand was right the goddess of poverty is not all bad she's partly good and of course I like thoughts that I have that are different from everybody else and I think that a billionaire who talks about the glories of the goddess of poverty is making a contribution but only a bunch of nerds like you will appreciate it mr. Munger yeah I'm here in the back thank you once again for taking our questions today really appreciate it just wanted to ask you a quick question about the fact that you are an early proponent of electric vehicles specifically your investment in BYD I wonder if from your perspective today other technologies like hydrogen fuel cells or others that may come to mind are equally important in terms of their emerging capabilities and what sort of impact they may have well I think electric vehicles will be more popular than high hydrogen fuel cells getting the sun's energy transferred into electricity under the vehicles it's basically a good idea for the long pole and I think all the technology is going to work and so it's actually improving we may get a lithium battery that's actually quite safe and more energetic suppose we have now and I think I think that's although the good act here in California when I came to California Petroleum Club we had wildcatters we had a little bit go in there's a little like Texas I think we found any new oil to speak of and by California decades I think it's dangerous to rely on hydrocarbons for energy of course we've got to take more about directly from the Sun I think that Texas will eventually get to be like California mr. Bundy good morning I'm Sergio from Dominican Republic and my question is do you think is necessary for America to recover a positive trade balance to keep its prosperity in the next century the answer is No dear charlie my name is Liang Hong my visit discharged today from Tokyo Japan where I work for one of your investees to borrow words from another blind philosopher John Milton Berkshire Costco and Daily Journal please be long choosing and beginning late this question is for my five children who may be watching later how do you not your kids and grandkids to hold on to their shares for as long as possible for you my children seem to do pretty much what they please and I find I'm happier if I just do the best I can by my children and take the results as they fall I wouldn't sweat too much about how do children hold the stock you know good morning mr. Munger I'm a student at USC and I just had a quick question um you know I'm eighteen right now I'm in college and sometimes I lose interest in what I do and you're 96 and you're so passionate about what you do so what keeps you going like what is your how do you still have the motivation thank you well maybe I've been lucky I like what I do I have wonderful partners and friends I have a nice family my problems are interesting to me I have been a very fortunate man I don't know how to make everybody else lucky I could have had a different hand and then some miserable alcohol like throwing up and they got her it's I don't think I deserve any great credit for having stumbled into a reasonable amount of felicity I do think that trying to be rational helped that's the only thing you got if you're a fellow nerd there's no point in your you're not gonna be a sex object you may have to rely on your rationality hey Charlie my name is Brian lacs I'm from Los Angeles there's a lot of talk these days about the climate and the environment and funds divesting fossil fuels and countries trying to figure out how to generate electricity without polluting the environment could you give us your thoughts on nuclear power I know of Bill Gates has been a pretty vocal supporter of it and I read that Warren used to invest in uranium back in the 50s and you know he more recently helped fund a uranium bank in Central Asia so if you had any comments on that as well thank you well I admire Bill Gates who feels a duty to throw money it's tough it's unpopular elsewhere and that might possibly work oh I think it's an admirable charitable effort by Bill Gates and one for which he's very well-suited I don't know whether we're gonna get safe little Adam Lance or something but I think it's certainly worth thinking about problem with it of course is that how much other there's no wool material do you want a bunch of crazy humans to have I don't know the answer to that question and regarding energy of course we're gonna have to get more directly from the Sun and so forth and it's all the good than everybody's everybody's going into that in a big way I miss monger away I would be in favor there were no global warming problem I'd be in favor of substituting getting power directly from the Sun for fossil fuels starting today even if we didn't have a goal warring brother I think it's a good idea to conserve hydrocarbons and use more solar energy that is by the way not the normal attitude of other people but I'm right and they're all wrong I'm assuming err on the left my name is Ray and currently a student is a OE so my question is on universal basic income so it is a government or public program for a periodic payment delivered to everyone without any work requirement so I'm just curious about your opinion playing like this thank you well enough but you'd totally ruin everything a little of it we can afford what the exact makes is will be determining through the political process forever hello mr. Munger my name is Chris Antonio I'm from Marin County and my question is you talked frequently about having the moral imperative to be rational and yet as humans we're constantly carrying this evolutionary baggage which gets in the way of us thinking rationally are there any tools or behaviors you embrace to facilitate your rational thinking the answer is of course I hardly do anything else and one of my favorite tricks is the inversion process and give an example when I was a meteorologist in World War two they told me how to draw weather maps and predict the weather actually doing is clearing pilots to take flights and he just reversed the problem I inverted I said suppose I wanted to kill a lot of pilots what would be the easy way to do it and I concluded the only easy way to do it to get the planes into icing the planes couldn't handle or to get the pilot into a place where he'd run off fuel before he could safely land so I made up my mind I was gonna stay miles away from killing pilots for by either icing or getting them on the sucked in conditions when they couldn't land I think that helped me be a better meteorologist in the world war two I just reversed the problem and if somebody hired me to fix India I would immediately say what could I do if I really wanted to hurt India I figure out all the things that would most easily hurt India and then I figure out how to avoid him now you'd say it's the same thing it's just in Reverse that works better too frequently to invert the problem if you're a meteorologist it really helps if you really know how to avoid something which is the only thing that's going to kill your pilot's and if you can help nd a best if you understand what will really hurt nd of the easiest and worse I'll show it works the same way every grade algebra asked inverts all the time because the problems are solved easier young beings should do the same thing in the ordinary walks of life it's constantly emerged you don't think what you want you think when you want to avoid or in your thinking what you want to avoid you also think about what you want and you just go back and forth all the time Peter Coughlin who's here today he likes the idea that you want to know how the world looks from the top looking down and you want to know what it looks like the bottom looking up and you don't have both points of view your reality recognition is lousy Peters right and in the version is the same thing just such a simple trick to think how does this look from the people above me how does it look from the view but evening how can I hurt these people I'm trying to help all these things help you think it through and there's such simple tricks there like the lever they really help and yet are great educational systems advanced degrees they don't teach me beliefs how simple tricks they're wrong they're just plain wrong hello mr. Munder hungry right my Clara Shaggy I have a question about you know if you were researching a new company that you've never heard of how would you approach the research process how much time would you spend if you perform to the intrinsic value estimate and the company was expensive would you still continue following the company closely and researching it or do you kind of try to get to evaluation pretty quickly and if it's if it's not cheap kind of move on how do you balance the time you spend on companies well of course it's complicated technical technologically I tend to leave it to others I'm an a an occasional variation on that but basically I just don't do it I want to think about things where I haven't advantage over other people I don't want to play a game where the other people have an advantage over me so if you have a pharmaceutical company and you're trying to guess what new drug is gonna be invented I've got no advantage other people were better than that than I am I don't play in a game where the other people are wise and I'm stupid I look for a place where I'm wise and they're stupid and believe me it works better there's you know it's God bless our stupid competitors they make us rich yeah that's that's my philosophy in it and I and I think you have to know the edge of your own competency you have to kind of know what this is too tough for me I'll never figure this out I'm very good knowing when I can't handle Ignazio jarate San Francisco Bay Area my question is about electric vehicles and BYD why are electric vehicles sales at bi BYD down 50 to 70% while tesla is growing 50% and what's the future holds for BYD well I'm not sure I'm the world's expert on the future of electric create except I think they're coming generally and somebody is going to make them new IDs B sales went down because the Chinese reduced the incentives they were giving to buyers of electric cars and s Lowe's sales went up because you know honest convince people he can cure cancer hey Charlie on your left side it's always a joy being in this room and thank you for creating his community for us to do so one of the more surprising opinions I've heard this year is that we never really had journalistic ethics that the news has always been colored yellow with the voice of their proprietors with nine decades of observation under your belt does that ring true or does the recent business model shift from subscriptions towards the networked news and Time magazine and Newsweek and the monopoly newspapers I think those people were pretty good in this current bunch are deliberately lying because uh it sells better oh I like the I like the old products of nepotism I'm not monopoly it were better for us than these new guys these guys are so good at marshaling hatreds you know politics was once called by some famous of these politician the art of marshaling hatreds we now have a news outlets that we all follow and they're good at marshalling hatreds well some hatred may have some constructive use but they're overdoing it hatred is too intense in scavenging up the minds pretty cabbage DUP the minds of the broadcasters and now it's gavin geing of ugly people who watch first of all thank you so much Shirley for your time of a big fan my name is Rima and I'm a nerd from San Francisco Mayan herd friend RF and I have a question for you related to technology there's this common sentiment that technology is both accelerating the pace of change and its impact as broadening across most industries usurping traditional moats so given your long career I'm wondering do you think the traditional emoti industries are being undermined at a pace that's different from what's been happy in the past yeah I think the moats of have been breached time after time after time imagine the Eastman Chemical Company going broke imagine all these great department store being on the edge of extinction imagine all those monopoly newspapers going down you know look at the strength of the American auto industry now compared to what it was say in 1950 well I think the moats are disappearing rapidly I mean the old classical moats I think that's probably a natural part of modern economic system how's it all boats stopped working yes let me know what your problem is and I'll try and make it more difficult for you mr. mayor my name is anneka tan I'm a current undergraduate student at UCLA um similar to the question before on what advice you would give to young individuals with a passion for Business and Finance what would you say is the best possible way for someone to expose themselves and expand their understanding of working in the business world which without actually currently being involved in it and how can I maximize my potential value to a corporation in the future by what I do right now well that's a good question there's so many of you now who want to be rich by going into finance and of course that multitude is not going to all get rich and of course 99 percent will be in the bottom 99 percent that's just the way it's going to work I look at the people in my generation were the Nerds who were patient and rational eventually did well who lived within their incomin and worked at being sensible and when they saw an opportunity grab it very fiercely and so forth and I think that'll work for the new nerds of the world and the people who get ahead because they're star salesman or charismatic personalities I'm not one of those so I don't know how to do that so if you're not a nerd I can't help you and I think that the odds are that most people who try to do finance are not gonna succeed and there's a lot of rich @xs units because easy money will always attract wretched excess it's just the nature it's like a bunch of animals feeding on like carcass in Africa by the way that's Maj Joe's on purpose and but no snow so I don't think it's so pretty and I don't think that modern finance is so wonderful and in my day a lot of the finance field were more like engineers they were so chastened by the Great Depression and all the wretched failure that they really tried to make everything super safe and it was a very different plotting place and just tried if you weren't trying to get rich they're trying to be safe this modern world is radically different and I'm not sure if I were starting out a new world in your world how well I would do it would be a lot harder than it was to get ahead in the world the way it was when I came up how are you my best advance I think you'll be happier if you reduce your expectations and if you try and satisfy them and by the way I think that's generally a very good idea it sounds silly but it's so obvious you know how many of us are fairly content with pretty moderate success that is worth knowing because that's what most of us are gonna get a Charlie my name's Jordan Kalon I go and I come from Canada I just like to doing your thoughts on the airs in engineering business generally at Boeing and how you've been thinking about that is that's unfolded recently well I don't like to jump on Boeing is a great company that had one of the great success rates great its safety records of the world they lost their way they made some dumb mistakes and I think that's almost the nature of things to when you try and do something very complicated with hundreds of thousands of people occasionally they'll be a slip-up and in most places you have if you actually look at them they have some near misses but link had a near miss a few years ago when the rudders stuff failed and they had a few crashes I was almost Safety Committee a US Air when that happened and nobody could figure it out for months if something in the rudder was not working and it caused three crashes it took them six months or something to figure it out they must've would have an army island police arrived that wasn't a lot know how to ride this one but it's really expensive to make a big safety mistake of course they should be oh boy did I mr. Munger my name is Alex thank you for all the wisdom that you shared with us since you know since you started I had to fold with no question the first is it's been a while since you've had the psychology of human misjudgment as a talk and I was wondering if there are any additions you would have you've seen more recently and the second part is you've mentioned how important being rational is throughout your life can you walk us through aside from the tips and tricks that you have what steps we can take to become more rational well it's a long process I don't think anybody just flashes into it's not like I'm what do you tells you yeah well you got to do is run down to the front of the revival meeting and shout out and you get a wonderful Hereafter yeah rationality is something you get slowly and it has a variable result but it's better than not having it and no I just think that you can just see how awful it is some people get into these Furies of resentment and anger and sure they're right about everything it's hard to know exactly how human civilization ought to be organized in my own life I've often reflected about how well the system has worked and what I concluded was that the social safety net is just come up enormous Lee as the world has gotten more prosperous that was her a desirable thing and that the Republicans who always opposed it were wrong and I've also the Democrats always wanted to push to say you had too far ahead as they did for a while with the welfare program that was also wrong and that by and large what we have is about right and we wouldn't have got it from either party alone either party had been totally in control in a one-party government we wouldn't have had the result that we have which is close to right and I think power does corrupt I think too much power part of the genius of the American system is there's no one person gets too much power they just if either party had all the power I don't think this I don't think American civilization woulda worked as well as it as it has with this ebb and flow and I don't know what the exact right safety net is I don't think it matters that much I think the United States would be about as happy if it had five percent more or five percent less safety net gnarly thank you for the answer that and kind of echo with the line one of my favorite line from your book it's better to be roughly right then precisely wrong with that being said on some teams could you elaborate a little bit on the project Haven how are you exactly or specifically doing to improve health care lower the cost improve quality and access well that's a very interesting object if you take American healthcare in many ways it's the best in the whole world we have more brains in our medical schools and our pharmaceutical companies and the rest of the world has per capita like we may have as much brains as all the rest of the world together on the other hand if you actually went into American medicine hospitals doctors offices or you would find a huge amount of totally counterproductive unnecessary activity that costs a lot those no good or actually does harm and you'd find that some people are not doing that well they don't have the incentives to make money by doing it you don't get a lot of comfort productive medical care Kaiser here in California does not do a lot of unnecessary stupid medical care for a long death to make more money and do all the evil things that other people do other people as the hospitals and doctors get under pressure introduce a lot of waste and folly and some of the pharmaceutical companies behavior is totally outrageous have some basic diabetes drug ins trying to charge someone ten thousand a month or something it's ridiculous and I even go further I think it's evil and I think the system should be changed and I think it will be changed I think there's too much wretched excess in the medical system and the really sad part of it is that people are doing it have no conscious malevolence there are a lot of people who decided to do murders and maimings to make money they think it's good for the patients what they're doing and of course you got an unnecessary back operation on somebody it's a major evil but the guy that's doing it really thinks is good for the patient other words Eastern is Brandon in the cabbage and that's not a good thing I think you have to change the incentives I think there are places in America that are very admirable that don't do a lot of unnecessary stuff in other places that do and I think I think we're gonna have to change the system I think it's it's if you take the government the medical system of Sam war it costs twenty percent of what ours cost it has better statistics that's not opaque it's open we have a whole industry that tries to make the payment things opaque so they can take advantage of people and they think it's free enterprise I think it's stealing hi mr. Munger yeah Jeffrey Malloy from clean Virginia on your far right I've been working in the financial services industry for the past five years and one of the things that has surprised me is how many of my peers in the industry have set out the market over the last five years holding cash in anticipation of a market downturn and you know I would think given that we're in our late 20s and we've accumulated savings and have what's hopefully a multi-decade runway ahead of us the right thing to do would be to start investing now and my question is first you agree with this assessment and if so how would you convince your friends to start investing thank you well it's obvious that deferred gratify errs do better over the long pole then these impulsive children that have to spend on money on Rolex watches some other falling and not that I'm picking Rolex is any worse than that a Phillipe or something but I think everybody should lose adults should save and not be stupid suppose spending money and defer gratification they get more later and all those good things that we were taught you know well by Benjamin Franklin's thrift and so forth and the odd thing about it is that people are kind of worn deferred gratifies or not they've done recent psychological work on that subject then also look if you're an impulsive person that has to be gratified immediately you're probably not going to have a very good life and we can't fix you and but if you have a slight tendency to defer gratification and you can feed that tendency you're on the way to way to prosperity and happiness it's a that demand for immediate gratification is that's the way to ruin may also give you a syphilis this is the last question evidently I have I'm getting they have a saying in father Bill give him the hook my rendering is just giving me the hook I know I'm an accidental guru we didn't sell out to I didn't sell out to have an audience of people coming in and asking me questions about every damn subject in the world it just it just gotta happen by accident when I went along with it cuz I think it did more good than harm and I kind of enjoy it as long as I'm not to do it too often but I feel I would be I feel sorry for people they have edge elating multitudes and I also wouldn't like a normal mobile dude I love these nerds one last question all right go ahead hi mr. Munger my name is Lazar her Z a graduating senior at ha School of Business Berkley I wanted to go back to Singapore and ask you a question involving Lee Kuan Yew particularly his housing policies I'm curious how you think California should address the insane cost of construction new development right now and how you would try to create housing in California that would be affordable across all socio-economic areas to avoid kind of soak the social evils that Lee Kuan Yew has managed to avoid back in Singapore thank you well that's like asking some ordinary cool who's drunk ever he can't come up with something like Albert Einstein you know it's just too much Lee Kuan Yew was the best nation builder that probably ever existed and what he accomplished didn't say I'm working certain what he started with it was a miracle and of course I don't know how to create that everywhere I'm not sure Lee Kuan Yew could have done it if he didn't have a bunch of expelled Chinese there I'm not sure that any other ethnic group would have done I think he had a very it looked like a terrible hand and by the way there's a an interesting story there he needed a army when he first took over and nobody would help him and only one nation in the whole world would help you know that was Israel and he said how can I accept I'm surrounded by Muslims who hate me how can I accept military advice from Israel and he finally figured it out he accepted the help and he told everybody they were Mexicans well that little joke will end leave me meeting pleasure

他的原话——出自本场谈话

“很难想象还有什么比中国人持有股票的方式更蠢的了。他们别的方面都那么在行。这正说明，要做到理性有多难。”

Daily Journal Corporation annual meeting, 2020 · 2020

说的是中国散户的投机性交易——而非中国公司，对后者他在同一天还大加赞赏。

“好赚的钱总会招来不堪入目的过度行为。这是天性使然，就像非洲一群动物扑在腐尸上大快朵颐。”

Daily Journal Corporation annual meeting, 2020 · 2020 · as recalled

措辞略作清理，去掉了一处口语赘词；谈的是现代金融中的种种过度行为。

“那些既耐心又理性的书呆子最终都过得不错——他们量入为出，努力让自己头脑清醒，一旦看到机会就死死抓住。所以，要是你不是个书呆子，我也帮不了你。”

Daily Journal Corporation annual meeting, 2020 · 2020 · as recalled

由一段连续的回答浓缩而来——一字未改。

“能够认识到自己错了,是上天的恩赐。芒格家族的财富,有相当一部分来自清算那些我们当初因判断失误而买进的东西。我其实一直在努力抛弃旧有的观念。”

Daily Journal Corporation annual meeting, 2020 · 2020

“假装成几乎任何样子都是大错,因为你会变成你假装的那个样子。我年轻时认识几个不三不四的家伙,后来都成了著名的慈善家。他们这么做本来只是为了误导别人,可装久了,竟成了真正的慈善家。这件事总让我得出一个结论:虚伪其实比大多数人想象的要好。”

Daily Journal Corporation annual meeting, 2020 · 2020 · as recalled

不同的文字记录对“不三不四的家伙(no-good Nicks)”还是“无赖(no-goodniks)”有出入。

“一个人觉得自己是受害者，是非常适得其反的，哪怕他确实是受害者。打心底里认定这一切都是别人的错，是一种非常适得其反的思维方式。”

Daily Journal Corporation annual meeting, 2020 · 2020

“我不会在别人精明、我犯傻的牌局里下场。我专找那种我精明、他们犯傻的牌局。相信我，这样玩效果好得多。上帝保佑我们那些愚蠢的竞争对手。是他们让我们发了财。”

'Poor Charlie's Almanack'; closing line reaffirmed at the Daily Journal annual meeting, February 2020 · 2020

“倒不是我们多聪明，而是我们守住了理智。因为外面发生的好多事，简直疯得离谱。”

Daily Journal Corporation annual meeting (February 12, 2020) · 2020

他对伯克希尔真正优势的总结。

“他们像男子汉一样扛下来,不抱怨、不哀号,也不把自己当成受害者。”

Daily Journal Corporation annual meeting (February 12, 2020) · 2020 · as recalled

谈日本民族在数十年停滞中所表现出的坚忍。

“我永远不会买它，也永远不会做空它。”

Daily Journal Corporation annual meeting (February 12, 2020) · 2020

谈特斯拉；随后他引用霍华德·阿曼森评价埃隆的话——‘永远别小看一个高估自己的人。’

“这就是我说的‘冲着费用去的购买’，很多都是这样——人们买东西是为了赚那笔费用。”

Daily Journal Corporation annual meeting (February 12, 2020) · 2020

谈私募股权／风险投资行业那套靠收费驱动的文化。

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