So, its a serious problem. It seems to involve a lot of your standard causes of human misjudgment. These actions have given some shareholders more visibility and comfort on their investment. Bitcoin at 50,000 or Teslas fully diluted enterprise value of 1 trillion. Charlie Munger: Well, the business around here that has the most promise is our software business automating the courts. Youve reached the limit of my circle of competence. I dont think Gerry is surprised that the people doing the workMaryjo and Dannyare doing well. I do think that we dont know what these artificially low interest rates are going to do or how the economy is going to work in the future as governments print all this extra money. These are very difficult questions and most people assume that its simple. You are going to be flabbergasted. Always tell the truth and never lie to anybody about anything. Question: Mr. Munger is a champion of Chinese stocks. Without the method of learning, youre like a one-legged man in an ass-kicking contest. Charlie Munger: Thats too hard in general a question for me. The wealth management industry has a crisis on its hands. endobj How did Eugene achieve incredibly low loan losses over the long term while so many other bankers have failed miserably? And, of course, what Im saying is that if I were teaching business I would start the way Harvard Business School did a long time ago. Im Charlie Munger, Chairman, and to my right is Jerry Salzman, CEO. Culture is very important. Gerry, you have a comment on that? Tom Murphy used to say that his system of management was to delegate just short of total abdication. The letter is 1,617 words. To the extent that my thoughts have helped my life, I think Ive pretty well run the course. If you do that all the time; if youre looking for disconfirming evidence and putting yourself on a grill, thats a good way to help remove ignorance. I said it wont matter. You are on record as a zealous fan of the Chinese work ethic and Confucian value system. 3 0 obj So, I think for some folks, early-stage investing is best, and for other folks, what Ive done in my life is best. WebDaily Journal. I think all of this activity is regrettable. And if you stop to think about it, that is also true at the Daily Journal. Can you speak to the causes, the trend, and make some predictions? Charlie Munger: Im sure some are, but, by and large, thats not what Warren is known for. Question: If you had a chance to make an addition or revision to Poor Charlies Almanac, what would that be? So, its a very interesting competitive field. Shareholders I hope that that will continue in the future. Imagine a bunch of Chinese communists turning a whole lot of Chinese and the billionaires in a big hurry. How do you reconcile the idea of paying 50 or 60 times revenue for a growing but unprofitable business with the more traditional value investing concept of a margin of safety? And, I was not surprised when it blew up. Are they more stable? I think this kind of crazy speculation in enterprises not even found or picked out yet is a sign of an irritating bubble. He was old as I am. 02/15. Im not trying to move mountains. Charlie Munger: I cant think of a We paid high prices for some little companies in the course of trying to enter the court software business. Everybodys got a different situation. If you try and reduce the poverty too much, its counterproductive. So its very difficult. Our editorial system and our advertising system are all in the cloud. I think any intelligent person can get to be pretty good as an investor and avoid certain obvious traps. Because even as a boy, I knew a lot about who was sound who wasnt sound in Ohama. Question: Mr. Munger recently raised the alarm about the level of money printing taking place. Ive seen the whole bus system shift from gasoline or diesel to gas and so it obviously isnt impossible, but youd have to create a whole new system of supply for it. And, of course, thats a very dangerous way to invest. And what are the implications, since Treasury assets underpin the value of every other asset? Always on point. It reminds me of the key phrase and Bunyans Pilgrims Progress in which he says: My sword I leave to him who can wear it. %PDF-1.3 Give me a new question. He was not a dictator. Question: Does management, in your opinion, have a moral responsibility to have their shares trade as close to fair value as possible? Take Gerry. Creating 360 value. So I think what China has done was probably right for China and that we shouldnt be so pompous as to be telling the Chinese they ought to behave like us because we like ourselves and our system. Interpretations of those facts will vary. Can you provide similar insight regarding the future at the Daily Journal and would you consider implementing policies like those at Berkshire so shareholders can get to know the up-and-coming leaders in the organization? How do you decide to hold on to a stock or sell some? And you mentioned technologythats very, very important. I think people have the theory that any intelligent hardworking person can get to be a great investor. I predict that if they do that, a lot of people will leave Washington. I dont even know how much more difficultor how much more dangerousit would be to deal with hydrogen than it is to deal with gasoline which is also a dangerous substance. Any copying, republication or redistribution of Lipper content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Lipper. <>/ExtGState<>/XObject<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/Annots[ 18 0 R 19 0 R] /MediaBox[ 0 0 612 792] /Contents 4 0 R/Group<>/Tabs/S/StructParents 0>> Questions: Why are some people incapable of learning new ideas and behaviors? What could investors do to cope better with periodical frenzy? You can argue that I got close to Sequoia when with Li Lu we bought into BYD. So, of course, I admire him. Munger's terse letter to Daily Journal shareholders. The most important decision in life to benefit those who are single, perhaps including some of your grandchildren and great-grandchildren. Question: I enjoyed your Caltech interview and wanted you to elaborate and provide more insights on your point of great investors and great chess players. Everyone knows this isnt a small cap Berkshire Hathaway. When these people go, there is none replacing them. Last year it quintupled. Charlie Munger: Well, the people doing the computer software are doing magnificently wellthe people under Gerry: Maryjo and Danny. I think all good investing is value investing. You have to be concerned about employees lives. Heres that transcript, starting at 37:37, from the full interview here: https://ca.finance.yahoo.com/ video/charlie-munger-speaks- daily-journals-185409394.html Question: Should there be a tax on buying stock now that Robinhood trades are free? For a quarter in which we made only a handful of portfolio changes and essentially broke even, lot At the age of 97, Charlie Munger wasnot surprisinglysharp as a tack. What were the lessons learned? So it gets very dangerous. Larry Summers has recently been quoted as being worried that were having too much stimulus. We all live with that problem. Thats an interesting example of self-learning. Data are provided 'as is' for informational purposes only and are not intended for trading purposes. We miss Rick terribly. We have our crotchets and I just dont know enough about it to want to go into that activity. But, of course, I think there will be more automation in transportation of all kinds in the future. Question: The highly configurable JTI product may help e-suites integrate deeply into new jurisdictions as agencies and citizens become familiar with the courthouse software. That doesnt happen. At the age of 97, Charlie Munger wasnot surprisinglysharp as a tack. Always intelligent. Accounting is also in the cloud. All except for the legal advertising system which we had to build because nobody else has the volume that we have. I dont think it was a mistake to buy the Daily Journal when we did, paying the price we did. How would they think about current opportunities with low rates and low inflation? But the Chinese have proved that you dont need free speech to have a wonderful economy. I expect that and I welcome it. Charlie Munger: Well, it helps to be able to leave the IQ test early with the highest score. So I dont worry that the country is being ruined by a few people over getting ahead a little faster than the rest of us. We focused and de-risked the company through strategic portfolio actions, significantly accelerated our debt reduction, Of course, it really helped to know everybody in town. Question: You famously run investments through your mental checklist. Where does it appear most egregious? There arent that many people like Lee Kuan Yew that have ever lived. He was death on corruption which was a very good idea. And if there is one thing the world could learn from Singapore, what would that be? Capitalism is almost as brutal as that. In other words, its your money. What, for example, is to stop the Chinese government from simply deciding one day to nationalize BYD? And like last year, you will in this note find a full transcript of the entire meeting. I think you can count on the fact that if we really like the company and we like the managementand that is the way we feel about BYDwere likely to be a little too loyal. And, I think that could happen, but, of course, thats not a sure thing. Change value during the period between open outcry settle and the commencement of the next day's trading is calculated as the difference between the last trade and the prior day's settle. Welcome! And I just think it was academically inconvenient for them. The mantra he said over and over again is very simple. And all I can say is that well do the best we can. The disruption from the decline in newspapers has had a significant impact. x\o6 >j.bY|UI\$nj'-Bdfv~QG#y9>}wU~;|=,a>?&UVDWUr{{&?:B%\DIzRYI'gYY]1$9|4JYf%rUe4.L_.J8h`?8([^RWQ/H?e}^6.bw{s Theyre no longer using peasant girls to beat the brains out of our little shoe companies in America. % Charlie Munger: Well, its not easy to handle accumulated money in the current environment when these stocks are so high and partials of real estate of certain kinds are also very inflated. Thats been greatly curtailed. <>>> You can hardly think of anything more important in life than being reliable for the people who trust you. So its a very theoretical discussion. And that is why Costco presents some danger to Amazon. Has the quality of the publication suffered as the employment levels have decreased? Question: In this years annual letter, you mentioned the share price increase was driven by speculative frenzy and forced index buying. Its one of the most ignorant professions in the world. Charlie Munger: 2022 Daily Journal Annual Meeting Transcript, Charlie Munger: 2020 Daily Journal Annual Meeting Transcript. Charlie Munger: Yes, I think it must end badly but I dont know when. He lived in a particular town. What do you look for in a leader? Furthermore, hed gone through the Great Depression. Think of all the monopoly newspapers that used to be, in effect, part of the government of the United States. But he could play chess blindfolded at just below the Grandmaster level. The death tax in China is zero. endobj Munger We got a dividend of two and a half million shortly thereafter. But, of course, you should start out by studying the history of capitalism, how it worked, and why before you start studying business. Question: Last year, almost every ecommerce, internet, and internet adjacent stock was up 100 plus percent. Beyond restaurants, consumers showed a growing interest in many of the newer categories on our Marketplace in 2021. Ive been around for a long time and my policy has always been to just write them out. April 14, 2022. Theron Mohamed Jan 22, 2021, 11:41 AM Charlie Munger. Charlie Munger: Well, that is easy. WebThe rapid collapse of BYD's H-share price caused by (1) the news that Citibank was holding Berkshire's shares, and (2) that Berkshire, owner of 20.5% of the H-shares is now selling I dont think well change on that. I dont think its like the newspaper business. And if you believe Jeff Bezos is one of the best businessmen you have ever known, would you consider investing early in any of the new projects he will inevitably focus his attention on now that he will not have to be as concerned about the day to day responsibilities of Amazon? And some bankers yield to the temptations. Dec 2021 Mar 2022 Jun 2022 Sep 2022 Dec 2022 Total \h_^cBa\"BfuLj@`}Ze jZ*l!-;LUe=v3+adjh4Sz8h*`iQ5>dZ;c8sgu[9|7$t}HkN5xv.,GqwYp0Y,53Urn i*5"x~z0GYkgPU0gbivl:"[Z@"S5mdY = 14M.6X!8&[R-p;a)}P5Y^wE7>L>39ju oH*crZRYTf 0@N',.>BP%M72HY=eY\ |Lt[kC&15YsATr*z=%4;mSH4%ZJ[WI]da f1u#{z)`|Es5dH^,X"I3V4&F@N]6# 7V}cDCY$P(Xa:FVPfl\V!ZA~jtSBtrleZuV"Nr7cA_ u!LC36Mh]82(M+ RR)mnk d=#:v4P^^xEbt:x85!K-yQK Nu=?vL]'.vq|1b* pS67-K^sqj Any tips for someone who wants to work on and improve their ability to hold two opposing views at the same time? I knew a man once, Henry Singleton, who was not a chess champion. If you go to a little country like Estonia, the whole damn country is on the internet and its a very good idea. SHAREHOLDERS ARE URGED TO DATE, FILL IN, SIGN, AND MAIL THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. He loved to kid people. Absolute insanity. Its too volatile to serve well as a medium of exchange. I think that shareholders should be more sensible and not crowd into stocks and buy them just because theyre going up and they like to gamble. And, of course, its going to create trouble as it did. Charlie Munger: I have seen an episode or two of the Queens Gambit. Charlie Munger: Well, Im constantly making mistakes where I can, in retrospect, realize that I should have decided differently. And I think both of us have done the same thing; we just suck it in and cope. Thanks u/Arceus122. Questions: Many observers see market behavior that reminds them of the Dot Com bubble: wild speculation, endless SPACs, and IPOs soaring on their first day of trading. Question: You have revised your famous talk on the standard causes of human misjudgment with considerable new material back in 2005. Charlie Munger: Gerry, whats the biggest mistake weve made? Question: Is the oil and gas industry the new newspapers? And he was just so good. So, I think you can count on the fact that what were doing is going to be a big growing field. Just time after time, he would choose the right system. I find that by working at that, I can actually make some improvements even though Im old. Charlie Munger: Well, I consider that very unlikely. Its such a simple idea. Would you mind elaborating on how a professor or individual should go about building a curriculum around this approach? There are these periods in capitalism. People really trust Costco will be delivering enormous value. Thats the nature of capitalism. I think most people who are assuming tolerable success in life are about as happy as they were ordained to be. SVB Shareholder Action Reminder - MarketWatch That happystat has more to do with their happiness and their outcomes in life. tzJ/wa*''=`R9+eJ}hv&iA+sn\/t`5q2(5l.h% dD2)ls.sz M4Z6X_h+ak,+,D^'a%&2K~SO@z'9f)xC? 6ZERFyGh.Q{BoM$k2YNNV'Vq3yd;6. And when the evidence came in that the system wasnt working very well because some of the employees were cheating some of the customers, they came down hard on the customers instead of changing the system. If the seas were to rise 60 feet, which could happen in another 100 years or so, wed have to build enormous barriers to sea entry. We hope theyll continue doing magnificently well. They had to because the traditional business newspaper business is shrinking. Question: The Federal Reserve appears to be supporting asset prices. I dont think I can teach you how to retroactively get a new accident yourself. Daily Journal Corp : Submission of Matters to a Vote of Security Holders (form 8-K) AQ. Question: You often advocate for learning from other peoples big calamities and stupidities. 3 0 obj endobj Hed been a receiver for a bank. As we can see from the deteriorating U.S. relationship with China, the Western world does not understand China. And would the Daily Journal consider Bitcoin or any other cryptocurrency as an asset on the balance sheet similar to what Tesla recently did? I do think that Im way less afraid of inequality than most people who are bleeding about it. 2021 Key Results Total net revenue grew 55% year-over-year (YoY) to $2.765 billion Platform revenue increased 80% YoY to $2.285 billion Gross profit was up 74% YoY to $1.409 billion Active Accounts reached 60.1 million, a net increase of 8.9 million active accounts from Q4 2020 Streaming Hours increased by 14.4 billion hours YoY to Question: Youve spent much of your life contributing your wisdom to schools and hospitals. We discuss the company Berkshire Hathaway and the economic context in which it operates. They lose their money fast enough. We have offices in all the major cities in California and also in Logan, Utah. When you respond to software by the RFP process, its a very difficult, demanding business and its less profitable and less sure than what Microsoft does. Could you share the secret to living a long, healthy, and happy life? Charlie Munger: I dont think you can make that a moral responsibility. %%`EQ=@jMjkjJn. g5? 5T And they dont just keep everlastingly at it the way he did. New species are created and old species are dying. I think management should tell it like it is at all times and not be a big promoter of its own stock. In fiscal 2021, we reached revenues of $50.5 billiona significant milestone that represents 11% growth in local currency and the addition of $6.2 We were trying to save the whole economy under terrible conditions. When you look at whats happened in California [in terms of] the price of real estate and rentals, weve reduced the number of offices we have both for Journal Technology and for the Daily Journal. And he made a very favorable impression. We always want to get the facts right. Is it digital wallets like PayPal, Square, or Apple Pay? Of course, its going to be difficult. Also, subscribe to the newsletter to receive new research, articles, and other interesting stuff directly to your inbox. Thats very, very important. We were together in that for a long, long time, and then Rick and I did the Daily Journal together on another occasion. Any tips on how to generate insight in these types of situations? Given the developments over the past year, could you give us an update on your assessment of wretched excess in the system? Washington State is actually considering a wealth tax at the state level. And I applaud the result. And yet he made a lot of mistakes in the course of living his life. Do you think this is a worthwhile policy objective given the effect it has on creating financial excesses and income inequality? That turned out to be a wonderful idea and thats one of the reasons we made all this money. Theres a lot of temptation to do dumb things which will make the earnings next quarter go up but are bad for the long term. I expect less out of bankers than he does. Gerald Salzman: There are a number of factors that come into play here. Question: Do you believe any psychological personality tests, such as the Myers-Briggs Type Indicator, to be of any good in choosing a compatible partner, given that choosing a spouse is probably the most important decision one can make in life.
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