Investment Wisdom

137. Who Can Give You A Billion Dollars Worth Of Wisdom? Eight Things You Learn From a Munger-Fest @ Wesco 2009

Ethereal Book: Charlie Munger For All Seasons

In reality, this is Munger-fest – the one time of year when shareholders, investment managers and the press get to listen to Munger’s musings and ask him questions. The Pasadena billionaire, who is Buffett’s right-hand man, is considered one of the world’s savviest investors – someone who has helped guide Buffett’s portfolio picks since 1959.



  1. A lifetime of practicing what he preaches has made Munger a billionaire: Good businesses are ethical businesses, he tells us. A business model that relies on trickery is doomed to fail.
  2. “How serious is the present economic mess?” Munger asks. “Deadly serious. The worst mess since the Great Depression. You can’t tell what happens when people get discouraged enough.”
  3. “You only hear from Charlie Munger here,” Darrach McCarthy said. “He’s got a very original take on things.”
  4. He says Wesco is solid and well-financed, and predicts that the financial crisis will have no lasting effect.
  5. “I am willing to buy common stocks with long-term money at these prices,” Munger said. “Is Coca-Cola worth what it’s selling for? Yes. Is Wells Fargo? Yes.” He owns both.
  6. “If you wait until the economy is working properly to buy stocks, it’s almost certainly too late,” he said. “I have no feeling that just because there’s more agony ahead for the economy you should wait to invest.”
  7. Not surprisingly, Munger was less than bullish on automakers. The U.S. auto industry has adapted too little, too late, he said, and seems capable of survival only with regular infusions of cash from taxpayers, which he doesn’t recommend. “The natural consequence of capitalism is that some companies succeed and some companies die,” Munger said.
  8. But capitalism, he said, doesn’t equal deregulation. Financial firms, which were at the forefront of the economic cataclysm, need to be re-regulated into boring, slow-growing businesses, Munger said. “I don’t see any reason why a major bank that was ‘too big to fail’ should be anything but a very boring business,” he said. “I don’t see any reason why you should have a system where every bright young man fresh out of college should have $8 billion to play with.”

Source: –  (May 17, 2009 – Kathy M. Kristof, LA Times)