Investment Wisdom

138. A man told his sons, 7 and 10: I don’t care if you don’t understand but sit down and listen for one hour and then you can hit the malls. Guess who’s the speaker? Sit On Your Patoot and Learn More From Charlie Munger @ Wesco 2011

Smashing Book: Charlie Munger For All Seasons






(1) Munger, billionaire Warren Buffett’s investing partner for 46 years and vice chairman of Buffett’s Berkshire Hathaway, meets with an audience of devotees in Pasadena for the last time. “You people aren’t normal.”

(2) Munger used his opening remarks to take another jab at the “megalomania” of bankers who he says brought on the real estate bubble of the last decade. A lot of banking, he said, had become “gambling in drag.”

(3) He also said some of Wall Street’s computerized traders were the equivalent of “letting rats into the granaries.”

(4) Herbert Yu, a 44-year-old executive at a Santa Ana printing company, said Munger and Buffett “are my heroes.” Burned by dot-com stocks in the early 2000s, Yu said he soon after adopted the famed investors’ “value” investing style. “I’ve been outperforming the market” since then, he said. Yu brought his two children, ages 10 and 7, to the meeting because he said he wanted them to soak up Munger’s wisdom — even if they weren’t quite sure what they were hearing. “I made a deal with them: Sit here for one hour, and then you can go to the mall,” he said.

(5) Munger held forth for three hours, with the final two devoted to questions from his admiring audience. Many asked life-coaching questions — how to succeed in marriage, with children and in careers. In business and in personal affairs, be patient but aggressive when you know what you want, Munger advised. He also stressed the importance of continuous learning. His current field of study: astrophysics.

(6) He said Coca-Cola Co., a longtime Berkshire stock holding, was “not nearly as good a business as 20 years ago,” but that as major companies go, it still was “one of my favorites.”

(7) Munger also praised Costco Wholesale Corp., on whose board he sits. The retailer “is about as admirable a capitalist enterprise as ever existed,” Munger said.

(8) A few attendees asked about Berkshire’s controversial investment in Chinese automaker BYD, which has suffered a plunge in sales and earnings. Munger, who typically has great praise for China, said he “loved the people” at BYD and expected to hold the stock “to the end.”

(9) Asked whether Berkshire’s own shares were a true value at the current price ($117,050 for a Class A share), Munger answered indirectly: “I think people who own Berkshire at the current price will do quite all right sitting on their patoots.”

Source: – July 01, 2011|By Tom Petruno, Los Angeles Times