{"id":349,"date":"2017-02-12T01:44:45","date_gmt":"2017-02-12T01:44:45","guid":{"rendered":"http:\/\/charliemungersays.com\/?p=349"},"modified":"2017-10-25T00:27:18","modified_gmt":"2017-10-25T00:27:18","slug":"37-berkshire-annual-meeting-2005-part-i-points-9-16-for-wisdom-fun-of-learning","status":"publish","type":"post","link":"https:\/\/charliemungersays.com\/index.php\/2017\/02\/12\/37-berkshire-annual-meeting-2005-part-i-points-9-16-for-wisdom-fun-of-learning\/","title":{"rendered":"37. Berkshire Annual Meeting 2005: Part II: Points 9-16 for Wisdom & Fun (of Learning)"},"content":{"rendered":"

\"\"<\/a><\/strong><\/p>\n

Excellent Book: Charlie Munger For All Seasons<\/a><\/p>\n

Wisdom & Fun 9. On Insurance: I think about this a lot \u2013 it\u2019s my job to think about the absolute worst-case scenario. No matter what happens, we\u2019ll be OK.<\/strong><\/p>\n

Managing Insurance Risk<\/p>\n

We are doing some things in insurance that have some correlations. For example, we have insured a lot of things in California and if you have the right earthquake at the right time, not only could National Indemnity and GEICO incur losses, but See\u2019s and Wells Fargo would as well. And we used to own Freddie Mac [which would get hit as well].<\/p>\n

I think about this a lot \u2013 it\u2019s my job to think about the absolute worst-case scenario. No matter what happens, we\u2019ll be OK.<\/p>\n

The most likely mega-cat is a hurricane. In Long Island, there\u2019s huge exposure [by the entire insurance industry]. The last big hurricane hit there in the 1930s [and insurance is being priced accordingly]. But everything that can happen will happen.<\/p>\n

The most powerful earthquake in U.S. history \u2013 9.0 \u2013 was in New Madrid, Missouri.<\/p>\n

It\u2019s Berkshire\u2019s job to be absolutely prepared for the very worst. A few years ago, we didn\u2019t have nuclear\/chemical\/biological risk exclusions [in our insurance policies] \u2013 we had huge risk, but it\u2019s gone now.<\/p>\n

We wrote a policy for $500 million in excess of $2.5 billion, not caused by a nuclear\/chemical\/biological attack, on a major international airport. There was a cap of $1.6 billion for business interruption, so there would have to be more than $900 million of property damage [before we\u2019d have to pay anything].<\/p>\n

We insured the [NCAA basketball] Final Four against being cancelled (not moved or postponed), excluding nuclear\/chemical\/biological attacks. We would have paid $75 million [in this event]. We also insured the Grammy\u2019s in a similar way. We\u2019re OK with losing a lot of money, as long as we\u2019re being paid appropriately for the risk.<\/p>\n

Nuclear\/chemical\/biological attacks are excluded from virtually all of our policies. We write it only when we\u2019re specifically getting paid for it.<\/p>\n

Munger: We care more about thinking about things that have never happened. Think of a 60-foot tidal wave hitting California. Can you imagine?<\/p>\n

Is there any other company that has attacked [reducing the insurance risk of] nuclear\/chemical\/biological attacks as well as us?<\/p>\n

Buffett: No-one has attacked it more vigorously than we have. It\u2019s Armageddon here every day. (Laughter)<\/p>\n

My aunt, who died last year, had everything she had in Berkshire [stock. With investors like this,] it would be crazy to take any risks to jeopardize this [company] to make an extra $100,000 or add a point to the track record. Maybe if I had a 2\/20 [incentive fee structure; 2% management fee and 20% promote], I\u2019d behave differently, but I sure hope not.<\/p>\n

Wisdom & Fun 10. On Europe: Europe isn\u2019t doing as badly as you might think. Its growth rate is lower than ours, but our population is expanding a lot faster, so on a per capital basis, the gap is not as wide as you\u2019d think.<\/strong><\/p>\n

Comments on Investing in Europe<\/p>\n

One disadvantage to buying a stock in the UK is that you have to report your holding once you reach the 3% level. So, for a stock with a $5 billion market cap, we\u2019d have to report [and likely run the stock up] once we\u2019d acquired only $150 million. But in the past, we\u2019ve owned Guinness, which is now owned by Diageo, so this is not an overwhelming disadvantage. We\u2019d be very comfortable owning many UK companies.<\/p>\n

Incidentally, contrary to what\u2019s been reported, we do not have to report a 5% position within 10 days [referring to reports in The Wall Street Journal and elsewhere that Berkshire would have to file on its recently disclosed purchase of Anheuser-Busch stock if it held more than 5% of the shares outstanding].<\/p>\n

Munger: Recently we\u2019ve preferred the currencies of socialized Europe over the U.S. dollar. A queer occurrence\u2026<\/p>\n

Buffett: I remember when I\u2019d come back from Europe and couldn\u2019t wait to convert my euros back to dollars.<\/p>\n

Europe isn\u2019t doing as badly as you might think. Its growth rate is lower than ours, but our population is expanding a lot faster, so on a per capital basis, the gap is not as wide as you\u2019d think.<\/p>\n

COMMENTS ON BERKSHIRE HATHAWAY HOLDINGS<\/p>\n

Berkshire\u2019s Stock Holdings<\/p>\n

We\u2019re at the lowest percentage of public holdings ever [relative to all of Berkshire\u2019s assets], except for when we were winding down [in the early 1970s].<\/p>\n

We\u2019re not unhappy with our public holdings like Coke, Wells Fargo and Moody\u2019s, but would we buy more? Well, we\u2019re not, so there\u2019s your answer. But due to taxes, the size of our positions, etc., we\u2019re not selling either.<\/p>\n

We\u2019re not in an attractive time.<\/p>\n

Munger: It\u2019s not a permanent state of affairs, but it\u2019s not going away.<\/p>\n

We will still put large amounts of money to work at good rates, whereas now we\u2019re only able to invest small amounts \u2013 where small is still billions.<\/p>\n

Wisdom & Fun 11. Avoid Credit Card Debt<\/strong><\/p>\n

Best Investments Ever (and Avoid Credit Card Debt)<\/p>\n

See\u2019s was very important to us to learn about [running a] business, and to provide cash for a lot of other things.<\/p>\n

[Also,] buying the first half of GEICO for $40 million, given what we\u2019ve gotten out of it and its future potential. (We later paid $2 billion for the 2nd half.) GEICO still has enormous possibilities for growth.<\/p>\n

In the past I\u2019ve touted the American Express card \u2013 well today, I\u2019m going to tout the GEICO credit card. That being said, I advise you to pay off your credit card. It\u2019s a terrible mistake to get hooked on revolving credit at high interest rates.<\/p>\n

I met with 21 groups of students last year and what I tell them is, even if you don\u2019t remember anything else I say, please don\u2019t get hooked on credit card debt.<\/p>\n

GEICO is a great, great business model, run by a superb person and businessman, Tony Nicely.<\/p>\n

Munger: The search expenses that brought us Ajit Jain \u2013 I cannot think of a better investment.<\/p>\n

This is a good life lesson: getting the right people into your system is the most important thing you can do.<\/p>\n

Anheuser-Busch<\/p>\n

Most of the time, our actual decision [to buy] takes about two seconds. In the case of Anheuser-Busch, I bought 100 shares 25 years ago so that I would get the annual reports (you get the annual reports a little quicker if you own the stock in your own name). So, I\u2019ve been reading the company\u2019s annual reports for 25 years. Recently, beer sales have been flat. Wine and spirits are growing, at the expense of beer, and Miller has been rejuvenated to some degree. So, Anheuser-Busch has been experiencing very flat earnings; they\u2019ve had to spend more to maintain share and even do a bit of promotional pricing. They are going through a period that is certainly less fun for them than was the case a few years ago.<\/p>\n

It\u2019s been a fascinating industry over the past 50 years. Omaha used to be a brewing town and Storz beer had 50% of the local market, but then the national brands took over.<\/p>\n

Anheuser-Busch will have a strong position for a long time. The beer business is not going to grow significantly in the U.S., but worldwide beer is popular in a great many places, and Anheuser-Busch has a very strong position. I would not expect the earnings to do much for some time, but that\u2019s fine with us.<\/p>\n

Munger: In our situation, it\u2019s rare that we can buy into a good company \u2013 we almost need a little unpleasantness.<\/p>\n

Buffett: That\u2019s true for Berkshire too.<\/p>\n

In beer, you don\u2019t see the rise of generic brands, as we\u2019ve seen in so many other categories. But beer consumption per capita is going nowhere.<\/p>\n

Americans drink about 64 ounces of liquid per day. 27% of that is soda (11 ounces are Coke products), beer is about 10% and, despite the rise of Starbucks, a fine company, coffee has gone down and down over time.<\/p>\n

Wisdom & Fun 12. Giant Companies Dominating The Beer Industry Will Be The Norm<\/strong><\/p>\n

Munger: There used to be hundreds of brewers. I think the trend toward giant companies [dominating the beer industry] is permanent.<\/p>\n

Buffett: Schlitz used to be the #1 brand of beer.<\/p>\n

There\u2019s a great book on the history of the beer industry [he didn\u2019t give the title, though mentioned it was written by a Wall Street Journal reporter. Most likely it is Travels with Barley: A Journey Through Beer Culture in America, by Ken Wells.]<\/p>\n

PetroChina<\/p>\n

We bought it a few years ago, investing $400 million. It was my first investment in a Chinese stock.<\/p>\n

I read the annual report. They produce 3% of the world\u2019s oil, about 80% as much as Exxon Mobil. Last year, it earned $12 billion in profit \u2013 only maybe five US companies earned as much last year.<\/p>\n

The total market value when I bought it was around $35 billion, so I paid only three times last year\u2019s earnings. The company does not have unusually large amounts of leverage and \u2013 this is unusual \u2013 has a stated policy of paying out 45% of its earnings in cash, so that\u2019s a 15% cash yield [based on last year\u2019s earnings, since Berkshire bought it at 3x those earnings].<\/p>\n

The Chinese government owns 90% and we own 1.3%, so if we vote with them, together we control the business. (Laughter)<\/p>\n

Unfortunately, we don\u2019t own the same shares [as the Chinese government]. [We own another class of shares such that] we had to report our interest [in the company] at 1.3%. We would have liked to buy more, but the price jumped up [after our ownership stake was disclosed].<\/p>\n

Munger: It would be nice if this [finding really cheap stocks] happened all the time. Unfortunately, it doesn\u2019t.<\/p>\n

Buffett: I simply read the annual report. I had no contact with management nor did I attend any management presentations. I just sat in my office and invested $400 million, which is worth $1.2 billion today.<\/p>\n

I also looked at Yukos, the big Russian oil company [at the time I bought PetroChina] and compared the two at the time. PetroChina was far cheaper and I thought the economic climate was likely to be better in China. Yes, there was risk of tax laws or ownership rights changing, but the price was ridiculous.<\/p>\n

HomeServices of America<\/p>\n

We don\u2019t think the way homes are bought and sold will change very much. Some will disagree, but we don\u2019t think the internet will change this. [Buying and selling a home] is the biggest financial decision most people will make] and people will continue to want to have a 1-on-1 relationship with a real estate broker. [It also will be] a local business, so we\u2019ve retained the local identities.<\/p>\n

It\u2019s almost certain that we\u2019ll be a lot bigger [in this business] in 5-10 years. It depends on how many acquisitions we make, but we\u2019re a good buyer and owner.<\/p>\n

Munger: As to whether we\u2019d prefer to buy brokerages or real estate, obviously we like brokerages better.<\/p>\n

Use Bill Gates to Invest in Tech Stocks?<\/p>\n

Charlie and I put money in things we understand and think we\u2019ll know what it\u2019ll look like in 5, 10 or 20 years. Bill being on the board doesn\u2019t change this. I\u2019ll listen to any idea of his and, in fact, our investment ideas overlap quite a bit. I still wish I\u2019d bought Microsoft when I\u2019d first met him. (Laughter)<\/p>\n

COMMENTS ON FINANCIAL COMPANIES AND RISKS IN THE FINANCIAL SYSTEM<\/p>\n

Comments on Financial Companies<\/p>\n

Wisdom & Fun 13. Financial companies are more difficult to analyze than other companies.<\/strong><\/p>\n

Financial companies are more difficult to analyze than other companies. They can report whatever earnings they want \u2013 it\u2019s an easy game to play. For banks, earnings depend on loans and the reserves set aside. It\u2019s easy to change and manipulate the reserves.<\/p>\n

With a company like WD-40 or a brick company, the financials are easy to analyze. But with financial [companies] it\u2019s tough, especially when you throw in derivatives.<\/p>\n

There were very high grade, financially sophisticated people who were on the boards of the GSEs [Government-Sponsored Enterprises, such as Fannie Mae and Freddie Mac] and they were not negligent, but it\u2019s very tough [to detect the shenanigans that went on].<\/p>\n

Charlie and I were on the board of Salomon and Charlie was on the audit committee, and [it\u2019s just impossible to evaluate thousands of transactions]. You\u2019ll just have to accept that with insurance companies, banks and other financial companies \u2013 it\u2019s just a more dangerous field to analyze.<\/p>\n

With GEICO it\u2019s easier because the statistics are quite accurate \u2013 it\u2019s short-tailed insurance. It\u2019s not like asbestos.<\/p>\n

I wouldn\u2019t fault the ratings agencies. Even the big-name auditors didn\u2019t catch it.<\/p>\n

Munger: Where you have complexity, by nature you can have fraud and mistakes. You\u2019ll have more of that than in a company that shovels sand from a river and sells it. This will always be true of financial companies, including ones run by governments. If you want accurate numbers from financial companies, you\u2019re in the wrong world.<\/p>\n

Bad Accounting and Derivatives<\/p>\n

Any accounting that gives people a rationale to reduce reserves even further is bad. There\u2019s such a tendency to reduce reserves for long-tailed [insurance] policies \u2013 to understate them \u2013 especially if the CEO is retiring or options are vesting.<\/p>\n

In derivatives, both sides book a profit; this is especially true of traders who are on commission.<\/p>\n

We\u2019re three years into unwinding Gen Re\u2019s derivatives book and you would not believe the complexity. Most of it was marked to market, so you\u2019d think it would only take a few days to unwind.<\/p>\n

I don\u2019t think any regulator or auditor [has any hope of getting a handle on any big derivatives book].<\/p>\n

Munger: The stupid and dishonest accountants allowed the genie of totally inappropriate accounting to descend on derivatives books. And once this has happened \u2013 people get status, etc. \u2013 it\u2019s impossible to get it back into the bottle.<\/p>\n

The housewife preparing her toast in the morning just isn\u2019t worried about a derivatives blowup.<\/p>\n

The people with vested interests in the status quo are very powerful. If you\u2019re going to try to fix this, you\u2019re going to have a very interesting life.<\/p>\n

Wisdom & Fun 14. Big consumer debt load and trade deficit could cause some financial market distress \u2013 there are great investment opportunities in dislocations \u2013 but the country will survive.<\/strong><\/p>\n

Also, Don\u2019t Be That Guy: I knew a guy who had $5 million and owned his house free and clear. But he wanted to make a bit more money to support his spending, so at the peak of the internet bubble he was selling puts on internet stocks. He lost all of his money and his house and now works in a restaurant.<\/strong><\/p>\n

Risks in the Financial System<\/p>\n

I think our currency will weaken, but I\u2019m not the Armageddon type. I think most of our citizens will be better off in 10 or 20 years.<\/p>\n

I\u2019m concerned about our political leadership, but as Peter Lynch once said, \u201cInvest in businesses any idiot could run because someday one will.\u201d (Laughter) We\u2019ve had all sorts of bad Presidents, but have still done well. Our real GDP per capital rose seven-fold in the last century, which is remarkable.<\/p>\n

Sure, the big consumer debt load and trade deficit could cause some financial market distress \u2013 there are great investment opportunities in dislocations \u2013 but the country will survive.<\/p>\n

Eventually the country will do fine, but there\u2019s a significant possibility of a chaotic situation.<\/p>\n

Munger: We don\u2019t have any great record making macroeconomic predictions. It\u2019s obvious that we could have some kind of convulsion however.<\/p>\n

Buffett: Far greater sums in one asset class after another are on a hair trigger. We\u2019re piling up huge financial assets at intermediaries, which lend themselves to huge dislocations. We\u2019ve turned over huge amounts of money to people who want to beat the S&P in the short term, and while they may appear to be independent, their actions are not independent. They can all try to head to the exits at the same time. But if you\u2019re selling, you must find a buyer. The only way to sell a burning seat in the theater is to find someone else to buy it.<\/p>\n

Munger: There\u2019s way heavier leverage by hedge funds and [others] today.<\/p>\n

I knew a guy who had $5 million and owned his house free and clear. But he wanted to make a bit more money to support his spending, so at the peak of the internet bubble he was selling puts on internet stocks. He lost all of his money and his house and now works in a restaurant.<\/p>\n

It\u2019s not a smart thing for the country to legalize gambling [in the stock market] and make it very accessible.<\/p>\n

Buffett: Is there anyone we\u2019ve forgotten to offend? We don\u2019t want to miss anyone. (Laughter)<\/p>\n

Risks in the Global Financial System<\/p>\n

Charlie and I are not as on board on this, so I\u2019ll answer it and then Charlie can share his thoughts.<\/p>\n

We have a $618 billion trade deficit and an even larger current account deficit. As large as we are, something will change [for the worse] and the longer it goes on, the worse it will be. Most economists say a soft landing is likely, but they don\u2019t say what this [will look like]. How the numbers come down is quite significant. Paul Volcker has expressed apprehension about [the likelihood of] a soft landing.<\/p>\n

There\u2019s as high a percentage as there\u2019s ever been fn money on a hair trigger \u2013 in foreign exchange, stocks, bonds, the carry trade\u2026 When people go to bed at night \u2013 an electronic herd \u2013 that can sell billions of dollars at the press of a key. I think this is at an all-time high. An exogenous event, like Long Term Capital Management \u2013 and it will happen \u2013 could trigger a stampede.<\/p>\n

If you hold dollars, you can\u2019t get rid of them. You can\u2019t sell them to the U.S., because you\u2019d get dollar-denominated assets in return. And you can\u2019t sell them to another country, like France [I forget the reason he gave].<\/p>\n

[He read a quote from Paul Volcker\u2019s recent article in the Washington Post and concluded:] The situation is dangerous and intractable and is at an all-time high. But I can\u2019t predict the timing.<\/p>\n

I would say that what\u2019s going on with the trade deficit will have serious consequences. But in the last Presidential race, neither candidate addressed it, which is understandable. 90% of the American people can\u2019t define \u201ccurrent account\u201d and it\u2019s hard to describe in three minutes. And it\u2019s not the kind of issue that Betty [the average American voter], when she\u2019s making her toast in the morning, asks herself, \u201cGee, that trade deficit is really unsettling me today.\u201d<\/p>\n

Charlie has a different view. Charlie?<\/p>\n

Munger: If anything, I\u2019m a little more repelled by the lack of virtue in how we as a nation run our financial affairs. Look at consumer credit\u2026 Things could get a lot worse.<\/p>\n

Buffett: How do you think it will end?<\/p>\n

Munger: Badly.<\/p>\n

Buffett: We\u2019re like an incredibly rich family. We sit on the porch of our huge farm \u2013 so big that we can\u2019t even see the end of it \u2013 and each year, we consume 6% more than the farm produces. To pay for this, each year we sell or mortgage a little bit of the farm that we can\u2019t see, so we don\u2019t even notice. We\u2019re very, very rich and the rest of the world is happy to buy from us or lend to us, so each year they take a piece of our valuable assets \u2013 and they work very hard.<\/p>\n

But we will have to service this. If it goes on for a long time, our children will pay. We\u2019re sending $2 billion per day [overseas right now].<\/p>\n

[What will cause a crisis? I don\u2019t know.] Does it reach a tipping point, or will there be an exogenous event?<\/p>\n

I have a hard time conceiving of any scenario in which the dollar appreciates.<\/p>\n

Munger: The counter-argument is: what does it matter if foreigners own 10% of us over time, if the pie grows by 30%? [But I don\u2019t buy this. Taken to its logical extreme,] what if we had no manufacturing and our only businesses were hedge funds?<\/p>\n

Imagine that if, instead of fighting the Revolutionary War, we\u2019d instead agreed to give Britain 3% of our GDP each year. This might have looked good in 1776, but not to future generations. It\u2019s like taxation without representation.<\/p>\n

Compliments for AIG<\/p>\n

Munger: I\u2019ll go out on a limb and say the following about AIG: I think that whatever comes out, they will find a lot that was right about AIG. There\u2019s a lot of ability in that place.<\/p>\n

Buffett: Oh yeah. Hank Greenberg was the #1 man in insurance. He built an incredible business. He took nothing and built the leading property and casualty insurer in the world.<\/p>\n

Wisdom & Fun 15. Be Careful Of Leverage & Derivatives<\/strong><\/p>\n

Hedge Funds and Private Equity Funds<\/p>\n

There\u2019s no doubt that there\u2019s far more money looking a deals now than in the past. They\u2019re willing to pay up to buy good but mundane businesses that we\u2019ve historically bought and had success with. Now it\u2019s not just private equity funds getting in \u2013 hedge funds are too.<\/p>\n

There\u2019s been a bit of a change in the past few weeks, as it\u2019s gotten a little harder to borrow money, but overall, we can\u2019t compete, which makes us feel distress.<\/p>\n

But it won\u2019t go on forever. In the near term, we are not positioned favorably at all, but you\u2019d be amazed at just how fast things can change. Things happen to change the landscape. At least three times in my career, there\u2019s been so much money sloshing around. It was so bad in 1969 that I closed my partnership. But only four years later, it was the best time to be a buyer in my entire life.<\/p>\n

1998 Crisis<\/p>\n

In 1998, there were incredible opportunities. Just like today, there were a lot of smart people with 150 IQs running around with lots of money, but there was a panic. For example, there was a 30 basis point difference in the yields of on-the-run and off-the-run 30-year Treasuries. Literally, a 29 1\/2-year traded 30 basis points higher than a 30-year because of the slight liquidity difference. You could have made a lot going long one and short the other. You wouldn\u2019t have thought this kind of thing was possible, but it happened.<\/p>\n

The high-yield market went crazy as well. In the span of only 14 months, you had yields go from 25%-60% to 7%. [Buffett put up the following chart:]<\/p>\n

Company Yield in late 2002 Yield later # of months elapsed<\/p>\n

Williams 75.4% 7.0% 14<\/p>\n

Dynegy 62.7% 6.0% 14<\/p>\n

Qwest 54.1% 8.5% 14<\/p>\n

Crown Cork & Seal 48.5% 4.4% 17<\/p>\n

[I missed a few in here]<\/p>\n

Corning 28.3% 4.4% 12<\/p>\n

Tyco 26.5% 4.7% 6<\/p>\n

We didn\u2019t own all of these.<\/p>\n

Fannie Mae, Freddie Mac and Other Highly Leveraged Financial Institutions<\/p>\n

The GSEs were a very logical development. For a fee, which used to average 25 basis points, they would allow someone 3,000 miles away to buy a mortgage [or portfolio of mortgages] and not worry. The GSEs were looked at as government guaranteed, so investors didn\u2019t worry.<\/p>\n

They became all about leverage \u2013 they could access capital at a low rate and built a huge carry trade [borrow at low short-term rates and lend at higher long-term rates]. Then they got carried away when they promised high rates of steady growth. It was madness \u2013 you can\u2019t do that. If you lend for 30 years to someone who can repay in 30 seconds, as a practical matter you can\u2019t perfectly handle that risk. So, they first enlarged their portfolios and then engaged in financial shenanigans.<\/p>\n

[I have written many columns about accounting shenanigans in: Corporations Favor Fudge, Where Has Corporate Integrity Gone?, More Earnings Shenanigans, IBM\u2019s Accounting Tricks, Lessons from the Enron Debacle, Lessons from Lucent\u2019s Cash Flow, Stocks to Avoid, More Stocks to Avoid, Another Financial Scandal? and Accounting for Non-Paying Customers.]<\/p>\n

It boggles the mind how, with good auditors and board members, they misrepresented billions of dollars. They now have $1.5 trillion of mortgages and the Federal government is on the hook \u2013 markets believe it and it is \u2013 because two companies wanted earnings per share to go up. They acted like the two largest hedge funds in history.<\/p>\n

People are now seeing the consequences of the government issuing a guarantee. Congress should be paying a lot of attention to this. You can\u2019t shut them down, but you can increase capital requirements and capital ratios. You could put them into run-off mode. There are plenty of other mortgage guarantee providers. It would not be the end of the world at all if the GSEs were put into run-off mode.<\/p>\n

Munger: I think their problems are due in part to their large derivatives books, which were sold to hem by silver-tongued salesman. As many of you know, I believe there\u2019s much wrong with derivative accounting and don\u2019t believe the full penalties have yet been paid.<\/p>\n

Buffett: If you can have a $5 billion mismark in one direction and a $9 billion mismark in the other direction [as was the case with Freddie and Fannie, respectively], I would say we\u2019ve come a long way from Jimmy Stewart in \u201cIt\u2019s a Wonderful Life\u201d.<\/p>\n

Wisdom & Fun 16.\u00a0 The best investment you can make is in your own abilities. If you own your own business in America [and you run it well, you\u2019ll do fine].<\/strong><\/p>\n

INVESTMENT ADVICE<\/p>\n

Invest in Yourself<\/p>\n

It\u2019s hard for individual investors to successfully pick stocks or time the market. The best investment you can make is in your own abilities. Anything you can do to develop your own abilities or business is likely to be more productive than investing in foreign currencies.<\/p>\n

If you own your own business in America [and you run it well, you\u2019ll do OK].<\/p>\n","protected":false},"excerpt":{"rendered":"

Excellent Book: Charlie Munger For All Seasons Wisdom & Fun 9. On Insurance: I think about this a lot \u2013<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-349","post","type-post","status-publish","format-standard","hentry","category-charlie-mungers-3-categories-of-investment-in-out-too-tough"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/posts\/349","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/comments?post=349"}],"version-history":[{"count":3,"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/posts\/349\/revisions"}],"predecessor-version":[{"id":899,"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/posts\/349\/revisions\/899"}],"wp:attachment":[{"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/media?parent=349"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/categories?post=349"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/tags?post=349"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}