{"id":491,"date":"2017-03-22T23:31:30","date_gmt":"2017-03-22T23:31:30","guid":{"rendered":"http:\/\/charliemungersays.com\/?p=491"},"modified":"2017-10-24T23:17:09","modified_gmt":"2017-10-24T23:17:09","slug":"66-wonderful-tidbits-from-omaha","status":"publish","type":"post","link":"https:\/\/charliemungersays.com\/index.php\/2017\/03\/22\/66-wonderful-tidbits-from-omaha\/","title":{"rendered":"66. Wonderful Tidbits From Omaha"},"content":{"rendered":"

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

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

http:\/\/www.omaha.com\/money\/buffett\/warren-buffett-charlie-munger-s-lessons-as-worthwhile-today-as\/article_ef5ec766-ff78-57cd-a4b4-58f6999a2b47.html<\/strong><\/a>
\nhttps:\/\/www.facebook.com\/groups\/charliemungersays\/<\/a><\/p>\n

    \n
  1. (On boards of directors) – <\/strong>If you embarrass big shots, you have a better shot that they\u2019ll have better behavior<\/strong><\/b><\/li>\n<\/ol>\n

     <\/p>\n

    Buffett: \u201cIf you embarrass big shots, they will behave better. And in that respect, probably the press has done more to cause boards to behave as they should than anything we can dream up.\u201d<\/p>\n

    2. (On dividends) \u2013 We\u2019d Pay Dividend If \u201cW<\/strong>e can\u2019t deliver more than a dollar of market value per dollar retained.\u201d [Can You Do Better Than The Oracle Of Omaha? I Don\u2019t Think So. \ud83d\ude42<\/strong>]<\/strong><\/b><\/p>\n

    Munger: \u201cWe say our break point is when we get so we can\u2019t deliver more than a dollar of market value per dollar retained, we will start distributing the money to the shareholders instead of retaining it. That\u2019s our break point.\u201d<\/p>\n

    Buffett: \u201cWe might distribute more than 100 percent of the earnings.\u201d<\/p>\n

    Munger: \u201cYou\u2019re damn right.\u201d<\/p>\n

    3. If You Think A Computer Prgram to invest automatically in volatile stocks can give you 2 to 3 percentage points per annum over two or three decades, you are day dreaming.<\/strong><\/p>\n

    Munger: \u201cIf you talk about Berkshire, I think the result would be far less than what we get using our methods. And I am deeply suspicious of the idea that a strategy so simple would work to produce a large advantage.<\/p>\n

    \u201cI think if people believe there would be a huge advantage \u2014 2 to 3 percentage points per annum over 20 or 30 years \u2014 they should believe in the tooth fairy.\u201d<\/p>\n

    4. On Pay financial advisers for acquisitions. How About Paying Them To Advice Me Not To Acquire?<\/strong><\/p>\n

    Buffett: \u201cIf I\u2019m going to pay $5 million to somebody if they give me the advice and the deal goes through, then I think I probably ought to pay $5\u00a0million to somebody else whose advice I listen to who gets paid the $5\u00a0million only if the deal doesn\u2019t go through.\u201d<\/p>\n

    5. On Corporate Managers & Monkeys In Zoos: It\u2019s All About The Tokens<\/strong><\/p>\n

    Munger: \u201cThey\u2019ve done very interesting experiments with monkeys in zoos. They create a system where the monkey can do things to get a token and the token can immediately be exchanged for a banana. The monkey soon learns to work just as hard for a token as he formerly did for a banana.<\/p>\n

    \u201cYou can hardly think that corporate managements are going to be much better.\u201d<\/p>\n

    6. Li Lu\u2019s Great Admiration For His Two Venerable Teachers<\/strong><\/b><\/p>\n

    Li Lu\u2019s reflections on turning 50 in April \u2014 which he calls the first half of his life \u2014 appeared recently on his Facebook page, and the California investor gives much credit for his financial success to Buffett and Munger.<\/p>\n

    For a time, Li was considered a potential money manager for Berkshire but decided to continue running his own investment fund in California. It was Li who recommended to Charlie Munger that Berkshire invest in BYD, the Chinese auto and battery company, in 2008.<\/p>\n

    In his Facebook post, Li said the relationship began well before that.<\/p>\n

    \u201cMy temperament and experiences prepared me well for a career in investment,\u201d Li wrote. \u201cI was extremely lucky to be introduced into the field by the greatest investor who ever lived when I accidentally stepped into a lecture by Warren Buffett at Columbia (University) nearly 25 years ago.<\/p>\n

    \u201cAnd it was even more magical 13 years ago when Charlie Munger became my investment partner, mentor and lifelong friend. To this day, I don\u2019t know to what I would attribute this extreme fortune. It is something even the wildest imagination or the best fiction could not conjure.<\/p>\n

    \u201cNow that I have compiled a record of my own for over twenty years, still enjoy the game even better than when I started, I think I will simply continue.<\/p>\n

    \u201cI\u2019m curious to see how long I can follow the great record set by my teachers, Warren and Charlie, that is by now well over fifty years. Not for the size of asset under management, not for the fees, just keep a score card the way a golfer would after each round and after a lifelong career.\u201d<\/p>\n

    7. Berkshire (Through Clayton Homes) built more than 34,000 homes in 2015. Walk The Talk, Build The Homes<\/strong><\/p>\n

    Berkshire\u2019s Clayton Homes division is now building homes on-site, beyond the factory-built houses that have been its trademark.<\/p>\n

    The Maryville, Tennessee, company\u2019s Clayton Properties division got underway about a year ago with the purchase of 81 residential lots in Atlanta and recently sold its 500th site-built home.<\/p>\n

    Last week the company purchased Summit Custom Homes, the largest home builder in Kansas City, Missouri, and owner of about 12,000 lots, paying an undisclosed amount.<\/p>\n

    Clayton, a part of Berkshire since 2003, built more than 34,000 housing units last year, counting site-built homes, modular homes, manufactured housing, \u201ctiny\u201d homes, college dorms, military barracks and apartments.<\/p>\n

    We can almost see a pattern here.<\/p>\n

    When the financial crisis hit the housing industry in 2008, Buffett said it would be wise to buy a house as prices declined and a good time to expand in the real estate business.<\/p>\n

    Berkshire\u2019s real estate business now has more than 30 offices with 26,000 agents plus more than 400 franchisees with another 44,000 agents.<\/p>\n

    Keith Holdbrooks, president of Clayton\u2019s home building group, said Clayton is pursuing a similar growth strategy and wants to acquire more companies like Summit.<\/p>\n","protected":false},"excerpt":{"rendered":"

    Excellent Book: Charlie Munger For All Seasons http:\/\/www.omaha.com\/money\/buffett\/warren-buffett-charlie-munger-s-lessons-as-worthwhile-today-as\/article_ef5ec766-ff78-57cd-a4b4-58f6999a2b47.html https:\/\/www.facebook.com\/groups\/charliemungersays\/ (On boards of directors) – If you embarrass big shots, you<\/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":[3,4],"tags":[],"class_list":["post-491","post","type-post","status-publish","format-standard","hentry","category-investment","category-wisdom"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/posts\/491","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=491"}],"version-history":[{"count":5,"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/posts\/491\/revisions"}],"predecessor-version":[{"id":869,"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/posts\/491\/revisions\/869"}],"wp:attachment":[{"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/media?parent=491"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/categories?post=491"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/charliemungersays.com\/index.php\/wp-json\/wp\/v2\/tags?post=491"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}