Mungerisms

2016 Daily Journal Meeting Notes

2016-02-14T18:13:00.004-08:00

While not a transcript, our 2016 notes are the most comprehensive you'll find. They are every bit as good as the 2015 notes.

DJCO 2015 Meeting Notes

2015-03-28T08:19:00.001-07:00

My 2015 Daily Journal Meeting Notes are available here.

Daily Journal 2014 Notes

2014-09-17T05:57:00.003-07:00

I have pages of detailed notes from the Daily Journal Corporation Annual Meeting (held September 10th, 2014) and led by Chairman Charlie Munger

While not a transcript of the event, it's the closest thing you're going to find.

Still curious? See the entire collection of notes.

Daily Journal Meeting Notes

2013-02-21T14:37:00.002-08:00

I have 29 pages of detailed notes from the Daily Journal Corporation Annual Meeting (held Feb 6th, 2013) and led by Chairman Charlie Munger. While not a transcript of the event, it's the closest thing you're going to find.

A copy of these notes are available for a limited time for $20.

What you should know before you purchase a copy of the notes.

Some notes of the meeting are available online. If you want the gist of what happened, skip these and try Google.
These notes are for hard-core Munger fanatics who couldn't make it to the meeting but want the next best thing.
~14,500 words
I've made the price point something that everyone can afford.
By purchasing a copy you agree not to share it or post it on the web.
I will send you an email with your personal copy within 24 hours of receiving your order.
This is intended solely for the entertainment of the reader and the author. These are a best-effort to capture the actual meeting but should not be relied upon for making any decisions.

Transcript: A Conversation with Charlie Munger 2008 DuBridge lecture at Caltech

2012-12-27T12:00:00.000-08:00

I've transcribed the 2008 Charlie Munger DuBridge lecture at Caltech.

For those of you who've seen it, this is vintage Charlie during the peak of the financial crisis.

A copy of the transcript is available for $40.

What you should know before you purchase a copy of the transcript.

The lecture is available in video format for free.
No refunds
The transcript is about 13,000 words (or about 27 single spaced pages).

I'm sure it has a few mistakes.

By purchasing a copy you agree not to share it or post it on the web.

The PDF does not allow copying-and-pasting and contains a light, personalized, watermark.

I will send you an email with your personal copy within 24-72 hours of receiving your order.
The content of the transcript is intended solely for the entertainment of the reader.

Still curious? Check out all of the Munger files.

Warren and Charlie and the chocolate factory

2012-08-22T18:42:00.000-07:00

Charlie and I went to his dining room, where, with my recorder on, we began talking immediately about See's Candies, the brand he convinced Buffett to buy in 1972 for $25 million. The first thing immediately apparent about Munger is that in business and beyond, he knows everyone and remembers everything. At each turn he is able to recall specific and obscure anecdotes about buyouts and bankruptcies that relate in some way to the subject at hand. He talked about when Hershey's (HSY) first tried to expand into Canada. He waxed about Kodak ("People think the whole thing failed, but they forget that Kodak didn't really go broke, because Eastman Chemical did survive as a prosperous company and they spun that off") and about P&G ("Procter & Gamble, they just make a fortune on some of the body products. Some of these brands, I mean, if you can make something that actually improves the skin, wow. That's the last thing people will give up"). He may not possess the obvious, gleeful sense of humor of Buffett, but Munger has the ability to make you laugh even as he's discussing something completely dry and practical.

As the same man who had led me into the house served up breakfast (scrambled eggs, home fries, and delicious bacon), Munger talked about the strengths of See's over the years. In his estimation, it has made all the right decisions, both before Berkshire got there and since. "There are a lot of boxed chocolate companies; it's an old human desire," he said. "People like those little pieces." But See's worked hard, he said, to prevent cannibalizing its own stores, and has always had a cautious nature that helped it succeed in the long run. "And of course," he added, "We haven't basically touched it at all." He pointed out the significance of See's as a gift item. "Who wants to give a gift that announces 'I'm a cheap ... ' You know."

Charlie Munger’s Wesco Letters 1983 – 2009

2012-08-03T19:04:00.001-07:00

Charlie Munger’s Wesco Letters 1983 – 2009

Wesco Charlie Munger Letters 1983 2009 (PDF) Source

Munger, Gates, and Buffett on Fox

2012-05-10T18:34:00.001-07:00

These are 4 of 9 videos - you can find the videos without Charlie here.

Munger Interview on CNN

2012-05-08T04:02:00.002-07:00

Charlie Munger interview with CNN:

Berkshire's Charlie Munger Speaks

2012-05-04T14:39:00.002-07:00

Vice-chairman of Berkshire Hathaway Corporation Charlie Munger talks to CNBC's Becky Quick about the consistency of Berkshire, Warren Buffett's health, the company's succession plan and his feelings on the future of the company.

Munger on EVA

2012-03-04T12:18:00.002-08:00

"Well, EVA, of course, is very popular because at least it talks about how you get a high return on capital and points out that shareholders are enormously benefited if you manage to get a high return on capital and if you can reinvest at that high return for a very long time. But if you stated it the way I’ve just stated it, you couldn’t sell any books. So you have to dress up the elementary idea with a lot of twaddle, copyright the twaddle and sell it to various people at high prices per hour – making it worse by introducing fuzzy concepts that don’t really work, like a cost of capital concept that makes no true economic sense."
— Charlie Munger

If anyone has a source for this quote please let me know.

Charlie Munger Recommends These Books

2011-12-26T11:10:00.001-08:00

Over 40 book recommendations by Charlie Munger.

A Conversation with Charlie Munger @ U Michigan 2010 (Transcript)

2011-12-11T09:54:00.001-08:00

In 2010 Charlie Munger and Becky Quick had a 2 hour conversation at the University of Michigan. While the video was great (and freely available online), I wanted a transcript. There is something about reading that I like better than watching and didn't want to risk anyone deleting the video online and having 2 hours of classic Charlie lost forever.

Don't miss out and purchase a copy today for $40

What you should know:

The transcript is 16,165 words.
There are a few places that were indecipherable.
As with other transcripts I've done, I've made the price really low so that everyone can afford a copy. By purchasing a copy you agree not to share it.
The PDF does not allow copying-and-pasting and contains a light watermark.
I'll send you an email with your personal PDF copy within 24 hours.
The content of the transcript is intended solely for the entertainment of the reader.

Still Curious? I also have notes from 2013, 2014, a Wecso Meeting and more.

Video: Munger Says Euro Leaders Behind the Curve on Crisis

2011-10-24T15:13:00.001-07:00

(Unofficial) Transcript of The Morning With Charlie

2011-07-11T17:32:00.001-07:00

If you're looking for a complete (unofficial) transcript of the morning with Charlie look no further—I've (painstakingly) transcribed 21,296 words—that's 45 pages!

However before you shell out $30 for a transcript, I think most your hunger will be quenched by the free notes that Ben Claremon put together and Munger's Parody. If, however, you're a die hard Munger fan that couldn't make the meeting and need to know every last Mungerism, this is for you.

What you should know:

There are a few places that were inaudible. I've also done some light editing, and, for my sanity, I removed the long preambles to questions where questioners praised Charlie or whatnot.
The PDF does not allow copying and pasting and contains a light watermark.

How could I do this? Simple. I asked. The morning with Charlie was not a "Wesco" meeting, and according to the event staff—and all material provided—there were no restrictions on recording the meeting.

Still interested? Purchase the transcript for $30 and I'll send a PDF copy to the email address provided within 24 hours.

Disclaimer
The content of the transcript is intended solely for the entertainment of the reader. I've never transcribed anything in my life so odds are, mistakes were made. In no way should anything in the transcript be relied upon in making any decisions.

Furthermore, by purchasing a copy of the transcript you also agree that you will not post it on the internet or otherwise distribute.

Munger's Parody

2011-07-01T18:38:00.001-07:00

Handed out at today's Meeting.

munger

Another Munger Interview, this time with Bloomberg

2011-05-10T17:12:00.001-07:00

Munger CNN interview with Poppy

2011-05-09T14:43:00.002-07:00

Downsize the Banking Sector

Munger CNN Interview with Poppy p1

2011-05-09T14:43:00.000-07:00

The last person in the united states i want to be president is Donald Trump. ... He's stark raving mad.

Munger Interview with Becky Quick

2011-05-09T09:19:00.000-07:00

Charlie Comments on Sokol and more.

Munger defends Sokol share deal (Financial Times)

2011-04-06T16:22:00.000-07:00

Charles Munger, the long-standing business partner to Warren Buffett, has defended David Sokol even as the former senior Berkshire Hathaway executive remains under fire for buying shares in a chemicals company less than two months before its sale to Mr Buffett.

The scrutiny now facing Mr Sokol “was inevitable, because of the optics of the situation”, Mr Munger told the Financial Times. “I don’t think he was trying to do anything immoral or take advantage of anyone. It was just a glitch.”

...

“Years ago my children through the Li Lu fund bought into BYD and years later Berkshire bought some BYD,” he said. “And Dave went on the board. I stayed out of it.”

Mr Munger conceded Mr Sokol’s Lubrizol trades were similar to his family’s BYD investment “in one sense”, in that Berkshire ended up buying stakes in both companies.

“I don’t want to criticise his comparisons,” Mr Munger said. “Even now he says he would do it slightly differently had he had to do it all over again.”

Source: FT

Munger Says He Told Buffett of BYD Stake, Stayed Out of Berkshire's Talks

2011-04-05T17:03:00.000-07:00

“I certainly suggested that Berkshire look at investing in something that the Mungers were already invested in, but we’d been in it for years,” he said today in a telephone interview.

...

“I had Dave look at it, because I knew I couldn’t talk Warren into buying into the damn thing by myself,” Munger said. “It’s a new technology-type investment. But David went over there, and he made the deal for Berkshire.” Buffett is Berkshire’s chairman and chief executive officer.

...

Munger said his family holds a “little more” than half of the fund with the BYD investment, and that he didn’t participate in Berkshire’s discussions on its deal.

“I recused myself,” Munger said. “But there’s no question about it, that I caused Dave’s original interest.” He declined to comment further.

Source

2010 DJCO Meeting

2011-02-04T07:02:00.001-08:00

(thanks HB)

Question #1 got right to the point - what will happen to the Wesco meetings now that WSC has been fully absorbed by Berkshire? In honor of the "hard core groupies" Munger said that he would continue to hold the Wesco meeting and that he would probably "pay for it out of my own pocket." He further added that this would probably be for 1-2 more years.

- On ratings agencies, "They have disgraced themselves," They made easy decisions to enrich themselves, Law schools and business schools taught the wrong stuff and it became accepted dogma, It was CRAZY to rate all of those things AAA. But - as bad as it is, it's hard to develop a better system, It worked for 130 years and all things have a lifespan, How else would you do it? All human systems are gamed, Do you want the (govt controlled) SEC to make the ratings? Everybody failed, "Most of what I'm talking about is not going to be fixed." He mentioned that last evening he ate dinner with Chief Justice Kennedy and that there was concern that there is deep resentment across society that the elites haven't paid a price for all of the wrongs... told quip about King Lear.

- A guy pestered him about his dog-eared page. Munger said that he grew up with the tables and that they haven't changed. The guy persisted - what's the number? 10? 12? Munger shot back that "I want to know the present value of something so I use my table - it's just not complicated. A lot of people DO use complicated stuff - they're the ones who got us into trouble."

- A question about "unlearning" a good idea. Munger said that learning gets harder and harder. Unlearning likewise so. China is good to learn. Munger didn't appreciate the potential, "I've learned a lot there." Munger underestimated the rate at which technology could be assimilated into the society.

- It's hard to get a man to believe X when his living comes from believing in Y.

- Too much dumb bureaucracy, Hard to have a smart one,

- "It's why I'm a Republican, I can not STAND the way they go crazy."

- On housing. "When you get into trouble on a $1000 a month mortgage then Grandma and family can help out. When the mortgage is sizeable then Grandma can't help - you're on your own."

- inflation. When asked what he thought the rate would be Munger started talking about agriculture. He related how significant percentages of good farmland is now being used to fill our gas tanks, Ethanol is "Stunningly stupid" yet all politicans run to Iowa and tell them what they want to hear. "We're exporting misery."

ed note - obviously he's talking about all the diverted land resources which shrink the food supply and cause massive inflation across food commodities (note - for a first hand example of social upheaval caused in part by massive food inflation see all after "Egypt")

As for govt and printing money and debasing the currency? Inflation is "The glorious hand of government."

ed note 2 - I was quite taken aback by Munger's grasp of the commodities sector. He immediately knew that it was Brazil where a certain iron is produced. He knew the differences between coal types and their different industrial charactistics and where they're mined and how expensive it is to mine each type and to transport each and the size to which it has to be crushed in order to ship it safely (not too small lest it explode in a black misty cloud of coal dust which I saw first hand as a small boy in our coal fireplace. He asked Pabrai a few commodities questions.

- It's unbelievable but Posco went to India and proposed building a plant, PKX has a unique method to make steel from lesser quality that would be perfect for India. It's now 6 years later and they are still working on the permit. Unbelievably stupid. "I'd rather invest where we don't have these problems."

- Everybody in a financial institution trading operation will go plum
crazy. An irresponsible system. They want to do it to match others' earnings.

- A man will believe what he wants to believe.

- They specialize in stupid things at Law School

- Question stating that in years past management earned 40-1 more than the working class. Today it's 1100-1 (ed. I hope I'm right about that figure). Munger refers to Aristotle - we're asking for a lot of problems.

- General Re - just got sloppy. Cleaning that up was a hell of a lot of difficult work. We just missed it. It had such a good reputation and had been going for a long time. Over time you can get a lot of deterioration in a culture. Costco has great culture - makes it hard for people to game the system. At least in the end we did fix GRN.

- A man running a small business knew Wal Mart was coming. He sold out prior to their arrival. Very smart. He knew the landscape and reality.

ed. note - OK BYD nuts. Recall bYD's problems with their plant not having proper permissions and they got into trouble with Chinese govt. Recall how this was a sure sign that doing business in China would creat problems for BYD over time.

- On BYD - The province gave BYD the right to build and the province did not gain requisite approval from federal government. ByD and the province got fined. ByD about $400K (or peanuts if you're counting at home). "My guess is that permission will be granted later this year." BYD is a Chinese hero. Head of BYD is a former peasant - a communist hero.

- California. Thinks Jerry Brown is the best governor option. If bad news is to be delivered it's better that a Democrat do the deed in California. It adds more credibility that way and is easier for the liberal CA public to swallow..

- Talked of immoral insanity of police pensions where a retiring guy can put in 1500 overtime hours in his last year and spike his last takehome pay which then gives him huge retirement check and where he can earn more in retirement than his last salary - "Insane."

- Singapore is the best govt ever. They came from nowhere. They built on swamp a great civilization. It's an example of a govt that does things right.

- Roughlyright pointed out that Daily Journal portfolio perfectly matched Wells Fargo and that therefore now we know that munger must have bought Wells with the entire portfolio. Munger said that that was mostly right - they have a little that's not WFC. When asked why the DJ purchased it a a much better price than say Wesco Munger said that it was all accidental - a circumstance of reality - that the DJ needed to hold cash longer to ensure survival of the business and they got lucky on timing.

- People don't realize how close the system came to implosion. GE would have gone bust without government. Govt HAD to save GE. (ed. note - I took this to mean that it's because it's an American icon that is a core part of our society, Not becaue it was systemic risk caused by GE).

- "We don't CARE if we are a digit less in 20 years, If we used leverage like Murdoch Berkshire could own the world. We don't sweat blood like Murdoch either. We sleep well. Murdoch really had to sweat."

-A mistake to let Lehman go under? "Gotta let someone go. Lehman at the top had a disgusting culture. I would have picked Lehman to go under." (ed note - is that funny or what!)

- This was as close to chaos as we want to come - the idea that we want massive chaos in order to profit is wrong.

- We LOVE the railroad business. This from two kids who had model trains.

- Passanger trains. "Obama is out of his mind." makes sense for China but not for us. It would take a whole new track system. Exceptionally stupid. Obama hasn't had a lot of business training.

- "We love our railroad." There are now 80% fewer employees and it's safer, more efficient, profitable - a very efficient place.

- never in my life have I seen more young, rich, smart people holding so much cash - like we do at the Daily Journal. It's wise. Bill Gross's "new normal" is modest lower returns. in a period of modest returns it shouldn't make any difference. Why SHOULD life be easy? People destroy themselves in good times too.

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Munger: Low Opinion of Forecasts

2010-08-13T19:36:00.000-07:00

...
With enough cushion from his investments, Burkle didn't have to get a full-time job. He put together a plan to buy Kroger's Southern California Market Basket chain, which was dealing with unfunded pension liabilities. When he returned to Munger, lugging three notebooks with five-year plans to justify the deal, Munger was uninterested in Burkle's work.

``He said, `What are these for?''' Burkle recalls. ``He said, `Manage to the opportunity, not to the plan.'''

`Low Opinion of Forecasts'

Munger confirms the story. ``I have a low opinion of forecasts made in investment banking projections, so I don't generally read them,'' he says. ``If I tossed them aside, that would be typical.'' Munger declines to comment otherwise on Burkle's career. ``I know what I read in the paper,'' he says.

Source

Charlie Munger on how he'd make Volckler look like a sissy

2010-05-12T17:01:00.000-07:00

Munger was interviewed by Robert Lenzner of Forbes.

On Berkshire Hathaway
"Smart people can sense when the market price is a little ahead of itself and when it's a little behind. I sold 2,000 shares to my children at $70,000 a share. Having a market price that is split 50-to-1 and being in the S&P 500 index we can easily handle selling 1% of the shares every year (for Buffett's gifts to the Gates Foundation). Ben Graham (legendary investment guru) said if it's a good investment it's likely to be a good speculation. We're going into a sound proposition on the expectation it will last for our lifetime. We have a lot of smart people at Berkshire. We have extreme centralization at headquarters where a single person (Buffett) makes all the capital allocation decisions, and we have decentralization among our operations without a big bureaucracy. That's the Berkshire Hathaway model."

Charlie and Warren
"We find the same things humorous. That's why we get along so well. It's hard to tell who is wittier. My humor is Jewish humor. Maybe I'm part Jewish."

"How would you make Paul Volcker look like a sissy if you regulated Wall Street?"
I would economically restrain what investment banks and banks do more than he would. I would separate derivatives from the basic bridges of civilization. We don't want civilization contaminated by extreme speculation. I'd ban all the derivatives trading except for metals and commodities. The new stuff is a marvelous gambling game. It swamps any commercial transactions that are needed. Gambling does not become wonderful just because it pertains to commerce. It's a casino. You shouldn't be able to use $500,000 to do a $5 million trade.

"If I were the Lee Kwan Yew (formidable former Singapore leader) I'd make finance far less attractive to go into. I'd raise taxes, maybe put a Tobin (Yale economist) tax on all transactions. If Warren was the benevolent despot of the U.S., these things (derivatives) would have never existed. Warren wrote a letter in 1982 objecting to the creation of the S&P 500 derivative contract. Its message: This is going to do more harm than good. He tried to prevent it from happening. I think he believes civilization would be better if they didn't exist. Still, Warren has great difficulty not buying a mispriced item in the financial market. We bought derivatives even though we didn't believe in their existence.

On Wall Street
"Wall Street has too much wealth and political power. The system is dysfunctional for our country. There's more honor in investment management than in investment banking. I'm terribly conflicted. I hate it that bright young people are going into finance when all the Chinese are going into engineering. If we don't make substantial changes in the system we'll have another big mess."

On Human Nature
"I'm used to people with very high IQs knowing how to recognize reality, but there's a huge human tendency where it may be instructive to think that whatever you're doing to succeed is all right. These people say to themselves: I need it and I want it, therefore I must have it. I come from a culture that sees reality better. Lehman under Dick Fuld was pathological, operating like a boiler room. It reminds me of a quote from the Mikado: 'I have a little list of those who will not be missed.'"

On the acquisition of Chinese electric car maker BYD and Iscar, an Israeli machine tool manufacturer.
"BYD and Iscar are the first two technology companies ever acquired by Berkshire and a break with the past. I enlisted the help of Dave Sokol (chairman of MidAmerican Energy, a subsidiary of Berkshire and favorite to succeed Buffett as CEO) to convince Warren it was a good investment. (Berkshire owns 10%, the limit for a foreign interest. BYD is trying to solve the engineering and production problems useful to civilization. BYD has 16,000 engineers and its founder, Wang Chuanfu (the wealthiest Chinese entrepreneur with $5.1 billion in BYD shares) is behaving like the Thomas Edison of today.

On Himself
"I went where there was dumb competition (investment management). We do so well in spite of being so stupid. That's why there's hope for you!"

Source