Everybodys got a different situation. Take Gerry. One of the interesting things about the Daily Journal is that we made all that money in the foreclosure boom. Charlie Munger: Im a great admirer of Jeff Bezos whom I consider one of the smartest businessmen who ever lived. Question: The Federal Reserve appears to be supporting asset prices. Gerry, being a sound thinker, you know, did the very unpleasant work of shrinking it appropriately without bothering me or Rick. I came to law school having learned the method of learning and nothing has served me better in my long life than continuous learning. We were together in that for a long, long time, and then Rick and I did the Daily Journal together on another occasion. I wouldnt change my life all that well. Give me a new question. Practically everybody does that. Latest statistics and disclosures from Daily Journal Corp's latest quarterly 13F-HR filing: Top 5 stock holdings are BAC , WFC , BABA , USB , and represent And what he does is he sells about half of them always. My guess is we have suffered some editorial quality. I think some of these things are very difficult and I think, by and large, its a mistake to hire investment managementto hire armies of people to make conclusions. Youd say that everybody does that in their education but I dont think everybody does. Well, I dont think the quality of publishing public notice advertising has gone down. Julia La Roche - Amazon Web Services Charlie Munger: Ladies and gentlemen, wherever you are, via Yahoo finances website. No one knows for sure just how much government intervention is wise and at what point the government should stop intervening. For example, Coca-Cola in the past. And would the Daily Journal consider Bitcoin or any other cryptocurrency as an asset on the balance sheet similar to what Tesla recently did? That word focuses Bezos and focuses the people that look to him for guidance. Question: Does management, in your opinion, have a moral responsibility to have their shares trade as close to fair value as possible? Inside Daily Journal Corp's 10-K Annual Report: Financial - Expense Highlight. And I dont think youll find me engaged in the massive rezonings in the future. Part of the reason for that was cultural. Any tips on how to generate insight in these types of situations? Commission-free trading is not free. Rick was part of the group which consisted of Warren Buffett, Rick Guerin, and Charlie Munger that bought control of Blue Chip Stamps when it was widely distributed in an anti-trust settlement. Hell be able to do it. In a shareholder letter, Barra said 2023 will be a "breakout year" for GM's Ultium-based EVs. But I do admire what the Chinese have done. He was very amiable the way he talked about it. 2021 Its been amazing that one little company starting up not that many decades ago could become as big as Costco did as fast as Costco did. If anybody can fix it, he can. That way, whatever happens, he feels smart. By the way, the Harvard Business School, when it started out way early, they started out with a history of the business. The meeting will come to order. God knows it was difficult but I dont think its a mistake. And thats what we have going in the stock market in a frenzy thats fed by people who are getting commissions and other revenues out of this new bunch of gamblers. We are very excited to look forward to enabling the courts to function as we know that they want to and will in the future. If the seas were to rise 60 feet, which could happen in another 100 years or so, wed have to build enormous barriers to sea entry. x\o6 >j.bY|UI\$nj'-Bdfv~QG#y9>}wU~;|=,a>?&UVDWUr{{&?:B%\DIzRYI'gYY]1$9|4JYf%rUe4.L_.J8h`?8([^RWQ/H?e}^6.bw{s On the other hand, we have a fair amount of time to do it. However, could you be more specific? Charlie Munger: I would go further. It reminds me of the key phrase and Bunyans Pilgrims Progress in which he says: My sword I leave to him who can wear it. If you dont have master the rest of the knowledge you cant synthesize it with psychology. Youve even said business schools that dont adopt this method are doing their students a disservice. That was a big error in judgment. Stocks: Real-time U.S. stock quotes reflect trades reported through Nasdaq only; comprehensive quotes and volume reflect trading in all markets and are delayed at least 15 minutes. And in biology, what happens is the individuals all die, and eventually, so do all the species. I think that the methods that Ive used including the checklists are the correct methods and Im grateful that I found them as early as I did and that the methods have worked as well as they have. 2021 Letter to Shareholders. A lot of things are going to change. I expect less out of bankers than he does. I think that that will probably continue. Question: It is estimated that the Gates Foundation has saved well over 100 million lives. Question: It seems likely that the current Fed policy of keeping interest rates near zero will only exacerbate the income disparity in this country by benefiting those who own the financial assets. How can you not? When it gets difficult, I dont think theres any automatic fix for difficulty. No, I dont have any secrets. Some people think that value investing is you chase companies that have a lot of cash and theyre in a lousy business or something. Theyve served us well over the years. Its a very dishonorable low-grade way to talk. Accounting is also in the cloud. It wasnt some malevolence of the rich that caused it. Youll remember that when the first big bubble came, which was the South Sea bubble in England back in the 1700s, it created such havoc eventually when it blew up that England didnt allow hardly any public trading and securities of any companies for decades thereafter. The letter is 1,617 words. Just time after time he would do something like that. And it was probably wise that we acted exactly as we did. On December 18, 2020the record datethere were 1,380,746 shares of common stock of the company outstanding. I dont think we have any great gift at making macroeconomic predictions. And I think, by and large, we made the most practical decisions that were available to us. We are subject to the orders and directions of those counties which, before, really didnt impact anything. Dear shareholders: Over the past 25 years at Amazon, Ive had the What are the main sources of ancillary revenue expected once the products have gone live and how meaningful will the products like eFile-it, ePay-it, cloud hosting services, and others become? In 1978, the year Deng Xiaoping took over, it was 300. Gerry and I have been together, how many years Gerry? Charlie Munger: Its partly culture but a lot of it is just born in and its a quirk. Question: Youve said several times that the best way to learn about business is to study the multi-decade financial results of great companies. What, for example, would you recommend as course materials? I find it much easier to find four or five investments where I have a pretty reasonable chance of being right that theyre way above average. April 15, 2021 Dear Partner: The Greenlight Capital funds (the Partnerships) returned -0.1%1 in the first quarter of 2021 compared to 6.2% for the S&P 500 index. What Jamie Dimon sees in JPMorgan, Wall Street future of work Do you think the Daily Journal would have hundreds of millions of marketable securities now if Gerry didnt know how to learn something new? I do think that Im way less afraid of inequality than most people who are bleeding about it. Remember the Dot Com boom when every little building in Silicon Valley ran into a huge price and a few months later about a third of them were vacant. They had to because the traditional business newspaper business is shrinking. Fundamental company data and analyst estimates provided by FactSet. One thing I can promise is that I wont contribute much to it because I dont understand it. But he previously worked for Rick Guerin and me in running a little mutual fund that we bought control of. But, I hardly think the editorial quality could go way up when employees were going down. What could investors do to cope better with periodical frenzy? What happened is that BYD is very well positioned for the transfer of Chinese automobile production from gasoline-driven cars to electricity-driven cars. % I dont think well change on that. Always intelligent. He lived in a particular town. Charlie Munger: Well, I never owned a share of General Electric because I didnt like the culture. But you know, most people dont do that. I think that shareholders should be more sensible and not crowd into stocks and buy them just because theyre going up and they like to gamble. Im not trying to move mountains. Question: Of the various types of moats and competitive advantages, which types do you think will be most important in the years ahead, and what combinations of competitive advantages can you imagine will create any new types of moats? As we can see from the deteriorating U.S. relationship with China, the Western world does not understand China. And, what about passive investing? WebDaily Journal. Question: Given all of your donations to physics, what is your favorite way of applying physics to societys problems and also to investing? And if you stop to think about it, that is also true at the Daily Journal. Question: You have revised your famous talk on the standard causes of human misjudgment with considerable new material back in 2005. Charlie Munger: I dont know anything about Haven. Charlie Munger: No, I would say that of course, theres some new material in misjudgment. endobj He said it was the pursuit of the uneatable by the unspeakable. Question: I was wondering if you could share some thoughts on Haven, particularly why it was ultimately closed. Interpretations of those facts will vary. I would imagine that applies to the broad market too. Questions: Why are some people incapable of learning new ideas and behaviors? So, I dont mind a little inequality and what I notice is that the rich families generally lose their power and wealthand pretty fast. But they dont teach that in the psychology department because the academic system rewards little experiments that develop more insight into psychological tendencies instead of synthesizing whats already been discovered with the rest of knowledge. Charlie Munger: Its very hard to have a shrinking business. We miss Rick terribly. We always want to get the facts right. And if you believe Jeff Bezos is one of the best businessmen you have ever known, would you consider investing early in any of the new projects he will inevitably focus his attention on now that he will not have to be as concerned about the day to day responsibilities of Amazon? DAILY JOURNAL CORPORATION Charlie Munger: Well, I do have a tip. Theyre no longer using peasant girls to beat the brains out of our little shoe companies in America. stream So you now know what I do in charitable institutions. I think when difficulty comes, I expect to have my share. We bought all these buildings cheaply. That approach will never go out of style. Question: Mr. Munger is a champion of Chinese stocks. How would you advise these institutions to manage their endowments over the coming decades? I am more willing to hold stocks at high multiples than I would be if interest rates were a lot lower. Thats what the communists are doing. By rejecting non-essential cookies, Reddit may still use certain cookies to ensure the proper functionality of our platform. I own some apartment houses, so I like that investment, provided youve got a perfect management which is hard to get. Also, fortunately before the pandemic, we got out of the conference-type events and we were not subjected to the problems of no conferences nobody to attend. Charlie Munger: Well, I dont think I know exactly what the future of banking is and I dont think I know how the payment system will evolve. The psychology professors dont know all that much about the rest of knowledge and they have no incentive to master it. Nobody should believe that Robinhoods trades are free. Its difficult to break into the legal advertising system which supports so many newspapers, not only in California but elsewhere. Generally speaking, people assume that were a normal software company like Microsoft or something. Theyre in a place thats gotten more valuable. He was a one party system but he could always be removed by the electorate. Everybody has shortcuts to screen out certain hazards. If its not good enough for Berkshire, shouldnt we have the same standards? The case, filed in February, challenges a plan to convert APEs, AMCs preferred shares, into common stock. As a matter of fact, what happens is to make a nation rich, you need a free market system. Charlie Munger: Well, I dont know how well the economys doing to work in the future. International stock quotes are delayed as per exchange requirements. The number of people who ever got a chance to do it again is zero. We would all say that. So its a very theoretical discussion. Question: You and Warren have been adept at quickly sizing people up, particularly business leaders and potential business partners. 2021 Given the developments over the past year, could you give us an update on your assessment of wretched excess in the system? But I do think having a whole system to sell hydrogen is difficult. The JTI software has been configured for other judicial and justice agencies, including district attorneys, prosecutors, public defenders, probation, etc. How concerned is he about Chinese government interference as seen recently with Ant Financial, Alibaba, and Mr. Jack Ma. Youre right. Key Points. Ive been pretty quiet. And, we hope to do well in it. When you get into these hard questions, theres a lot of very intelligent honorable people who reach opposite conclusions. You once said to study the life and work of Lee Kuan Yew. and our Today, it hovers around 9500. But Im flabbergasted at how well theyre doing. We do know one thing and that is that the courts of the whole world are going to be taken into the modern age. :qpt1cMt8\2&avSY9-;S6 |jw&.\ "P/cdx>5[_:Vt _;hgf1!||tx8Oz}Y=eHcu65gl-T >Tkbb,OxW]Y?W8p`? LimT;IZ}La`9tFG;hB*4bI*Kt,U7e~kEVzVTmT$k*(4>uBXrW0L-MYz g\uz:~F ],ZgKUVyaq5muCWc*uNSS1e/~;$wqNw;jJkyVG*"ns*~e15{f +%>\o-^^U]UpJW',/ It was a background that helped everybody. Some people have a natural trend toward good judgment, and with other people, their life is just a series of mistakes over and over again. Bitcoin reminds me of what Oscar Wilde said about fox hunting. Classified advertising is down significantly. Other. Everything you see is profit. Question: Do you think value investing is still relevant in a GDP-decreasing world? The most important decision in life to benefit those who are single, perhaps including some of your grandchildren and great-grandchildren. Lane Hickenbottom/Reuters Warren Buffett's longtime business partner called out a Bill Gates has written a book on this subject recently in which he concludes that it would be expensive but it could be handled. Has there been anything that has surprised you, and what would be your best advice to someone starting a business now? So I dont worry that the country is being ruined by a few people over getting ahead a little faster than the rest of us. Have you considered amending this quote or lowering your standards? Do you think this is a worthwhile policy objective given the effect it has on creating financial excesses and income inequality? We dont have any other secrets, do we Jerry? stream It was totally required. Below is the Report's Letter to Shareholders from GE Chairman and CEO Larry Culp: Dear Fellow Shareholder, 2021 was a year of historic change for GE. Charlie Munger: Early 70s. We love it anyway. % Because if you do that, Im a moral leper. I never buy any and neither does Daily Journal. Beyond restaurants, consumers showed a growing interest in many of the newer categories on our Marketplace in 2021. Munger's terse letter to Daily Journal shareholders. 2 0 obj At the age of 97, Charlie Munger wasnot surprisinglysharp as a tack. 2023 Junto Investments, all rights reserved. I knew a man once, Henry Singleton, who was not a chess champion. Charlie Munger: Well, I so rarely hold a company like BYD that goes to a nosebleed price that I dont think Ive got a system yet. 2022 Daily Journal Corporation Mungers Letter to But the Chinese have proved that you dont need free speech to have a wonderful economy. See our Terms, Privacy Policy, and Disclaimer. Charlie Munger: Well no, I dont think we have a bubble in Treasury securities. I think all of this activity is regrettable. DAILY JOURNAL CORPORATION : Shareholders Board A rich civilization can afford to do it if we absolutely have to. As a matter of fact, it will be here for a long, long time if we stop using many hydrocarbons in transportation. But theres no rule that life has to be easy on the mental side. What were the lessons learned? Charlie Munger: Its quite importantpart of the success of a company like Costco. Web2021. The first rule of a happy life is low expectations. Questions: Many observers see market behavior that reminds them of the Dot Com bubble: wild speculation, endless SPACs, and IPOs soaring on their first day of trading. And there arent many people that can do that. Gerry has done magnificently well. One is a big interest in Li Lus China fund, which is a limited partnership, and the other is a Vanguard index fund. And when the evidence came in that the system wasnt working very well because some of the employees were cheating some of the customers, they came down hard on the customers instead of changing the system. Costco I do think has one thing that Amazon does not. They really need the world to stay the way it is. Without the method of learning, youre like a one-legged man in an ass-kicking contest. Where does it appear most egregious? And so, we cant promise were going to succeed. I have a very simple idea on the subject. WebIn 2021, for example, we paid$3.3 billion while the U.S. Treasury reported total corporate income-tax receipts of $402 billion.Additionally, Berkshire pays substantial state and foreign taxes. Thats true whether youre Benjamin Franklin or Joe klutz. Charlie Munger: 2022 Daily Journal Annual Meeting Transcript, Charlie Munger: 2020 Daily Journal Annual Meeting Transcript. Share Charlie Munger, a shareholder and board member for The Daily Journal, is set to speak at the newspapers virtual annual meeting Wednesday. We discuss the company Berkshire Hathaway and the economic context in which it operates. And if you cant do that, youre not gonna win the great chess championships of the world and youre not gonna do as well in business as Henry Singleton did. However, is there a price too high that the companys future profits simply cannot justify? Source: FactSet. What do you make of these two pricings? He was a very smart man. The only opinion I have there is that I dont think anybody knows whats going to happen for sure. Furthermore, hed gone through the Great Depression. When people gave me a good idea and I could see it was a good idea, I quickly mastered it and started using it for the rest of my life. I dont define that as value investing. Charlie Munger: Well, I think all stocks can fluctuate. Nothing is particularly obvious for everybody to do the same thing. There are these periods in capitalism. Charlie Munger: Well, we dont really know where its all going. Im pretty easy on myself these days. We cant promise what the outcome will be but we are trying pretty hard and we get some favorable impressions of progress. That recognized reality and worked way better than what other people were doing. They just copied Adam Smith and left out the free speech and it worked fine for them. Charlie Munger: Well, thats a very good question. Charlie Munger: Theres one thing that were quite passionate about and that is serving the customers who have trusted us. Charlie Munger: Well, the business around here that has the most promise is our software business automating the courts. Charlie Munger: I think any rich nation ought to have a social safety net that expands a little with its wealth. Can you speak to the causes, the trend, and make some predictions? When these people go, there is none replacing them. No, I dont think I have anything to contribute. Question: How do you control your investments in a world where reasonable companies with a good image like General Electric sink rapidly into the bottomland of the stock market. Daily Active Users (DAUs) totaled 53.3 million in June 2022, year versus 3.571 billion hours in May, up 10% over May 2021. So far the evidence would be that maybe the monetary modern monetary theory is right. Always on point. And its rather interesting. Any tips for someone who wants to work on and improve their ability to hold two opposing views at the same time? I think the oil and gas industry will be here for a long, long time. We made the rich richer, not as a deliberate choice, but because it was an accidental byproduct of trying to save the whole civilization. Daily Journal I think the Chinese have behaved very shrewdly in managing their economy and theyve gotten better results than we have in managing our economy. And, I was always aware of that and so Ive accepted these damned annual meetings. And what are the implications, since Treasury assets underpin the value of every other asset? Question: Its been a year since the coronavirus pandemic came to the U.S. What have you all learned about running a business in the past year? So, I think you can count on the fact that what were doing is going to be a big growing field. Its such a simple idea. If you do that all the time; if youre looking for disconfirming evidence and putting yourself on a grill, thats a good way to help remove ignorance. The death tax in China is zero. And I dont think that we or the Daily Journal is getting ahead because weve got some wonderful macroeconomic insight. Buffetts donations to the foundation have obviously helped to save many millions. Were all pretty forgiving of ourselves too which is probably a good thing. In 2010, that was down to 165 full-time employees and 15 part-time employees. Charlie Munger at the 2021 Daily Journal annual meeting spoke once again at great length. And were gonna play that as hard as we can. I recommend that other people follow my example. Question: Why is Berkshire Hathaway selling shares of Wells Fargo as quickly as one can and the Daily Journal has sold one share? Question: What are Mr. Mungers thoughts on the recent GameStop short squeeze by social media and the resulting implications on short selling in the future? We hope theyll continue doing magnificently well. The mantra he said over and over again is very simple. I think most people who are assuming tolerable success in life are about as happy as they were ordained to be. Question: Mr. Munger recently raised the alarm about the level of money printing taking place. Change value during other periods is calculated as the difference between the last trade and the most recent settle. Thats the reason he rose so fast in life. And, of course, its all worked. What do you think the long-term consequences will be? Question: You are one of the oldest and greatest thinkers of our time. So, its a very interesting competitive field. 2021 Shareholder Letter Charlie Munger: Well, of course, if a person is a chronic drunk, we avoid him. How do you reconcile the idea of paying 50 or 60 times revenue for a growing but unprofitable business with the more traditional value investing concept of a margin of safety? If a civilization can progress only when it invents the method of invention, you can only progress when you learn the method of learning. Question: Previously, you have said; It takes character to sit with all that cash and do nothing. Munger Question: Youve spent much of your life contributing your wisdom to schools and hospitals. Of course, that made him very leery of dumb loans. And that isnt necessarily right for its customers. Think of all the monopoly newspapers that used to be, in effect, part of the government of the United States. All those factors come into play and if you go back a little further, we eliminated California Lawyer magazine and we had one time a newspaper in Seattle and one in Denver. I prefer the United States. Culture is very important. They lose their money fast enough. But, of course, if we got a chance to do it again, we would do it better. Kipling once wrote a poem called The Women (The Ladies) and the concluding line was to the effect that you should learn about women from him instead of doing it yourself, because, he says, I know you wont follow my advice. I love connecting with other curious nerds so if you have a comment to my article or want to introduce yourself, shoot me an email. The second proposal is to ratify the appointment of our certified public accountant: Baker Tilly US, LLP. KWOT].AfOJQ=3U'(Jn6c3fBvvv[#"vsjQog:}CcS?t*Zh|gB;k1xER6fxE5fI6UVFs7v=ViHmg"qTELgJD(2*Q. If so, how do you think society should address it, especially because poor countries require much more cheap energy to reduce poverty? Jamie Dimon's Letter to Shareholders, Annual Report 2021 -, Daily Journal Corp : Submission of Matters to a Vote of Security Holders (form 8-K), Charlie Munger downplays risk of Taiwan invasion, says crypto fans are 'idiots', Transcript : Daily Journal Corporation - Shareholder/Analyst Call, Secretary & Executive Vice President-Publications. Its just that some people look for values in strong companies and some look for values in weak companies. Im not saying that oil and gas is going to be a wonderful business but I dont think its going away. On the other hand, it could be handled. DJCO | Daily Journal Corp. Financial Statements - WSJ Question: What have you done to live such a long life? Question: [The questioner] quotes a commencement address you gave in 2007 at USC Law School. That is true and makes sense. Because even as a boy, I knew a lot about who was sound who wasnt sound in Ohama. In December 2019, we had a peak of 10 million daily meeting participants, but by April 2020, we were averaging 300 million daily meeting participants 30x growth in about three months. All rights reserved. What else can you do? Thats interestingwho in the hell is voting against the accountants? And I applaud the result. This years annual report suggests that the traditional business has 97 full-time employees. I do think the present CEO is an extraordinarily able man and the directors made a very wise choice when they put him in charge. I think people have the theory that any intelligent hardworking person can get to be a great investor. But, I dont think Ive got a lot to contribute. And, of course, its going to create trouble as it did. I just see more and more of the rich people leaving. The former majority owners of Bank of Blue Valley and Morill & Janes Bank, Bob Regnier and Kurt Saylor respectively, both signed the shareholder letter. In his closely read annual letter to shareholders, Jamie Dimon says he expects no more than 10% of JPMorgan employees to permanently work from Sources: FactSet, Dow Jones, Stock Movers: Gainers, decliners and most actives market activity tables are a combination of NYSE, Nasdaq, NYSE American and NYSE Arca listings. He really knew everything you had to do to avoid credit losses in a small town in Illinois. Chinas economic record among the big nations is the best that ever existed in the history of the world. Who gets rich faster by class is going to vary over time and I dont think anybody should be too concerned by it. And its a shame that the economics textbooks dont emphasize how much a growing economy needs poverty in order to get out of poverty. And, of course, I think its vastly stupid for any state to be user-friendly to the rich people. So he was just a perfect banker if you wanted never to have any trouble. Warren Buffett's highly anticipated annual They wouldnt be a lot happier if they were richer or a lot less happy if theyd been poor. Data may be intentionally delayed pursuant to supplier requirements. You saw the ebb and flow of industry and the creative destruction of the economic changes and so on. I gave at the office is an unassailableassertion when made by Absolute insanity. GM raises its 2023 earnings outlook | Automotive News