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Watch Legendary Investor Charlie Munger's Final Interview With CNBC

CNBC・75 minutes read

Charlie Munger was a significant figure who modeled himself after Benjamin Franklin, with a legacy of wisdom and wit. Munger emphasized the importance of avoiding pitfalls in investments and continuously improving strategies for long-term success, while also discussing historical contexts and the vulnerability of successful companies.

Insights

  • Charlie Munger, Warren Buffett's partner, was a significant figure advocating against corporate excess, modeled after Benjamin Franklin, studying diverse subjects and leaving a legacy of wisdom.
  • Munger's exposure to various fields and historical contexts shaped his perspective on progress, with lessons from Kodak's bankruptcy and the importance of diversification in investing.
  • Buffett's emphasis on avoiding leverage, learning from mistakes, and focusing on long-term success through continuous improvement and seizing opportunities, despite concerns about global conflicts and challenges in public policy.

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Recent questions

  • Who was Charlie Munger?

    Warren Buffett's confidant and business partner.

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Summary

00:00

Charlie Munger: Buffett's Partner, Advocate Against Greed

  • Charlie Munger, known as Warren Buffett's confidant and business partner, was a significant figure in his own right, advocating against corporate excess and greed.
  • Munger modeled himself after Benjamin Franklin, studying diverse subjects like mathematics, physics, meteorology, and engineering before attending Harvard Law School.
  • Munger passed away at 99, just before his 100th birthday, leaving behind a legacy of wisdom and wit.
  • Munger discussed his early recognition of his above-average intellect and his tendency to challenge his teachers' ideas, like his Latin teacher's devotion to Sigmund Freud.
  • Lon Fuller, Munger's contract law teacher at Harvard, greatly influenced him and integrated law and economics in his teachings.
  • Munger admired Benjamin Franklin's self-education and diverse skills, except for musical ability, which he lacked.
  • Munger's academic journey began with mathematics at the University of Michigan, shifting to physics during World War II.
  • Munger's exposure to different fields and historical contexts, like the technical revolution and the British Empire's decline, shaped his perspective on progress and civilization.
  • Munger reflected on Eastman Kodak's bankruptcy, learning the vulnerability of even successful companies and the importance of diversification in investing.
  • Munger emphasized the difficulty of excelling in a single field to make money, drawing lessons from his father's friend, a leading urologist, and the medical profession's practices.

19:24

"Magicians, Depression, Investments: Secrets to Success"

  • Magicians have a code of secrecy regarding their tricks, using mirrors and bamboo slats to create illusions like turning women into animals.
  • During the Great Depression, the speaker's family faced financial struggles, with one uncle becoming Chief Architect for the FHA in Los Angeles.
  • The speaker's other uncle, a builder turned appraiser, faced financial hardships and personal tragedy during the Depression.
  • The importance of the plaster screed in preventing water damage in buildings was highlighted by the speaker's architect uncle.
  • The speaker witnessed the high child mortality rates in the past, with personal experiences of losing friends to illness and accidents.
  • The speaker's childhood experiences of playing marbles and learning to assess odds influenced his later investment strategies.
  • Ben Graham's investment philosophy of finding undervalued assets shifted as competition increased, leading to a focus on strong companies.
  • The speaker and Warren Buffett's success with Berkshire Hathaway was attributed to being less foolish than others and having a long investment horizon.
  • Despite expecting their cash reserves to decline, Berkshire Hathaway now holds nearly $160 billion, with potential for significant acquisitions.
  • The speaker emphasized the importance of avoiding pitfalls and continuously improving investment strategies over time for long-term success.

37:56

Buffet's Investment Insights and Success Stories

  • Warren Buffet discusses the need for a significant investment to utilize their cash reserves and potentially involve some borrowing.
  • Greg Abel, Ajit Jain, Ted Weschler, and Todd Combs are mentioned as potential decision-makers for future investments.
  • Buffet highlights the importance of focusing on top performers, akin to John Wooden's basketball strategy, to achieve success.
  • Buffet expresses skepticism about the future success of Venture Capital firms like Sequoia due to increased competition and challenges.
  • Buffet reflects on successful investments like BYD and Costco, emphasizing the role of luck and talent in investment success.
  • Buffet recounts the success of BYD, despite initial doubts, as an example of a successful investment due to the founder's genius and hard work.
  • Buffet discusses the early successes of Berkshire Hathaway, attributing the rapid growth to investments in Blue Chip Stamps, See's Candy, and other ventures.
  • Buffet shares his worst trade as buying Alibaba shares for the Bunger family, highlighting the importance of learning from mistakes in investing.
  • Buffet emphasizes the importance of avoiding leverage in investing and waiting for the right opportunities to maximize returns.
  • Buffet discusses the challenges faced by the younger generation in achieving traditional milestones like homeownership and financial stability, contrasting it with the opportunities in the tech industry.

57:36

Lessons from Grandparents: Seizing Opportunities and Success

  • The speaker recounts childhood experiences with grandparents, absorbing lessons from Sunday school and Robinson Crusoe.
  • One grandfather, deceased before the speaker's birth, was the richest man in town, inviting grandchildren to stay in his grand house.
  • The grandfather shared stories of his pioneer days, living in a sod house, emphasizing the hardships he overcame.
  • He advised his grandchildren on seizing opportunities, cautioning that such chances are rare and require certainty before leveraging.
  • The speaker reflects on missed opportunities in Berkshire Hathaway due to cautiousness to avoid disappointing shareholders.
  • Concerns arise about global conflicts potentially leading to catastrophic outcomes, with the speaker expressing worry but relegating atomic war fears to a "too hard" pile.
  • Warren Buffett's suggestion to address the budget deficit involves limiting congressional re-election eligibility based on national deficit percentages.
  • The speaker discusses the concept of modern monetary theory, expressing concerns about the level of indebtedness and its implications.
  • The importance of setting proper incentive structures in public policy to mitigate life's hardships is highlighted, with a focus on fairness and government integrity.
  • The discussion shifts to cultural aspects, emphasizing the value of reading for intellectual growth and the role of luck and leverage in achieving success, exemplified by Elon Musk's ventures.

01:15:39

"Learning from stories, laws, and life"

  • People learn best through stories that resemble real life.
  • The speaker receives numerous books as gifts and no longer purchases books.
  • The speaker enjoys binge-watching Seinfeld due to the humor in self-centered characters making wrong decisions.
  • There is a debate about the age of presidential candidates, with concerns about their ability to handle the job.
  • The speaker believes that being president, especially in times of atomic warfare, is a challenging and possibly futile task.
  • The speaker discusses the importance of creating effective laws to eliminate those that are ineffective or harmful.
  • The speaker criticizes certain professions like chiropractors for not providing genuine help.
  • The speaker advocates for removing fraud and counterfeiting as serious crimes to maintain societal integrity.
  • Oregon is reconsidering drug decriminalization due to the negative impact on public safety and quality of life.
  • The speaker emphasizes the importance of understanding what works in life and avoiding what doesn't to achieve success.

01:33:26

Buffett's Generosity and Resilience in Aging

  • Warren Buffett has made the decision to give away the majority of his money, with a significant portion going to foundations to last for another 100 years.
  • Despite being old and weak, Buffett no longer desires to catch a 200 lb tuna due to the physical effort it requires.
  • Buffett values his busy social schedule and active lifestyle in old age, finding it fulfilling and welcoming the changes that come with aging.
  • Buffett emphasizes soldiering through tough times, citing personal experiences like the loss of his child to leukemia and the importance of persevering.
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