Charlie Munger: The Standard Human Condition Is Ignorance

Charlie Munger in a conversation with Andy Serwer, discusses about investing and life choices. He says, “the standard human condition is ignorance and stupidity”

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Charlie Munger Talks About Investing And Life Choices That Secure Prosperity

Transcript

I’m Andy sir. Welcome to influencers. And welcome to our guests. Vice Chairman of Berkshire Hathaway, Charlie Munger. Charlie nice to see you. Delighted to be here. So you just had the annual meeting and I have to ask you what your favorite moments of that were. Well what I like is that both the shareholders and employees of Berkshire.

Are so extremely enthusiastic. And it’s not just that they’ve made a lot of money and have nice careers. They think they’re on the right side.

And you know they come there to hear you guys talk all day. And yes like Coke is like a cult.

You know in a good way though. Yeah. Good coke. Yes a good coke. Okay.

I mean the stuff that they hear some of it’s new some of it’s old and a lot of it is common sense and you were talking all but it’s common sense.

Right. But of course when people use the word common sense what they mean is uncommon sense because the standard human condition is ignorance and stupidity. And they say oh Joe has common sense. They mean as he has uncommon sounds I guess it’s a bit of a misnomer then.

But really is. So you know why is it that people can’t think clearly about investing or decisions in their lives.

Well I don’t think very well about sex or gambling either. You know the standard human condition is a lot of miscognition and there are ways to make hay of that. Or yes you can take advantage of other people you can improve your own life by eliminating your miscognitions Let me shift gears a little bit Charlie and ask you about the U.S. economy and what is your take on where things are right now. Well obviously they’re booming but you know the economy sometimes booms and sometimes it doesn’t. And you have to live your life through both. Episodes. All right. As we just keep swimming and sometimes the tide is with us and sometimes against and but we keep swimming either way.

Are you surprised by how long this expansion has last or it’s lasted a long time but what was really remarkable is that we never printed money so much and spent it so fast and bought back so much debt public and private. So this is total terra incognita in economics and nobody knew for sure how it was going to work. So is it risky then. Of course it was risky but it worked. And I don’t think they had much else that it would work. They weren’t set up to do stimulus too much controversy. Democratic inertia is very thin. So they had to do something and all they had left was just to print money and start buying things. And that’s what they did. It turned out to be a very wise response. And what’s even more remarkable is that both. Congress and the presidency and under both parties made the same decision. They all cooperated. It was the last time. But where’s that going to leave us ultimately. Well it left us licking the Great Recession. So whenever we to cooperation again since it worked so well.

How much is President Trump responsible for this current economic situation. Well I think he deserves some credit but. A lot of it just happened.

Economic Cycle Yeah. And the decisions of his predator’s predecessors.

What do you think about the president’s campaign to lobby the Fed to lower rates or keep rates low well I think presidents have always done this.

If you’re a politician in a democracy of course you want people to grant money and spend it. And of course it’s not a good idea. The best example. Probably in the whole world is Singapore. Which has zero debt and never prints money and spends it. And it’s one of the most successful places on earth I wish we were like that. But but there’s only one Singapore.

Well some people now say that federal debt is not a problem at all.

Well if you believe that you believe in the tooth fairy because then we don’t have to have any more taxes ever we’ll just print money and live happily ever after. It obviously won’t work. So there comes a point when printing money is counterproductive. Are we at that point or you can know. I don’t think we are at that point but nobody knew where the point was going to come and we don’t know now. None of these.



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Jacob Wolinsky
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Prior to ValueWalk, Jacob was VP of Business Development at SumZero. Prior to SumZero, Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver