Yesterday, December 14th 2020, Charlie Munger did a Zoom call with Caltech. I think the last time he formally spoke publicly might have been at the Daily Journal AGM back in February since he didn’t Berkshire’s AGM.
Caltech decided to celebrate 2020 Distinguished Alumnus Charles T. Munger. Munger attended Caltech in 1944 where he studied meteorology. In a year that mixed dramatic social and worklife changes with record-breaking trends in the S&P and the Dow, has there ever been a better time to hear Munger’s perspective? Caltech had a conversation for about an hour.
The ExodusPoint Partners International Fund returned 0.36% for May, bringing its year-to-date return to 3.31% in a year that's been particularly challenging for most hedge funds, pushing many into the red. Macroeconomic factors continued to weigh on the market, resulting in significant intra-month volatility for May, although risk assets generally ended the month flat. Macro Read More
I didn’t post the video yet. Caltech was supposed to publish it on its Youtube channel but it’s not there at the moment. You can find copies on Youtube but the quality is subpar. If the official Caltech copy ever surface, I will add it.
The notes below are a combination of mine, Tren Griffin, and Nick Henderson. Thank you.
Notes From Charlie Munger's Zoom Call With Caltech
- Munger sees virus impact dwindling in about a year as the vaccines are widely distributed. “They’ll spread these vaccines over the world so fast, it’ll make your head spin.” Munger actually spoke just hours after some of the first vaccine shots were delivered in the U.S.
- Retailers: are under heightened pressure during the pandemic, were already in a tough situation because of the growth of e-commerce. “Certainly it’s been a very difficult place to make money because of what the internet has done,”
- Future market returns: Munger expects equity-market returns to be lower in the next 10 years compared with the previous decade. “The frenzy is so great and the systems of management, the reward systems, are so foolish,”
- QE and fiscal deficits: Munger urged caution with the levels of quantitative easing and large government deficits seen in recent years. “We’re in very uncharted waters,”
- Warning: “Nobody has gotten by with the kind of money printing we’re doing now for a very extended period without some trouble and I think we’re very near the edge of playing with fire.”
- “It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid instead of trying to be very intelligent.”
- Key ingredients for successful investing: “You have to know a lot, but partly it’s temperament, partly it’s deferred gratification, you gotta be willing to wait. Good investing requires a weird combination of patience and aggression and not many people have it. It also requires a big amount of self-awareness about how much you know and what you don’t know. You have to know the edge of your own competency, and a lot of brilliant people think they’re way smarter than they are. And of course that’s dangerous and causes trouble”
- Charlie has said many times that investing is harder now. He said that again today. When he started out there was lots more stupidity. If investing was as easy as following a formula there would be lots more billionaires who made their fortune investing than there are today.
- Never stop learning.
- Try and benefit from a tail wind. People from Harvard and Stanford don’t go to work at Costco, they should think about it, it’s a rising tide (or at least it was) and your competition is not going to be that strong (inside of Costco).
- On business getting “clobbered” over time: “Over the long term, the companies of America behave more like biology than they do anything else. In biology, all of the individuals die, so do all of the species. It’s just a question of time”
- Technology: “Technology is a killer as well as an opportunity.”
- VC tech firm: “The most remarkable investment firm in America is probably Sequoia. That venture-capital firm absolutely fanatically stays right on the cutting edge of modern technology. They have made more money than anybody and they have the best investment record of anybody. It’s perfectly amazing what they have done”
- Apple: “Think about what Apple is worth compared to John D Rockefeller’s empire. It’s been the most dramatic thing that’s almost ever happened in the entire world history of finance”
- China: “Who would have guessed that a bunch of communist Chinese run by one party would have the best economic record the world has ever seen.”