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Charlie Munger: The Strongest Companies In The World Are In China, Not America

Charlie Munger: The Strongest Companies In The World Are In China, Not America

20 February 2020

Famed investor Charlie Munger, vice chairman at Berkshire Hathaway and longtime business partner of Warren Buffett, shared his investing wisdom at an annual address on Wednesday, speaking on a variety of topics, including China and why he’d never buy Tesla stock.

While the U.S. has the largest economy, “the strongest companies in the world are not in America,” Munger, 96, said at the annual meeting of Daily Journal Corp.—the Los Angeles newspaper company where he serves as chairman. “I think Chinese companies are stronger than ours and are growing faster.”

With the 2020 election drawing ever closer, Munger also raised concern over the state of U.S. politics, calling it “weirdly awful” because of the “excesses of hatred you see everywhere.” 

He warned about the future: “I think there are lots of troubles coming,” he said, while also adding that overall, “there’s too much wretched excess.” 

Munger specifically focused on China, saying that it’s “really stupid” how investors there “love to gamble in stocks.” He added that “it’s hard to imagine anything dumber than the way the Chinese hold stocks . . . they’re so good at everything else.”

When asked about Tesla stock and its wild speculative trading in recent days, he responded: “I would never buy it and I would never sell it short.”

Munger, who just turned 96, is Warren Buffett’s right-hand man at Berkshire Hathaway—and the two of them are considered to be among history’s best and most famous investors.

What to watch for: Munger also spoke about the newspaper industry, arguing that daily newspapers “are all going to die.” He said “technological change is destroying daily newspapers in America” and causing revenue to slow, though a few larger publications will survive. His address to Daily Journal shareholders on Wednesday comes two weeks after Berkshire Hathaway gave up on its newspaper empire, selling more than 30 local papers to publisher Lee Enterprises for $140 million in cash. Buffett had originally paid $36 million for The Buffalo News, and bought 28 of the local papers in Berkshire Hathaway’s Media Group for $344 million in the early 2010s. 

Tangent: Munger also answered questions about Tesla, which has recently undergone wild speculative trading. At one point last week, Tesla stock was up 50% in two days—reaching almost $1,000 per share, before then plummeting by nearly 20% the next day. “I think Elon Musk is peculiar, and he may overestimate himself, but he may not be wrong all the time,” Munger said. “Tesla sales went up because Elon has convinced people he can cure cancer.”

Big number: Forbes estimates that Munger, who first met Buffett at a dinner party in 1959, currently has a net worth of $2 billion.

Source: Forbes

20 February 2020
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