Saturday, May 4, 2013

Charlie Munger Unfiltered

When Charlie talks, I listen. You should too.

So when he decided to give an exclusive interview to Becky Quick the day before the Berkshire Hathaway shareholders meeting, I was all ears. And Charlie didn't disappoint.

Here are his thoughts on a wide range of subjects.

What Cyprus demonstrates is an old truth. You can't trust bankers to govern themselves. A banker who's allowed to borrow money at x, and loan it out at x y, they'll just go crazy and do too much of it if the civilization doesn't have rules that prevent it. What happened in Cyprus is very similar to what happened in Iceland. It was stark raving mad in both cases. And the bankers, they'd be doing even more if the thing hadn't blown up. I do not think you can trust bankers to control themselves. They're like heroin addicts.

On the functioning of Washington
I think we should have more bipartisan cooperation, less theology based hatred between the two parties. I can remember when we helped rebuild Europe on a bipartisan basis, that's my kind of situation. That's the kind of thing I admire. That is not what you see now. They want to score points against one another to a very extreme degree and very few people are thinking about cooperating to make the thing better. We wouldn't have our constitution if the politicians at the constitutional convention behaved like they do now. They compromised. Look at how wonderful the result was. … Both parties would say the sequester is very regrettable but they would each say it's the other parties fault. 

The economy
I've never made the least effort to predict short-term swings in macroeconomics. When things are awful, I predict that some day they will be better. When things are wonderful, I predict some day they will be awful. But apart from those general feelings, I never try and predict. I think it's a waste of time. 

Are things awful?
No, but I think they are sub-optimal. There are a lot of people who are sort of on the sidelines who are so discouraged they've quit trying. … I don't try to profit from predictions of  short term swings in the economy. 

Investing Berkshire's Money
No. In Berkshire we're trying to swim well against the tide, or with the tide even. We're indifferent, whether the tide is running for us or against us, we just keep swimming. And as long as we're swimming a little better than the tide, we think we'll average out just fine. That makes us not spend much time thinking about the tide. 

The rest of my notes fromt this interview will be published tomorrow morning in an exclusive email to subscribers. If you're not on the list, you can sign up for free.

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If you have the time, you can watch the entire interview