1999 Annual Shareholders Meeting·18
Shareholders: In an article published in charity magazine, you discussed funds, fund managers of different investment portfolios and the different screening processes they adopted. Given that you have already given such an obvious answer in that article, why do they still do that?
Munger : means why you should use it even if you know that the accounting operations of stock options are corrupt?
The reason is the same as the question you asked, because of money.
The current management system of the country employs a large number of people, and to a certain extent it follows the system that humans have always used before: there are always diviners and fortune tellers around the king, because people want to understand the future. Similarly, a rich man is often willing to spend money to let some wise men tell him how to become richer and how to improve his sense of security.
Therefore, there are always people who spend existing wealth purchasing suggestions in order to gain a sense of security and opportunities, and this basic appeal will always exist. In capitalist society , suggestions will also spread where there is money. Some suggestions are good, but many suggestions are simply lies. There is no way, I am afraid this is the true face of the society we live in.
In my opinion, what big funds are doing is very ridiculous. The following situation makes me feel very sad. We encourage everyone to work hard to study in famous universities such as , Harvard, , Massachusetts, but after graduating from higher education institutions, these people actually make a living by providing empty advice.
fund hires diviners at a high price. They use these diviners to hire other diviners, and then ask some diviners to tell them whether the previous two levels of diviners were doing right. If they were wrong, what was wrong. It's like a crazy tea party for a hatter.
This is why we have satirical literature and drama, and why we see so many strange things. This is an imperfect world, and I'm afraid it will be the case for a large part.
The facts reflected in my above views are very obvious and clear. They have attracted quite a lot of attention and have also provided some people with topics of discussion. But so far, I still talked more and did less, and I still haven't seen any fund's behavior change in the slightest. The fund's board of directors hires three to four levels of fortune tellers to keep writing checks and obey their words.
And these fortune tellers are very smart, which makes the situation even more sad because the net contribution we attract the smartest people in the United States to engage in the industry has turned out to be negative. This is certainly not a good way to manage society, and in fact, it can be said to be very bad.
Shareholders: You and Mr. Buffett often give speeches in universities or other forums. Can I take the liberty to ask, have you put these speeches on the Berkshire website?
Munger: This is a very interesting idea, but I don't want to put the speech online. Based on the few speeches we have already given, I have received more attention than I actually expected. I hope you don't persuade me to do this.
"Outstanding Investor Digest" magazine once published my speech at University California , and Warren did send this speech to Berkshire shareholders. If Outstanding Investor Digest publishes more of my speech, then there will be more enemies in this world.
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