investor Charlie Munger directly expressed his optimism about China and the United States' inflation at the annual shareholder meeting of his media company Daily Journal, which is a major crisis second only to nuclear war .
He also expressed his disgust for cryptocurrency. Musk revealed on Twitter that Munger had also predicted the failure of Tesla in the early days. The article summarized the highlights of Munger's speech.
Optimistic about China
When asked about investment in China Alibaba , Munger emphasized China's huge manpower and continuously improving technology, believing that Chinese companies are stronger than other competitors and their stock prices are cheaper than American competitors. And pointed out the importance of Chinese-style capitalism to China's economic rise.
Like many wise men, Buffett likes to invest in areas that he personally feels comfortable with. As for investing in China, I feel more comfortable than Buffett.
He also mentioned the tense relations between China and the United States, believing that it was "very stupid" for the U.S. government to allow the existing tensions to continue to rise. China and the United States should get along more harmoniously, and urged the authorities to reconcile with China.
Inflation
Munger has warned several times about the seriousness of the current U.S. inflation, believing that it may be more difficult to solve than the inflation problem faced by Paul Volcker, a legend in the U.S. financial community - former Chairman of the Federal Reserve Board in 1980.
Volcker raised the federal benchmark interest rate from 10.25% to 20% in 1980, and maintained it above 16% from the end of the year to May of the following year. Although it ended the long-term inflation in the United States, it also paved the way for future economic recession.
Munger said:
You could argue that hyperinflation symbolizes the death of democracies and that we are clearly in a long-term crisis. Take a look at the Roman Empire . Hundreds of years of continuous inflation eventually led to the country's demise. This may be a long-term and major crisis second only to nuclear war.
He believes that former US Treasury Secretary Larry Summers is right to claim that the Federal Reserve underestimated the risk of inflation, and he revealed that he will personally hold Berkshire Hathaway , Costco, Daily Journal and some Chinese concepts stocks to cope with the crisis.
He emphasized: "You may have to pick a few of the bad ones that are not so bad."
Extremely bullish Costco
Munger was asked about his views on Costco's high performance. He said that he did not believe that the actual value of the stock could not be eliminated. Constantly hitting highs, even for an admirable company like Costco, may feel like its stock price is too high.
But let's say I lead a sovereign wealth fund with an investment horizon of 30 to 50 years, and I would buy Costco (COST) at current prices. It's not that I'm willing to buy outright, I can't get used to buying at a high cost, and I'm not thinking about selling any of my Costco holdings despite the current selling price.
He emphasized: "Costco will become an Internet giant. It has a good culture and ethics and will be an unprecedentedly powerful enterprise. I hope that American companies can operate as well as Costco."
is more complicated The investment market
Munger Mentioning that he has never hoarded cash in his investment career, he can always find good investment opportunities, but now Buffett's Berkshire Hathaway has accumulated a large amount of cash and cannot find investment targets.
He pointed out that you cannot buy anything at the price you are willing to pay. At present, other people in the market are busy pushing up the price, and many transactions are also pushed up by bankers in order to earn transaction fees. He gave advice:
There is no universal investment advice. Some people are smart and can invest in cutting-edge technology. Everyone should evaluate their own skills to make corresponding investments. The market will be more complex in the future, and it will be harder for college graduates to get rich than me.
Cryptocurrency
The host asked, having previously described cryptocurrencies as rat poison, is he surprised that Bitcoin is now more mainstream? Munger replied:
“No, assuming a perfect currency is used for extortion, kidnapping, evading regulations, etc., why would the government accept this technology that cannot be traced and is supported by a group of people who want to get rich quick into the payment system? ? Of course I hate it very much. It is very bad that people are too crazy about Bitcoin, and the Chinese government’s ban on cryptocurrency is a wise decision.” The host
asked again, what are the predictions for the future of cryptocurrency in the United States?
I don’t know, the point is that our legislators will enter the crypto industry after leaving government agencies, which makes it difficult for the government to make the right decisions about cryptocurrencies such as Bitcoin.
Munger also emphasized that he was proud that he had not been exposed to cryptocurrency. It was like a disease. When asked about his views on central bank digital currency , he believed that the United States already has digital currency , that is "Bank Account".
