Charlie Munger: The Golden Era Of Investing Is Over

Charlie Munger accepted a one-on-one interview with Becky Quick following the 2019 Daily Journal Annual Meeting in Los Angeles. In a wide-ranging conversation and his usual no-holds-barred manner, the 95-year-old chairman of the Daily Journal gave his thoughts on whether he thinks the golden era of investing is over, the current state of party politics, his take on the buyback debate, trade tensions with China, and the life advice he abides by.

Charlie Munger Golden Era Of Investing
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Charlie Munger Interview Following 2019 Daily Journal Annual Meeting

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Charlie thank you very much for taking the time to sit down with us today. Glad to do it. You spent a lot of time today talking about how people who think that they can beat the market averages are probably fooling themselves. How much tougher it’s gotten to be a value investor or even just an investor in general. I was just wondering do you think the golden era of investing is over. Well not forever.

Why. Well because I think.

It isn’t like the last recession or the last big opportunity.

The world that we’re going to get us past. There’ll be opportunities in the future. There are times that are easier and there are times which are harder.

So is right now tougher and just getting hurt just because valuations have come up so much. Of course. So you think it’s a good valuation to come up with B the competition. Sorting through those.

Opportunities is more intelligent more aggressive and more numerous.

Of course it’s harder.

Do you think that the net result is people are going to get worse results.

Do you think that the number of people who are smarter who have better information than they used to that that will go down or it will just be a question of valuations coming down at some point. Well I think valuations will come will go up and down because they always have and.

And I think we’ll have smart people in this game forever. Lots of them.

The opportunities that we all remember came from a demoralized period when about 90 percent of all natural stock buyers got very discouraged with stocks. That’s what created. The opportunity for these fabulous records that my generation had. That was a rare opportunity came to a rare people of whom I was one born with another so you’re trying to appeal to start now have a much less.

They have lower opportunity. Do you think we saw a generational low after 2008 beginning of 2009 generational. Maybe. I don’t think the by Howard Marks is gonna be Jaber.

Do you know it was them. Yes it was it was low. Were huge opportunities them.

What about just back around December of Christmas Eve. Prices were down 20 percent further for a lot of stocks.

Well I don’t follow the details and remember the exact days that are. I know that when the Daily Journal bought those bank stocks it was basically a low tech. Right. That was an accident. You deserve no credit for that. You deserve some credit. No. Well. Well but the exact perfect timing was an accident.

What about the lack of volatility that we’ve seen in the markets. That’s also kind of as central banks got into the game and increased liquidity. Well of course as with all this massive central bank interference.

I think that was necessary to do. I admire Lee. The politicians who did it. And the technocrats including the Federal Reserve legal. And I think it was absolutely required that the danger they were avoiding was worse than the troubles they got. So. But it was very peculiar and it did have the accidental effect of. Bailing out the rich and help the poor. And nobody was doing that because they loved the rich. They just didn’t have any other tool in the kit. And they had to do something. So the inequality that came from that it wasn’t malevolent. It was an accident and it probably won’t happen again. It’s not a permanent conspiracy against the. For it was. It was an accident that we had the huge recession caused partly by a basket of stupidity in finance and venality. And. Then when we ran out of tools and had to do something.

Really peculiar that we’d never done before. That was a wise thing to do given the amount of trouble we were in. You got to remember the trouble weren’t allowed to run we might have a revegetation of the kind of problems that brought Hitler into power. So we were facing real difficulties and both parties and our technocrats got together for the last time I think. And. M.. Worked us. Out of it. It was a very admirable thing that you can all be proud. I’ve been proud of nothing in politics since.

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