The Long Term Investor

WELL.....I am in there with TomB16......I remember very well the OIL CRISIS.....and the HUGE shock to the economy. My boss would send me to sit in line at the gas station to......try........ to get gas in his car. When I was in High School in the 1960's......gas stations were having price wars and it was not unusual to get gas for 21cents a gallon in Texas.

The Iran hostage years with Jimmy Carter......those four years just SUCKED the life out of the economy and the soul out of the country. Of course......those years came after the Ford years......with......people wearing WIN buttons........."whip inflation now". The government had a slogan for the country regarding inflation. Of course the Ford years.....followed the Nixon Impeachment and the resignation for criminal behavior of the siting Vice President, AGNEW.....another shock to the country. AND....of course the Nixon years followed the......LBJ....Viet Nam quagmire.....riots in the streets....bombings of buildings by the weather underground (now college professors) etc, etc, etc. Of course....the LBJ years......followed the assassination of Kennedy.

I think investors had a little bit on their plates back than......including one of the longest BEAR MARKETS in history in the 1970's......massive inflation.....Stagflation....the 1987 flash crash......the dot com crash......the near economic collapse of 2008/2009, etc, etc.

Kind of makes what is going on now.........some sort of CRAZY JOKE.......to see how people are reacting......in the face of one or two week events that are actually TRIVIAL....to those of us that lived and invested since the 1970's......1980's.....1990's.....2000's.....2010's.....up to now.

 

Charlie Munger has a lot in the business news lately.....lots of interview quotes on many topics. He has the GUTS....and money.....to say what he thinks and not care. Here are a few:

https://finance.yahoo.com/news/char...rybody-can-be-a-great-investor-131527716.html

“I think people have the theory that any intelligent, hard-working person can be a great investor,” he said. “I think any intelligent person can get to be a pretty good investor and avoid certain obvious traps.”

“But I don’t think everybody can be a great investor, or a great chess player,”

“It’s a mistake for investment management to hire armies of people to make conclusions. Better off to concentrate your decision power in one person... and choose the right person,” he said. “I don’t think it’s easy for ordinary people to become great investors.”

https://finance.yahoo.com/news/its-...orms-luring-gamblers-to-stocks-192624515.html

ON GAMESTOP....“That's the kind of thing that can happen when you get a whole lot of people who are using liquid stock markets to gamble the way they would in betting on race horses," he said. "And the frenzy is fed by people who are getting commissions and other revenues out of this new bunch of gamblers. And of course, when things get extreme, you have things like that short squeeze."

It's really stupid to have a culture which encourages as much gambling in stocks by people who have the mindset of racetrack bettors. And of course it's going to create trouble, as it did,"

"And I have a very simple idea on the subject. I think you should try and make your money in this world by selling other people things that are good for them," he said. "And if you're selling them gambling services where you rake profits off the top like many of these new brokers who specialize in luring the gamblers in. I think it's a dirty way to make money. And I think that we're crazy to allow it."


In another question, Munger was asked whether he still identified "wretched excess" in the financial system, as he had warned of in February 2020, and asked where he saw the excesses as most egregious in the current market. "It's most egregious in the momentum trading by novice investors lured in by new types of brokerage operation like Robinhood," Munger said. "And I think all of this activity is regrettable. I think civilization would do better without it."

https://finance.yahoo.com/news/munger-the-world-would-be-better-off-without-spacs-213619922.html

ON SPACS "I don't participate at all. And I think the world would be better off without them," the 97-year-old billionaire investor said. "I think this kind of crazy speculation in enterprises not even found or picked out yet, is a sign of an irritating bubble."

"It's just that the investment banking profession will sell s— as long as s— can be sold," Munger said.

https://finance.yahoo.com/news/mung...bitcoin-by-quoting-oscar-wilde-195247281.html

ON BITCOIN “I don’t think bitcoin is going to end up the medium of exchange for the world,” he said in response to a question about new technology disrupting the banking system. “It’s too volatile...to serve well as a medium of exchange.”

The reason, Munger said, was that central banks like controlling their own banking system and their own money supplies.
“It’s really kind of an artificial substitute for gold,”

Bitcoin, Munger said, reminded him of an old Oscar Wilde quote about fox hunting: “the pursuit of the uneatable by the unspeakable.” (The quote is actually: "Fox hunting is the unspeakable in pursuit of the inedible," from the play “A Woman of No Importance.”)

When asked what was more unbelievable, Tesla’s stock price or bitcoin at $50,000, the 97-year-old billionaire quoted the lexicographer Samuel Johnson: “I can’t decide the order of precedence between a flea and a louse, and I feel the same way about those choices.”

“I think people who are professional traders that are going to trade cryptocurrencies, it’s just disgusting,” Munger added at the time. “It’s like someone else is trading turds and you decide I can’t be left out.”

https://finance.yahoo.com/news/char...he-crisis-in-wealth-management-114327424.html

Investing icon Charlie Munger, Berkshire Hathaway's (BRK-B, BRK-A) vice-chairman and Warren Buffett's long-time business partner, says his type of value investing will “never go out of style.” “Because value investing — the way I conceive it — is always wanting to get more value than you pay for when you buy a stock, and that approach will never go out of style,”

According to Munger, some think that value investing means chasing companies with a lot of cash but run a lousy business.
" don't define that as value investing," he added. "I think all good investing is value investing. It's just some people look for values in strong companies and some look for values in weak companies. But every value investor tries to get more value than he pays for."

Munger observed that in the wealth management space “a lot of people think if they have 100 stocks they're investing more professionally than they are if they have four or five." “I regard this as insanity. Absolute insanity,” Munger said. "I think it's much easier to find five than it is to find 100," the 97-year-old investor argued. "I think the people who argue for all this diversification, by the way, I call it 'diversification,' which I copied from somebody. And I’m way more comfortable owning two or three stocks which I think I know something about and where I think I have an advantage.”

"when asked how he advises universities and charitable institutions to manage their endowments, Munger shared that one charitable endowment where he’s had “some influence for a very long time” has a “bunch of hotshot financiers in every branch of wealth management there is” on its board. According to Munger, that institution has two assets in its endowment account — a large interest in Li Lu’s limited partnership and a Vanguard index fund. “And the result of holding those two positions, we have a way lower cost than anybody else and we make more money than practically everybody else," he said. "So you now know what I do in charitable institutions. By the way, that's not the normal outcome in America. The wealth management industry has a crisis on its hands. They really need the world to stay the way it is, and that isn't necessarily right for its customers.”

MY COMMENT

TALK about....BLUNT. BUT...he has certainly earned the right to speak. Take what you wish from any of the above....I think his opinions are interesting for discussion or thought.

 

The thing that people DONT realize is.......very few people invested until the advent of the IRA in 1974. Up into the mid 1980's it was still very RARE for people to be investors. Before than I think the percentage of people that owned a stock or mutual fund was probably 10% or under. There was no need for people to invest....everyone that worked for a company had some sort of pension plus Social Security.

"According to the first share owner census undertaken by the New York Stock Exchange (NYSE) in 1952, only 6.5 million Americans owned common stock (about 4.2% of the U.S. population)."https://www.investopedia.com/articles/stocks/09/stocks-1950s-1970s.asp

THE ABOVE....is why it was so UNUSUAL for my mom to be investing in mutual funds and stocks....starting...... in the mid 1950's. She actually had a broker......highly unusual.......at that time for anyone.....especially a woman.

I remember very well in 1977......guys going to the Merrill Lynch office at lunch to watch the stock ticker in the lobby. That was the ONLY way to get real time quotes.