All Segments
Charlie Munger calls Elon Musk 'brilliant' and bitcoin 'stupid and immoral'
17 segments available
ANDY SERWER: I'm here with Charlie Munger, Vice Chairman of Berkshire Hathaway. Charlie, great to see you. CHARLIE MUNGER: Nice to be here. ANDY SERWER: I want to continue with some of the questions that people were asking you at the annual meeting and start maybe with China, and trade and tariffs. And you said that even Trump can be right on some of this stuff. CHARLIE MUNGER: Yes, when people get mad enough at one politician, they get to thinking everything he says and does is wrong, and that's never the case. ANDY SERWER: What, what, go ahead and continue. I'm sorry. CHARLIE MUNGER: And all I said was that you don't want to be such an absolute purist for free trade. I'm almost a purist, but not quite, but I wouldn't want the entire steel industry in the United States to move offshore. There's some place where you could draw a line without ruining the world. ANDY SERWER: What should our trade policy be then? I mean, yes China can be unfair, is unfair, but how should we pursue this? CHARLIE MUNGER: Well, attitudes entirely different from our president's. I'm glad that we ran a big trade deficit with China. That enabled them to rapidly get out of poverty and obscurity. I welcome the Chinese to the group of advanced nations, which I think we enabled considerably by our willingness to trade with them as they moved ever upward in terms of complexity of enterprise. So I like what's happened. I don't regard it as unfair and bad. I'm not saying that it would be unthinkable to have some tariffs somewhere, but basically I'm a free trader and I am particularly a free trader in dealing with China. And I like the fact that free trade with China has enabled China to expand so much, and they got out of poverty. They had hundreds of millions of people in rural poverty and they made huge, in the whole history of the world, no big nation has ever advanced faster than China. And this free trade helped them do it. And I like it. ANDY SERWER: But aren't they unfair to us? Just to follow up on, you know, intellectual property. CHARLIE MUNGER: I'm sure there are places where somebody in China has some advantage over somebody in the United States that you and I might not like perfectly, but that will always happen. But basically, the Chinese broke the Berkshire Hathaway shoe business in Maine. It disappeared basically because their shoes were very good and cheaper. I'm not mad at China over that and Berkshire has prospered. It's not so good for Maine, but we can't help it. There's no way to make an advanced civilization never hurt anybody as it evolves. ANDY SERWER: There's a lot of talk about an elephant that Berkshire is on the hunt for a big acquisition. Could that elephant be in China.? And if it was, could you even buy it given the relationship between the two countries right now? CHARLIE MUNGER: I don't think it's likely that we'll be buying any great Chinese companies. The Chinese are very proud of their companies and they're proud of what they've accomplished. What I consider quite likely is that we will be invited to buy part of some great Chinese company. And just because they like the good company. And I think that is very likely to happen some time, and we would welcome it. We own minority positions in a lot of companies. We own a minority position in BYD. ANDY SERWER: Let me ask you, then, about BYD and Chinese cars. When will Chinese cars be allowed in the United States and what's holding it up, is it bureaucracy? CHARLIE MUNGER: Well the auto market is very competitive and very fully occupied. And of course, nobody in the United States wants to lose our last two big domestic suppliers, manufacturers of autos. Well three if you want to count Ferrari Chrysler. And so it's hard for somebody new to come in the American market big. And China has such a big market of its own. My guess is they'll stay busy in their own part of the world for a long time. ANDY SERWER: So that's not a priority for BYD? CHARLIE MUNGER: Well BYD's biggest advantage is in the electric cars. Where they're so close to the cutting edge of battery technology. And so they'd be crazy not to emphasize the hybrid electric cars over the gasoline cars. Not that they'll go out of the gasoline market, but I think they will be biggest in the hybrid and electric cars. Subscribe to Yahoo Finance: https://yhoo.it/2fGu5Bb About Yahoo Finance: At Yahoo Finance, you get free stock quotes, up-to-date news, portfolio management resources, international market data, social interaction and mortgage rates that help you manage your financial life. Connect with Yahoo Finance: Get the latest news: https://yhoo.it/2fGu5Bb Find Yahoo Finance on Facebook: http://bit.ly/2A9u5Zq Follow Yahoo Finance on Twitter: http://bit.ly/2LMgloP Follow Yahoo Finance on Instagram: http://bit.ly/2LOpNYz
Segments Timeline
Free Trade and China
Charlie Munger discusses his views on free trade, particularly with China. He emphasizes the importance of trade in lifting millions out of poverty and acknowledges that while there may be unfair practices, he supports the overall benefits of free trade. Munger argues against being an absolute purist in trade policies, suggesting a balanced approach.
"i'm here with charlie munger vice chairman of berkshire hathaway charlie great to see you nice to be here i want to uh continue uh with some of the questions that people were asking you at the annual ..."
The Impact of Trade Deficits
Munger elaborates on the positive effects of trade deficits with China, stating that they have significantly contributed to China's rapid economic growth. He expresses his approval of the trade relationship, highlighting that it has helped China transition from poverty to becoming an advanced nation, and he sees this as a beneficial outcome.
"i'm glad that we ran a big trade deficit with china that enabled them to rapidly get out of poverty and obscurity i welcome the chinese to the group of advanced nations which i think we enabled consid..."
Challenges of Competition
In this segment, Munger reflects on the competitive nature of the auto market and the challenges faced by new entrants, particularly Chinese companies like BYD. He discusses the importance of maintaining domestic manufacturers while acknowledging the strength of Chinese companies in their own market.
"but aren't they unfair to us just to follow up on you know intellectual practice i'm sure there are places where somebody in china has some advantage over somebody in the united states that you and i ..."
BYD's Focus on Electric Vehicles
Munger shares insights on BYD's strategy in the automotive industry, emphasizing their focus on electric and hybrid vehicles. He believes that BYD's advancements in battery technology position them well for future success in the electric vehicle market.
"anybody as it evolves there's a lot of talk about an elephant that berkshire is on the hunt for a big acquisition could that elephant be in china and if it was could you even buy it given the relation..."
Tesla's Bold Innovations
Munger discusses Tesla and its founder Elon Musk, describing Musk as bold and brilliant. He acknowledges Tesla's significant impact on the automotive industry and expresses uncertainty about Musk's future success, highlighting the risks and rewards associated with such ambitious ventures.
"and we would welcome it we own minority positions in a lot of companies we own a minority position in byd let me ask you then about byd and chinese cars when will chinese cars be allowed in the united..."
Bitcoin: A Speculative Medium
In this segment, Munger shares his critical views on Bitcoin, describing it as an anti-social and immoral speculative medium. He contrasts Bitcoin with existing payment systems, arguing that it lacks intrinsic value and serves no desirable social purpose.
"well byd's biggest advantage is in the electric cars where they are so close to the cutting edge of battery technology and so they'd be crazy not to emphasize the hybrid in the electric cars over the ..."
The Immorality of Bitcoin
Munger elaborates on his disdain for Bitcoin, comparing it to trading in morally questionable commodities. He argues that Bitcoin does not fulfill a necessary role in society and criticizes those who promote it as a viable currency.
"answering i can't criticize anybody else for wiseassery let's talk about shift gears a little bit talk about um the single-payer health care system that you mentioned and i think you said that when th..."
Political Reflections
Munger reflects on the current political climate and his evolving views on politicians, suggesting that excessive hatred is counterproductive. He shares insights from historical perspectives, indicating that political figures often return to favor over time.
"were profiting on this on the existing system in various ways i come from california if everybody in the nation had kaiser healthcare as we have it in california the net quality of medicine in the uni..."
Healthcare System Insights
Munger discusses the challenges of the American healthcare system, emphasizing the need for reform. He compares it to successful systems in other countries and suggests that entrenched interests hinder progress in improving healthcare quality.
"government ordains it so i think all they're trying to do is make the existing existing system better you'll remember that johnny rockefeller the first by spending 50 million dollars way back decades ..."
Wells Fargo's Future
Munger addresses the situation at Wells Fargo, expressing confidence in the bank's ability to recover from past mistakes. He believes that the challenges faced will ultimately lead to better practices and improvements in the long run.
"have had three different aspirations but i've always admired what rockefeller did and the man who talked him into it simon flexner also created einstein's home at the advanced that institute in prince..."
The Role of Young Investors
Munger highlights the contributions of younger investors at Berkshire Hathaway, praising their influence on investment decisions. He acknowledges their role in steering the company towards successful investments, such as in Apple.
"they react reacted poorly to trouble when it came so they made mistakes of judgment but i think you'll find them that they hate what's happened so much that they'll be less likely to make mistakes in ..."
Value Investing Philosophy
In this segment, Munger discusses the essence of value investing, asserting that all intelligent investment is inherently value investing. He explains how Berkshire Hathaway's approach has evolved while maintaining a focus on finding value.
"if one of the young investors had not steered us that way so maybe warren's conclusion in the end but it was prompted by one of the young men they've been enormously constructive and they help in a wh..."
Evolving Investment Strategies
Munger reflects on how Berkshire Hathaway's investment strategies have adapted to changing market conditions. He emphasizes the importance of seeking value in new areas as traditional opportunities become scarce.
"you want to buy something which wasn't worth as much as you were paying for it and who wouldn't like buying something for less than it's worth so the only difference when people talk about value inves..."
Bitcoin's Lack of Purpose
Munger reiterates his critical stance on Bitcoin, arguing that it serves no essential purpose in society. He contrasts it with existing payment systems and expresses concern over its speculative nature.
"that particular place but i think that's all i think it's a bad use of the language to think there's a difference between value investment investing and other good investing all good investing is valu..."
Critique of Cryptocurrency
Munger expands on his critique of cryptocurrency, labeling it as a dangerous speculative asset. He emphasizes the need for ethical considerations in investment and expresses disdain for the promotion of Bitcoin.
"mind that's what captivates all these people they've actually created a product that's hard to create more of but not impossible now that is very peculiar but they've managed to do it so a lot of the ..."
Reflections on Trump
Munger shares his reflections on Donald Trump, noting a shift in his perspective. He discusses the importance of maintaining a balanced view of politicians and the cyclical nature of political favor.
"and if you have a wechat why would you do it in a medium where the value changes enormously nobody is right mine would want a payment system where the very thing you were using went up and down by 20 ..."
Historical Perspective on Politics
In this closing segment, Munger offers a historical perspective on politics, suggesting that current political challenges are not unique. He encourages a broader view of political history to foster understanding and patience.
"because i consider it counterproductive to hate as much as both parties now hate and i have disciplined myself and i now regard all politicians higher than i used to i did that as a matter of self-pre..."