Money and Finance
- Wal-mart In 1974
A great blog post from Philosophical Economics, and a great example of some of the things Sanjay Bakshi stresses, as well as one of the best examples of what Charlie Munger meant when he said: “"...if a business earns 18% on capital over 20 or 30 years,...
- Charlie Munger On Efficient Markets And Bureaucracy
Via Whitney Tilson’s notes from the 2007 Wesco Annual Meeting:If markets were efficient, this tent wouldn’t be so full. Some business schools are teaching properly, but the world grew up amidst a different fashion, encouraged by academics of the era....
- Charlie Munger On The Insurance Business And Ethical Limits
Via Whitney Tilson’s notes from the 2007 Wesco Annual Meeting:Views on the insurance business and ethical limits I don’t think the insurance business will be that great for most people in it. I think we will do way better. We have great people....
- A 13% Hurdle...
Just an interesting couple of comments mentioning the 13% hurdle number which I hadn’t noticed together until recently. In Poor Charlie's Almanack, I think there was also a comment from Munger along the lines that Berkshire's one big, 'hedgehog'...
- Charlie Munger On Opportunity Cost…
Via Whitney Tilson’s notes from the 2006 Wesco Annual Meeting:It doesn’t matter to Warren where the opportunity is. He has no preconceived ideas about whether Berkshire’s money ought to be in this or that. He’s scanning the world trying to get...
Money and Finance
Charlie Munger on his experience in 1973-1974...
Via Whitney Tilson’s notes from the 2006 Wesco Annual Meeting:
That is a very good question. When I operated a partnership, I got hit in 1973 and 1974, which was the worst collapse since the 1930s. So I got hit with a once-in-50-years-type event. It didn’t bother me with my own money, but it made me suffer the tortures of hell as I thought through the loss of morale of the limited partners who had trusted me. And the agony was compounded because I knew that these assets were sure to rise because they could be liquidated for more than I’d bought them for in due course. But the individual securities were traded in liquid markets so I couldn’t mark them up from the trading price because the opportunity cost for my partners was set by the trading price. I would say that was pure agony. The lesson from that for all of you is that you can have your period of pure agony and live through is for many decades. It’s a test of character an endurance.
I don’t think any fully engaged young man wouldn’t have gotten into the pain that I did in 73-74. If you weren’t aggressive enough and buying on the way down and having some agony at the bottom, then you weren’t living a proper investment life. I wouldn’t quarrel with anyone who was more cautious and less aggressive than I was. But what got me into the agony was buying things for far less than what I was sure I could liquidate them for in due course. I don’t think it was wrong, but it was agony.
- Wal-mart In 1974
A great blog post from Philosophical Economics, and a great example of some of the things Sanjay Bakshi stresses, as well as one of the best examples of what Charlie Munger meant when he said: “"...if a business earns 18% on capital over 20 or 30 years,...
- Charlie Munger On Efficient Markets And Bureaucracy
Via Whitney Tilson’s notes from the 2007 Wesco Annual Meeting:If markets were efficient, this tent wouldn’t be so full. Some business schools are teaching properly, but the world grew up amidst a different fashion, encouraged by academics of the era....
- Charlie Munger On The Insurance Business And Ethical Limits
Via Whitney Tilson’s notes from the 2007 Wesco Annual Meeting:Views on the insurance business and ethical limits I don’t think the insurance business will be that great for most people in it. I think we will do way better. We have great people....
- A 13% Hurdle...
Just an interesting couple of comments mentioning the 13% hurdle number which I hadn’t noticed together until recently. In Poor Charlie's Almanack, I think there was also a comment from Munger along the lines that Berkshire's one big, 'hedgehog'...
- Charlie Munger On Opportunity Cost…
Via Whitney Tilson’s notes from the 2006 Wesco Annual Meeting:It doesn’t matter to Warren where the opportunity is. He has no preconceived ideas about whether Berkshire’s money ought to be in this or that. He’s scanning the world trying to get...