Some of Charlie Munger best savage moments
The quotes with a bit more detail and context:
About active stock trading & related courses:
If you take the modern world where people are trying to teach you how to come in and trade actively in stocks. Well I regard that as roughly equivalent to trying to induce a bunch of young people to start off on heroin. It is really stupid.
And when you’re already rich to make your money by encouraging people to get rich by trading? And then there are people on the TV, another wonderful place, and they say, “I have this book that will teach you how to make 300 percent a year. All you have to do is pay for shipping and I will mail it to you!”
How likely is it that a person who suddenly found a way to make 300 percent a year would be trying to sell books on the internet to you! It’s ridiculous.
About boards of directors:
Buffett: I've been on 19 boards, and I've never seen a director to whom fees were important object to an acquisition or a CEO's compensation--members of compensation committees act like Chihuahuas, not Great Danes or Dobermans. I hope I'm not insulting any of my friends who are on compensation committees.
Munger: You're insulting the dogs.
About GME:
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.
It's not generally noticed by the public, but clearinghouses clear all these trades. And when things get as crazy as they were in the event you're talking about, there are threats of clearinghouse failure. So it gets very dangerous.
"Free" brokers:
Robinhood and other brokerages catering to novice individual investors are really supplying “gambling services” and make money in a “dirty way,” Munger said, according to Bloomberg.
It’s most egregious in the momentum trading by novice investors lured in by new types of brokerage operations like Robinhood.
I think all of this activity is regrettable. I think civilization would do better without it.
No one should believe Robinhood trades are free. The frenzy is fed by people who are getting commissions and other revenues out of this new bunch of gamblers.
When you pay for order flow, you're probably charging your customers more in pretending to be free. It's a very dishonorable, low-grade way to talk.
Nobody should believe that Robinhood's trades are free.
On neo-liberal banking deregulations:
People really thought that giving a predatory class of people the ability to do whatever they wanted was free-market enterprise. It wasn't. It was legalized armed robbery. And it was incredibly stupid.
The whole world is better when you don't reduce engineering standards in finance. We skipped a total disaster by a hair's breadth.
I'm a big fan of the people who took us through the crisis. I'm not a big fan of the people who caused the crisis. Some of them deserve to be in the lowest circle of hell.
About Ethanol:
I think running automobiles on corn is one of the dumbest ideas.
Ethanol is quite possibly the stupidest thing ever invented by rational people. The ultimate social safety net -- which is a very good idea, by the way -- is cheap food, and ethanol production is destroying this. It was a monstrously stupid idea like I haven't seen before.
About Bitcoin:
It’s just dementia. And I think the people who are professional traders that go into trading cryptocurrencies, it’s just disgusting. It’s like someone else is trading turds and you decide, ‘I can’t be left out'.
About active stock trading & related courses:
If you take the modern world where people are trying to teach you how to come in and trade actively in stocks. Well I regard that as roughly equivalent to trying to induce a bunch of young people to start off on heroin. It is really stupid.
And when you’re already rich to make your money by encouraging people to get rich by trading? And then there are people on the TV, another wonderful place, and they say, “I have this book that will teach you how to make 300 percent a year. All you have to do is pay for shipping and I will mail it to you!”
How likely is it that a person who suddenly found a way to make 300 percent a year would be trying to sell books on the internet to you! It’s ridiculous.
About boards of directors:
Buffett: I've been on 19 boards, and I've never seen a director to whom fees were important object to an acquisition or a CEO's compensation--members of compensation committees act like Chihuahuas, not Great Danes or Dobermans. I hope I'm not insulting any of my friends who are on compensation committees.
Munger: You're insulting the dogs.
About GME:
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.
It's not generally noticed by the public, but clearinghouses clear all these trades. And when things get as crazy as they were in the event you're talking about, there are threats of clearinghouse failure. So it gets very dangerous.
"Free" brokers:
Robinhood and other brokerages catering to novice individual investors are really supplying “gambling services” and make money in a “dirty way,” Munger said, according to Bloomberg.
It’s most egregious in the momentum trading by novice investors lured in by new types of brokerage operations like Robinhood.
I think all of this activity is regrettable. I think civilization would do better without it.
No one should believe Robinhood trades are free. The frenzy is fed by people who are getting commissions and other revenues out of this new bunch of gamblers.
When you pay for order flow, you're probably charging your customers more in pretending to be free. It's a very dishonorable, low-grade way to talk.
Nobody should believe that Robinhood's trades are free.
On neo-liberal banking deregulations:
People really thought that giving a predatory class of people the ability to do whatever they wanted was free-market enterprise. It wasn't. It was legalized armed robbery. And it was incredibly stupid.
The whole world is better when you don't reduce engineering standards in finance. We skipped a total disaster by a hair's breadth.
I'm a big fan of the people who took us through the crisis. I'm not a big fan of the people who caused the crisis. Some of them deserve to be in the lowest circle of hell.
About Ethanol:
I think running automobiles on corn is one of the dumbest ideas.
Ethanol is quite possibly the stupidest thing ever invented by rational people. The ultimate social safety net -- which is a very good idea, by the way -- is cheap food, and ethanol production is destroying this. It was a monstrously stupid idea like I haven't seen before.
About Bitcoin:
It’s just dementia. And I think the people who are professional traders that go into trading cryptocurrencies, it’s just disgusting. It’s like someone else is trading turds and you decide, ‘I can’t be left out'.
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