Munger_Disciple

During Collison's interview, Charlie recommends evaluating investment managers using per dollar-year returns & to avoid using time weighted returns. Does anyone know what Munger meant?

During Collison's interview, Charlie recommends evaluating investment managers using per dollar-year returns & to avoid using time weighted returns. Does anyone know what Munger meant?

Article about Charie's philanthropy: https://www.wsj.com/us-news/education/charlie-munger-donations-blueprints-a539e390?mod=hp_lead_pos6

Who knows?

Thanks for the transcript. It seemed contrary to what Buffett used to say about his Berkshire stake in the past; that 100% of it would be distributed to charity within 10 years of his passing. If it is indeed the case that Buffett charities would keep operating for 100 more years, it may actually work out better for shareholders post Buffett given that there are now two Buffett children on the board.

I thought I heard Munger say in his last interview that Buffett (Charitable) Trusts are going to last 100 years. Can this be true? I thought Buffett's shares are going be donated to charity within 10 years of his passing but perhaps trusts will keep the stock and keep operating for 100 years?

The only thing I can think of is all the rates other than T-bills have gone down a lot recently and also today. So Mr. Market fears the potential loss of income for Berkshire on the cash hoard of $157B going forward. Also, the judge is set to rule today on the issue of concurrent trial related to the Haslam case. But I agree it is a bit strange.

Charlie changed my life. Of course his investing and business advice was great but for me most importantly he taught me & countless others how to live a worthy, productive life through his life as an example. And I try to emulate his example to the best of my ability (in most cases, in a poor way). There are so many lessons I learned from Charlie, but one that always stands out is: "When something is not worth doing at all, it is not worth doing well." In other words, don't clutter your mind and life with unimportant, unnecessary things, just focus your energies on the most important things in life. I also admired how Charlie prayed at the alter of rationality and approached every aspect of his life with it.

I love this quote from Charlie: I think life is a whole series of opportunity costs. You know, you got to marry the best person who is convenient to find who will have you. Investment is much the same sort of a process. I feel a sense of deep loss but then Charlie left us so much wisdom that he will forever be with us.

I love this Charlie quote on focus in life: "When something is not worth doing at all, it is not worth doing well." There will never be another one like him. True legend!

Very sad day. He was a father figure to me, and I already miss him.

Very sad day. I already miss him.

Very sad day. Charlie was a father figure to me. I had the joy of meeting him twice in person & he was just an amazing and a very wise human being. We will miss him.

I too only own FFH, no position in FIH. However I think there is a conflict between FIH and its manager FFH which also makes India investments on its own. If there is a new sexy idea, where would FFH invest? For its own account or FIH? Plus if I were an FIH investor I would hate to pay the excessive management fees based on NAV which is way higher than market price.

Personally, I don't think Fairfax should manage retail funds like Fairfax India or Africa. At a minimum, it is a conflict of interest between the mother ship & the fund. Fairfax could have just partnered with a pension fund or other institutional investor to make India investments directly without running a fund with high expenses. People like to compare Fairfax to Berkshire but I can't imagine Berkshire ever doing something like this.

They should base the fees on the lower of book value and market value of FIH shares, which also gives them an incentive to close the gap between the two if the shares are trading at a discount to book as they have been for awhile.

I pointed out earlier that governance is a major issue. Basically shareholders have zero say in how Google & Meta operate. The founders have super voting shares.

Apple is by far the best managed of the magnificent seven. I have heard from s/w engineer friends of mine that Apple doesn't grant stock options/ restricted stock grants to everyone, only to star performers. They tell me Google & Meta are very (excessively from a shareholder point of view) generous and there is a lot of fat at both these companies. I watched a video discussion with Apple CFO Luca Maestri & I can tell he went to Buffett school of frugality & management. Perhaps the best CFO in the world. And Tim Cook is a great CEO. I can see (belatedly to my detriment) why Buffett loves Apple and will most likely not sell ever even if forward returns may not be that good (kind of like Coke in late 90s) because Berkshire is sitting on a massive unrealized gain, loves the management & shareholder friendly capital allocation policies.

In addition to high valuations, the other issues with the mega tech companies are: excessive stock based comp (with evergreen option grants and repricing of grants to the entire work force), bloated work force with very high pay, poor allocation of capital (Google's Other Bets, Zuckerberg's Metaverse, etc.) and generally shareholder unfriendly governance & policies with one noteworthy exception being Apple. The other issue is that some point their growth has to slow; they are already massive companies trading at quite generous multiples. When the growth does slow, I think there will be a bloodbath as valuations will get reset. I mean Google & Meta already pretty much hoover up all the advertising dollars and at some point they can only grow GDP + may be a percent or two.

Yes! The higher return on bonds compared to just 2 years ago makes the index that much more expensive. You can get 4.5% on 10-year treasury bonds and probably 6% on high quality corporate bonds. So S&P 500 index earning 4% in comparison looks like a pretty bad bet. You would think that stocks should trade with an equity risk premium of at least 2-3% over 10-year treasury bonds.

Even at 24X multiple? That's the question.

I find tech investing incredibly hard. For me the hardest part is predicting what can happen in 5-10 year time frame. Businesses like AAPL, GOOG or MSFT which people think they can predict the business reasonably well are all trading at pretty high valuations. With the high valuation comes the risk that business won't pan out as predicted. And it is almost impossible to predict which new comer will be the next META or GOOG. A side question: Is it even possible to out-perform or even match overall market long term without direct exposure to tech?

That's a bizarre interpretation of my post. I talked about the mental model I use for FFH not its valuation.

+1 In a commodity business like insurance, mining or retail, there is a moat to being the lowest cost provider in the industry. Examples include Costco, Walmart, Geico, etc. I don't think FFH's insurance business has much of a moat. At a 10,000 ft level, I view Fairfax as a levered bond fund (leverage coming from float and debt) managed by a group of smart bond guys who have consistently delivered. The rest of the investments are hit and miss; sometimes they do ok, sometimes not. As long as they can underwrite below 100 CR and the bond guys keep executing, this will be a decent investment.