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Munger on BBC video


Guest kawikaho
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I like what he has to say about damned near everything.

 

Perhaps it is because we have seen countless Buffett interviews and far fewer Munger interviews but I really get a heckuva lot more out of 10 Munger minutes than 10 Buffett minutes. He flies effortlessly from topic to topic, coming off as an expert on each of them, complete with historical perspective.

 

Thanks for posting.

 

-Crip

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I thought he was rather kind to Greenspan. Surely it is a stretch to call him a hero! And, I thought Greenspan tried for many years to defend his action before admitting his error.

 

CM's comment about Wall Street's locker room culture is much more to the mark. It is this type of mentality that spurs people to drive dangerously without consideration for the safety of others. Pure juvenile behaviour.

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Instead of blaming Greenspan he talks about idiots that were allowed to be in control, and he also talks about the mess that was created by deregulation of financials.

 

Putting it together, it looks like Munger thinks the purist free market types came to power and wrecked everything with their ideology, and that those people are idiots.

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Instead of blaming Greenspan he talks about idiots that were allowed to be in control, and he also talks about the mess that was created by deregulation of financials.

 

Putting it together, it looks like Munger thinks the purist free market types came to power and wrecked everything with their ideology, and that those people are idiots.

 

Given that Greenspan was one of the key people in control, and a strong proponent of deregulation and free markets, Greenspan surely fits the description of the idiots he's referring too (although the biggest arrow seems to be pointed at the Bush administration). That's why I don't get the "hero" bit.

 

I agree there's lots of blame to go around but Greenspan a hero!! ???

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I agree there's lots of blame to go around but Greenspan a hero!! ???

 

Munger is saying that Greenspan is a hero for admitting during recent testimony on Capitol Hill that he had "made a mistake" in trusting that free markets could self-regulate.  He is a hero for saying he was wrong when he was considered the most powerful man on Earth by some.  It is completely contrary to the locker-room mentality that creates these messes and in keeping with the type of rational thought required to prevent them in the future.  While most in his position would stick to their guns and focus on legacy building for the history books, he takes a bullet for the greater good.  For that he is indeed a hero.

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I agree there's lots of blame to go around but Greenspan a hero!! ???

 

I thought that was a very funny backhanded comment. 

 

He basically called Greenspan a horse's ass and then complimented Greenspan in an exaggerated way for actually admitting it.  ;D

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Fwiw, I think txlaw has it correct.  Munger, to his credit, is highlighting how rare it is for someone (anyone) to acknowledge they are wrong.  It is particularly difficult for someone of Greenspan's public stature to acknowledge such. 

 

IIRC, at the WESCO mtg. in May 2008 (not this year...when I missed the mtg), Munger addressed Greenspan's approach and, paraphrasing, basically said that Greenspan had an ideology that worked well and figured it would work well no matter to what extreme it was taken....IIRC, there was something about axe-murderers.

 

This was before the total meltdown but after the Bear meltdown. 

 

I give Munger credit for giving Greenspan credit for simply saying: "I was wrong". 

 

That said, the key to the success of Munger and Buffett is that they typically know they're wrong before they're wrong.  How's that for some Greenspeak?! ;)

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  • 3 years later...

I don't fully understand what Munger meant by Locker Room mentality with the investment banks.  If someone could please explain this I would really appreciate it.

 

I haven't seen the exact quote, but I have heard Charlie mention this in the past. My understanding is he is referring to competitve individuals that will try to win at any cost. In the short run they may be great at what they do because they are hard working and intelligent individuals. However, their competitive drive eventually becomes their downfall as they can't stand to see others outperforming them.

 

In essence he is saying don't worry about what others are doing. Think about what is the optimal long-term strategy. Think of Chuck Prince at Citi.

"As long as the music is playing, you've got to get up and dance, we're still dancing."

 

 

 

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Yes, this is exactly what it is like. I work at one of these large investment banks and that is being pushed onto you every single day. The other thing at least in my firm is we are being pushed to grow market share, even at the expense of margins. Just lock in the customer first.

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I have always wondered why most companies will spend all their efforts to get a new client and not spend a dime to service their existing clients. 

example: Has your telephone carrier ever called you and said, " We can save you money over what you are paying us now?"

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