Munger Interview

[Crip1]

There's nothing in here that is revolutionary, particularly to those who follow Charlie Munger. But virtually every time I read/listen to Munger, I learn something. This 15 minutes is no exception.

 

 

https://www.yahoo.com/finance/news/charlie-munger-says-single-payer-healthcare-solution-225404021.html

 

 

The interviewer, clearly, does not know much about Munger as he was surprised on a couple of occasions by Munger's "frank-ness".

 

 

-Crip

[Jurgis]

Munger sounds annoyed like heck.

[Charlie]

Cool interview. Thank you!  :)

 

I don´t think he is annoyed.

 

An interesting question would be what Buffett is thinking about these great Chinese companies.

Is he afraid about fraud or the Chinese government? Why aren´t there more investments in China?

[Green King]

It's hard. I've looked. Also, China is in early stages there are not many great companies. I just looked again they look overvalued ATM. In retrospect, I did miss a lot of opportunities back in 2013 to 2014 period when I look at a few hundred companies. But I was just young and ignorant back then so maybe next time.

[Charlie]

"It's hard. I've looked. Also, China is in early stages there are not many great companies. I just looked again they look overvalued ATM. In retrospect, I did miss a lot of opportunities back in 2013 to 2014 period when I look at a few hundred companies. But I was just young and ignorant back then so maybe next time.!

 

Yeah, but they have Li Lu with a great track record. Probably for Berkshire the interesting companies are too small (except for Petro China which was a 10 bagger or so and BYD ;)).

[Jurgis]

Not being Chinese, I've looked at cloning BRK/Munger on BYD but even with them being invested I could not make myself trust that the company won't kick minority shareholders in the nuts some way.

 

Also I don't think (electric) car business is great even in China and I don't think BYD has a lot of magic sauce (or moat).

 

But I can concede that I might not know enough for very informed opinion.

 

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In the past Tencent was a great investment. I've done 2x or 3x when I bought it in ~2005 or so and sold later. Missed huge 100x bagger. It was always expensive.

 

BIDU and BABA are probably the well known moaty companies. BABA seems to be run for Jack and whatever, not really for shareholders. They already screwed shareholders once with AliPay. I don't know much about BIDU's governance.

 

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With big China cos there's always a risk that Party will ask them to bail out a failing bank or something. Like CHL had to invest into some bank because Party said so.

 

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If I had Li Lu's number, I'd just give my money to him.  8)

 

Anyway, like Charlie said, it's not supposed to be easy. Just buy FAA(N)G and be done with it!  8)

[Dynamic]

The electric vehicle (or new energy vehicle) market in China is being quite heavily promoted in polluted cities by the Chinese government and the sales are high compared to much of the world, but include plug-in hybrids and while it's the biggest EV maker in the world, it's not clear to me whether BYD has any enduring advantage over its competitors.

 

Also, the direct EV subsidies seemed to have side-effects in encouraging a plethora of tiny companies to rely entirely on them, so the Chinese gov't is withdrawing it and putting in a zero emission mandate, which has seen BYD's sales drop 34% but is hoped to cause consolidation in the EV market.

https://electrek.co/2017/05/08/byd-electric-vehicle-sales-drop-china/

 

China's EV market was 500,000, but the new mandate will make manufacturers gradually increase their percentage of ZEV sales over the coming years. This will force other makers to provide ZEVs. I don't know if this might hurt BYD in the long run or just be a temporary hitch.