It’s annual letter/meeting season and if you follow Munger or Buffett at all, you might already know what this is about.
So first Munger, then Buffett.
The Daily Journal annual meeting was held last week. Charlie Munger is the Chairman and always gets peppered with random questions unrelated to the company. There are some good questions, some repeat questions get asked every year, but Charlie’s answers are great and often entertaining.
Of course, the downside to the random questions at these meetings is that you really have to read the entire thing to find the real nuggets. Thankfully, a couple people recorded the meeting, transcribed it, and shared it for the rest of us to enjoy.
I’ll share one (don’t want to ruin the rest for you). Links are after the quote:
Of course, I’m concerned about the rising level of government debt. This is new territory for us, and new territories probably has some danger in it. On the other hand, it is possible that the world will function more or less pretty well, even with a very different
pattern of government behavior than you and I would have considered responsible based on history to date.
Of course, if you look at the inflation we got out of the last hundred years when the announced objective of government was to keep prices stable. Now the announced objective is 2% inflation. Well, what the hell’s going to happen? Well, the answer is, we don’t know. But isn’t the way to bet that it’s going to be…inflation over the long-term is way higher than 2%? I think the answer is yes.
But I think that we have learned from what has happened in the past that macroeconomics is a very peculiar subject and it doesn’t work like physics. The system is different in one decade than the system that was present in the last decade. Different systems have different formulas, but they don’t tell you when systems have changed, and when the formulas have to change.
So I don’t expect the world to go totally to hell…
On to Buffett.
This weekend – Saturday to be exact – is the official release date of Berkshire’s 2017 annual letter. It’s a must-read for Buffett fans, value investors, and BRK shareholders. There is almost always something to learning from it.
You can find the 2017 letter at the Berkshire website.
If you happen to read the transcript or letter mentioned above this weekend and aren’t sure what to look for, Research Digest highlighted a study on wisdom with one place to start:
Proponents of teaching wisdom suggest that this teaching could be framed around exemplars – wise figures from the past. Grossman is in favour of this, but suggests that the road to wisdom comes not from treating these figures as peerless exemplars, but as successes within a social context, and by comparing and contrasting where their wisdom apparently reached its limits and why. This is captured by the Solomon Paradox, named after the great Jewish king who also boasted of his riches and ill-prepared his son to succeed him. Grossman argues that exploring these foibles and failings – and whether, in their historical context, they were as great a failing as we now assume – leads to intellectual humility and a sense of a bigger, more complicated picture.
- Global Investment Returns Yearbook 2018 (PDF) – Credit Suisse
- Inflation Is a Bigger Danger to Stocks Than Rising Rates – B. Carlson
- Will Quantitative Tightening (QT), Which is Deflationary in Theory, Be Inflationary in Practice? – 13D Research
- Why Markets Have Gotten So Jumpy – N. Irwin
- Tulip Mania: The Classic Story of a Dutch Financial Bubble is Mostly Wrong – The Conversation
- The Abnormal Environment – Dollars and Data
- We Forget that Everything is Relative – Behavioral Scientist
- What Muhammad Ali Can Teach Us About Success and an Authentic Life – R. Greene
- Why Decentralization Matters – C. Dixon
- This Company Built One of the World’s Most Efficient Warehouses By Embracing Chaos – Quartz
- From Imitation to Innovation: How China Became a Tech Superpower – Wired
- Quantum Computers are Finally Here. What are We Going to Do With Them? – MIT Tech Review