Friday, December 16, 2005

Candid as ever: Charlie Munger, Warren Buffet's partner in Berkshire Hathaway.

Charlie Munger is as candid as ever in this interview of his (given sometime during this week). Some of the highlights of the iview are:

1. Supply of "Cigar Butts (Deep-value stocks)" almost dried.

2. A lot of people with high IQs are terrible investors because they've got terrible temperaments.

3. Our standard prescription for the know-nothing investor with a long-term time horizon is a no-load index fund.

4. On Efficient Market Theory - Markets are efficient enough, so it's hard to have a great investment record. But it's by no means impossible. Nor is it something that only a very few people can do.

5. Investing in Emerging Markets - Different foreign cultures have very different friendliness to the passive shareholder from abroad. Assuming China growslike crazy, how much of the proceeds of that growth are going to flow through to the passive foreign owners of Chinese stock?

6. On US trade & budget deficit - As [economist] Herb Stein said, "If something can't go on forever, it will eventually stop." But knowing just when it's going tostop is a very difficult matter.

7. On bubble in energy stocks - When it gets into these spikes, with shortages and uproar and so forth, people go bananas, but that's capitalism.

8.On Jeremy Siegel - author of "Stocks for the long run" - Jeremy Siegel's numbers are total balderdash. When you go back that long ago, you've got a different bunch of companies. You've got a bunch of railroads. It's a different world. I think it's like extrapolating human development by looking at the evolution of life from the worm on up. He's a nut case. There wasn't enough common stock investment for the ordinary person in 1880 to put in your eye. (Like i said, Candid asever).

For the full interview please see the link -

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