Charlie Munger – Warren Buffett’s right-hand man and longtime business partner at Berkshire Hathaway.
At his annual meeting at the Daily Journal in Los Angeles, he said that “we are facing very serious problems.”
Munger is the chairman and director of the Daily Journal. He noted how many risks investors take, especially when investing in China.
“In China … they like to gamble with stocks. It’s very silly.” – Munger shares. “It’s hard to imagine anything more meaningless than owning Chinese stocks.”
In the US alone, investors face risks from the economic effects of COVID-19 to political uncertainty over the upcoming presidential election. Also, the US Treasury has announced that the deficit has increased by 25% in the first four months of 2020 to $ 1.06 trillion. But Dow Jones and S&P are breaking new records.
Munger also expressed his dissatisfaction with the EBITDA indicator, saying it was a false measure of profit. “I don’t like investment bankers talking about EBITDA,” the business partner said.
For him, the metric does not accurately reflect how much a company earns, as traditional reports do.
He cites the Uber example of how they rose last week just because they raised their EBITDA target.
But it’s not all that bothers Munger. He fears that the innovation boom he has experienced throughout his life may lose momentum.
“I don’t think my generation has gotten the best of all technological change,” says Munger, who is 96. Medicine has dramatically improved almost nothing, and inventions like air conditioning are thought to improve living standards. He adds: “I don’t think we will see much improvement after we have invented almost everything.”
Investors from all sectors expect Munger’s appeal every year because of his wisdom and experience. He is considered to be one of the best investors and business entrepreneurs in history. Prior to joining Berkshire, Munger was involved in an investment partnership that carried 20% on an annual basis from 1962 to 1975. At that time, the S & P500 had an average return of 5%.
Trader Martin Nikolov