Charlie Munger Daily Journal 2023 Annual Meeting: Alibaba Big Mistake!

My thoughts on Charlie Munger's gems of wisdom at the Daily Journal Meeting on February 15, 2023. Add me on Instagram: michellemarki

Timestamps:
0:00 Intro Charlie DJCO 2023
1:28 Alibaba Is Charlie's Biggest Mistake
5:25 Charlie On TSM, Tesla, and Crypto
9:11 Daily Journal Is Not A Small Berkshire
9:45 Charlie's Hilarious Answer To Adam Mead
10:31 Charlie On The Secret To Life

My mind was blown when Charlie said that Alibaba (BABA) was one of his biggest mistakes, and I share my thoughts on this breaking news. Maybe in all of Charlie's hangouts with Mohnish over the last couple of years, Charlie folded his bridge hand and admitted defeat. As wise as Charlie is, he's still only human.

When there was a question about if Charlie destroyed a good idea this year, he said he destroyed a bad idea in Alibaba. Charlie said something to the effect of, "when the internet came in it over-charmed people those who were leading in online retailing, but I didn't realize it's still retailing. It may be online, but it's still retailing, and I got a little out of focus. That made me over-estimate the future returns of Alibaba. I like rubbing my own nose in mistakes to avoid making the same mistakes."

So it begs the question (see my YouTube community poll), did Charlie Munger vis-à-vis Daily Journal sell some or all of BABA in Q1 2023? Because as of the recent 13F filing, DJCO still owned BABA in Q4 2022. If it is such a huge mistake, you might think Daily Journal might go for some more tax loss harvesting with BABA, which may offset gains from their tremendous BYD investment. We shall see if April makes a fool out of many BABA bagholders when DJCO's next 13F comes out by then.

Even though Charlie is 99 years old, he was refreshingly well versed in tech. He talked about how he's not sure if Intel will catch up now that they've fallen behind in the semiconductor industry. Charlie claimed to not know semiconductors all that well and dodged a question about why Berkshire reduced their Taiwan Semiconductor (TSM) stake by 86% in Q4 2022, but said that for a younger person who understands TSM it could potentially be a good investment.

Charlie threw shade at a number of things, including at Tesla by saying how they've had to lower prices in China while BYD has raised them on their electric vehicles and produced something like $2 billion in revenues. Clearly Charlie believes BYD is superior to Tesla and said Berkshire's $270K investment in BYD turned into $8B or $9B!

Charlie relishes every opportunity to dump on crypto by referring to it as "crypto crappo." He believes it should be banned and is ashamed that the US government has allowed it to exist, whereas he admires the Chinese leader for banning it, "not in my China." In a recent February opinion piece in the Wall Street Journal, Charlie scathingly wrote "it’s a gambling contract with a nearly 100% edge for the house."

Charlie said, "some people think [Daily Journal is] a small Berkshire and it'll double like rabbits you know, of course it's not small Berkshire. I'm 99 years old for chrissakes."

My friend Adam Mead, the author of The Complete Financial History of Berkshire Hathaway and professional investor, asked Charlie about his senescence concerns, and Charlie said that he is shrewder at age 99 than he was at age 71, but his "sex life is a different question." HAHA!

Another friend Alejandro Salcedo asked Charlie to expand on the secret of life in having low expectations. Charlie answered, "well yes, you climb as hard as you can, advance one inch at a time, that's the secret of life. Always somebody a little nuts succeeds. For every guy who succeeds, there's 1000 failures."

I also love how Charlie said that he was lucky to have taken to the concept of "deferred gratification" early in life, suggesting it is what separates good investors from lousy investors. Becky Quick said she might try the marshmallow test on her kids, a kind of test likely a young Charlie would have aced.

What'd you take away from Charlie at this year's meeting? Let me know in the comments, I'd love to hear from you!

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