Billionaire investor Charlie Munger is not here for the current state of global financial markets. The 97-year-old is the vice-chair of Berkshire Hathaway and Warren Buffet’s closest confidante. He emphatically stated his position during the Sohn Hearts & Minds Investment Conference in Sydney, Australia, The Sydney Morning Herald reported.
“The dotcom boom was crazier on the valuations even than we have now. But overall, I consider this era even crazier than the dotcom era,” Munger said, adding today’s environment for investing is “a little more extreme” than he’s seen in the past.
A long-standing critic of cryptocurrencies, Munger applauded China’s decision to ban them and said he wished they didn’t exist.
“I’m never going to buy a cryptocurrency. I wish they’d never been invented,” Munger said. “And again I admire the Chinese, I think they made the correct decision, which was to simply ban them. In my country, English-speaking civilization has made the wrong decision.”
Listen to GHOGH with Jamarlin Martin | Episode 74: Jamarlin Martin
Jamarlin returns for a new season of the GHOGH podcast to discuss Bitcoin, bubbles, and Biden. He talks about the risk factors for Bitcoin as an investment asset including origin risk, speculative market structure, regulatory, and environment. Are broader financial markets in a massive speculative bubble?
He added he thought China was also “right to cut back on some of the exuberances that come… with capitalism” and said crypto inventors “are not thinking about the customer, they are thinking about themselves.”
“I just can’t stand participating in these insane booms, one way or the other. It seems to be working; everybody wants to pile in, and I have a different attitude,” Munger continued. “I want to make my money by selling people things that are good for them, not things that are bad for them.”
The U.S. stock market’s valuation is extremely high, which makes it more difficult to invest in companies that would turn a profit in the long-run, Charlie Munger said – speaking of the strategy which has helped he, Buffet and Berkshire be so successful.
“You want companies that have high earnings on capital and have a durable competitive advantage, and if you can add to that they’ve got a good management instead of a bad one, that’s a big plus too,” Munger said, according to the Australian Financial Review. “But what you’ll find is that the great companies of the world have been discovered. They’re very expensive to buy.”