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I want to get to a question from Lee uh just the first name from this shareholder wrote in a question about chat GT GPT and artificial intelligence and the impact on Daily Journal the Daily Journal's business model and civilization at large says I'm not sure if you've tried to converse with chat GPT given all the rage in the news lately briefly it's artificial intelligence known as a language model it's trained on trained on a large data set of text like books and articles what are your thoughts on AI impact on Daily Journal's business and more broadly our civilization at large.
Well, I think artificial intelligence is very important, but is also a lot of crazy hype on the subject. Artificial intelligence is not going to cure cancer. It's not going to do everything that we want done. and and there's a lot of nonsense in it too. So I I regard it as a mixed blessing all this artificial intelligence.
Some people have used it in some things like insurance underwriting pretty well but a lot of people try and use it in ordinary things like buying office buildings or something. You know, I think that's way more. I don't think it's going to help anybody buy an office building. Not very much. Anyway, through through the lens of Daily Journal Corporation, um AI is something that we started uh experimenting with in the summer uh in the summer for certain types of writing of certain types of articles and it's something we're certainly tracking very closely.
I think in terms of um complex work, I think it's a it's it's a long way off. Uh but for many types of activities um especially routine things um I I I think we'll I think it'll be fascinating um to see how disruptive it is um over a relatively short time horizon for for many types of uh work and and and activities.
It'll disrupt. We had our big disruption when the technology kind of severely it adversely affected our publishing business and we have our opportunity in this new business but it's it's just a long tough slog. There's no short there's no royal road to success in what we're doing. Someone named Peter Ferlin wrote in from Oakville, Ontario, and he had a question that he asked he asked Chat GPT to come up with a question to ask you, Charlie.
And here's what ChatGpt came up with. Mr. Munger, you've spoken about the importance of avoiding mental biases in decisionm in your experience. What's the most challenging bias to overcome and how do you personally guard against it? So, I' I'd ask your answer to that question and then what you think of the question that GPT chat GPT wrote for you.
Well, what if I had to name one factor that dominates human bad decisions, it would be what I call denial. If the truth is unpleasant enough, people kind of their mind plays tricks on them and they they think it it isn't really happening. And of course that causes enormous destruction of business where people go on throwing money into the way they used to do things even though it isn't going to work at all well in the way the world is now having changed.
And and if you want a an example of how denial is affecting things, take the world of investment management. How many managers are going to beat the indexes all cost considered? I would say maybe 5%. Can consistently beat the averages. Everybody else is living in a state of extreme denial. They're used to charging big fees and so forth for stuff that isn't doing their clients any good.
It's a deep moral depravity. If some widow comes to you with $500,000 and you charge her one point a year for and you could put her in the indexes, but you need the the one point and so people just charge some widow, you know, a considerable fee for worthless advice and and the whole profession is full of that kind of denial.
It's everywhere. So, so I had to say and that was I I always quote Deamas a long time ago Deamos that's 2,000 more than 2,000 years ago and he said what people wish is what they believe. Think of how much of that goes on. And so it's of course it's hugely important and you can just see it. I would say the agency costs and money management there just so many billions you it's uncountable and nobody can face it who who wants to you want to keep your kids in school you need the fees you need the brokerage commissions you need this or that so you do what's good for you and bad for them now I I don't think Berkshire does that and I don't think we Garren and I did it at the Daily Journal Garren and I never took a time and salary or director's fees or anything.
And if I have business, I talk on my phone or use my car. I don't charge it to the Daily Journal. That's unheard of. It shouldn't be unheard of. And it goes on in Bergkshire and it goes out in the Daily Journal, but it we have an incentive plan now in this journal technologies and it has a million dollars worth of Daily Journal stock.
that did not come from the company issuing those shares. I gave those shares to the company to use in compensating the employees and I learned that trick so to speak from the guy at BYD which is one of the securities we hold in our securities portfolio and BYD at one time in its history the founder chairman he didn't use the company's stock to reward the executives he used his own stock and it was a big reward too well last year what happened ID last year made more than $2 billion after taxes in the auto business in China.
Who in the hell makes $2 billion who's a brand new entrant really in the auto business for all practical purposes? It's incredible what's happened. And so there is some of this old-fashioned capitalist virtue left in the Daily Journal and there's some left in Bergkshire Hathaway and there's some left in BYD.
But but most places everybody's trying to take what they need and just rationalizing whether it's deserved or not. Please like and subscribe. Thank you.
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