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Charlie Munger may be best known as Berkshire Hathaway's vice chairman, Warren Buffett's best friend, confidant, and business partner for six and a half decades. But Munger was also a giant in his own right. A scold of corporate excess and greed, who preached to a large flock of devout followers about how to get along in investing and in life.
A Renaissance man, Munger modeled himself after none other than Benjamin Franklin. He studied mathematics, physics, meteorology, and engineering. All before attending Harvard Law School. He trained himself in subjects as diverse as psychology and architecture. Munger passed away at the age of 99, just one month shy of his 100th birthday and two weeks after our last interview with him.
Tonight, we bring you a look back at the wit and wisdom of Charlie Mer. Hey Charlie, first of all, I just want to thank you for inviting us to your home today and for hosting us here. We appreciate it. Well, I hope it'll be interesting. Certainly a peculiar example of one life. It's interesting that a man who started out to be a lawyer ended up with an identity that's more like a gurus than a lawyers.
I I called you a lawyer once and I think that was the most irritated you've ever been with me. um because that was how you started things but you really have studied every field out there and tried to yeah sure to take things from different studies and different models in life. Did you did you go about doing that intentionally?
Of course I could see the power of it. When did you figure it out? Well, it came naturally to me and I was what I would call naturally arrogant and I wasn't that good a mind. You know, I was in the top 1% but not no prodigy. So, I never would have succeeded in a field that required a mind to be that of a prodigy.
But it was a much better mind than ordinary people had. And I recognized that quite early and I just played the hand I was dealt in order to get as much advantage as I could. When did you recognize that? Were you a child? Very young. Yeah. I when I was taking courses in grade school, I was often revising the textbook and the course in my head to make it more correct because I realized the professor was doing it wrong.
What kind of things would you recognize that they that they were doing wrong? They had some crazy idea. For instance, my Latin teacher was a maladjusted woman who was a devote follower of Sigman Freud. And I recognized that Sigman Freud was a horse when I still first read him when I was in high school.
And of course, it was an odd little boy whose Latin teacher is teaching him Freud. But that was she was peculiar and so was I. And of course when I read I bought the complete writings of Sigman Freud from the American library. It was one big book and and and I went through it very laboriously and I realized he was a goddamn lunatic and so I decided I wasn't going to learn that from my Latin teacher.
What? And and that's the way it is. That's what I went through all my life trying to turn every teacher into my Latin teacher. Just a poor fellow. I hadn't quite learned to understand it right yet. Now, I didn't always succeed. I had some very unusual teachers. The best teacher I had in my life was Lon Fuller.
Well, he was the best contracts teacher in any law school. And contracts is the best subject in every law school. At least I think it is because it integrates so beautifully with the new doctrine of an economics that came along with Adam Smith and all those people. And of course I could see the integration and so could this Lon Fuller was a damn contract teacher at he'd been the leading contract teacher in some other law school.
husband got him to Harvard by transfer which was rare in those days and also I could see in the Harvard Law School something very interesting when I went to the Harvard Law School it was in the immediate aftermath of a long long range in which 15 professors handled 1,500 graduate students this is unheard heard of.
Nobody had ever done anything like that. It It just morphed into that system and it did it early. And of course, when you have a system like that, it really helps to have a few big ideas that are strewn through the system that are useful and a sumberer that sees it. And that's what Lon Walter did. He really saw the whole damn.
He integrated the law and economics is what he did to some extent. And the reason he did is he wanted to know why do we have these kind of contracts that so obviously make modern civilization work. And he never he didn't explain exactly why, but I can sort of explain why to myself after hearing Lon Fuller.
Well, that's an ideal teacher. You you had this idea of mental models before you got to him, though. Yes. And I just naturally came to it and and but it was very much a unfull thing. I was just aruck by Lon Fuller. I have never been aruck by any other teacher in my whole life including some gifted mathematicians and physicists who did some remarkable things.
But Fuller really really had an he changed my life. He almost made me a law professor. I considered being a law professor, but then I and I knew I'd be pretty good at it. Did you keep in touch with him for a long time after? I never kept in touch with him. He was so remote a figure to me. He was like Moses or something coming down from the mountaintop.
And I was pleased he was there for ordinary and he he'd put it all in a book I didn't need on Fuller. That's the way I handled almost all my teachers. I didn't need him. And let's talk about Benjamin Franklin. Yeah. He's one of the framers of our nation. He very famously gave out very and he was a prodigy
and he was a prodigy and he trained himself in lots of different um disciplines and he selftrained himself with like two years of grade school education. This is a very remarkable thing. And when he found late in life that he needed something like algebra, he went back and pulled down the textbook and taught himself algebra.
How old were you? He just he was a very much a self-educated man and that was a very much an interesting story for that reason. How could a man who taught himself everything, you know, like Latin and it was just it was how could a man like that go into so many different fields and be the top guy in the whole country?
And weren't we lucky to have him? Yes. Yeah. No, all those five or six people whom we now consider the founding fathers have worn pretty well. But you found Ben Franklin when How young were you when you first came across what Ben Franklin had done? Well, I think high school. Yeah. And that's when you started modeling yourself after some
I don't know when I started modeling myself after Frank Franklin but I certainly tried to model myself a little I like the mixture of of financial life and regular life and I and I couldn't copy I didn't have any musical ability and so Franklin was he he played four different musical instruments, one of which he invented.
Well, this is a lot of musical ability that God simply left out of me. And so I I don't I can't do it. So I never made any effort to imitate Franklin's musical ability, but any other ability he had, of course, I tried to imitate. You started out in college at the University of Michigan. You were young when you went there because you had skipped some time in grade school and you went for mathematics.
Why did you choose mathematics? Because I could get an A in without doing any work. That's why I took mathematics. And then you shifted with time. Yes. You did that for a couple of years. Yes. And then World War II interrupted things. You were 17 still when decided that biology was not the proper science to handle a war or I geology was not the proper science to handle any war and that obviously I had to start with physics so I took physics
and then you focused on well I didn't have taken very much because as soon as I'd mastered the first part of physics I actually entered the air corps as a private right? And marched around in some field in the middle of winter and slept in a tent. And I must have say it was pretty damn unpleasant to be outside in the winter sleeping in a tent.
Look, this is the middle of November. We're in Southern California. Look at it. Yeah, this is pretty nice. Yes. And and of course, I noticed that it was like that. And it wasn't like that in Omaha at the time. I was at Caltech and it was the middle of the winter and and and it was like this and so I naturally thought this is better.
Yes. I understand why you moved permanently. Yeah. Well, you understand why the whole nation moved, right? It moved south and west is what it moved and continues to do so. Yes. Yes. So Charlie, you were born on the first day of 1924. You have seen a century of of history and I wonder do you ever stop?
Not only that, I lived in the aftermath of a previous previous century of history. In fact, you can argue that about 90% of the progress of man has happened in civilization has has occurred in the last two centuries. and that I lived in the immediate aftermath of one. And it was a very important se cemetery.
That cemetery that ended when I was born because in that in that century we figured out so very very much that was quite important as a start. If you stop to think about the technical revolution, it happened in that century. That's when they opened all these coal mines and created all these steam engines and and and so on and so it was just and of course that what brought the economic system up.
So man had enough leisure, had enough time to think when he wasn't just getting enough food to eat. And so it was an amazing time to be born and to be born in the place in that century where all the growth was going to occur, the United States, the heyday of the British Empire, which was probably the most important empire that ever existed on earth.
Ended about the time I was born, the heyday. You look at you're a stamp collector. Pretty much the whole earth was colored red or pink for the British Empire. But it was a little stanky island in the North Sea and and and that's what they and they created the most important civilization ever created.
Now they borrowed heavily from the Greeks and the Romans and so forth to do it, but they did it nonetheless. and and it was a very interesting thing the idea that a system where 300 families owned half the land in England and when the winter then the when the summer came in England they went to London and ran the country as a matter of noble bless oblige that able to make the best of that 300 families and make them important parliament Ontarians and that was their civiliz that was the way in which they took civilization and their part of civilization and to total leadership of the technical revolution.
And then you come along and 192 after that my father grew up in a world where if you wanted to go around Lincoln, Nebraska, he had to use a horse and buggy. There was no car. There was no broadcasting. There was it was a very different world. the railroads were primitive and and that's what he grew up in.
So it's but the last two centuries created almost all the growth. Before that everybody's not everybody but like something 80% of all people are farmers and what's happened over the last 100 years has been pretty remarkable too. Uh yes in the 100 years I've lived has been even more remarkable. That's pretty much all of modern biology, modern medicine and modern industrial civilization, modern chemistry.
Just imagine what the world would be like. We had photographs for a hundred years before we had modern chemistry. And but it was done by a guy was a natural very good chemist. But nonetheless, and he created a mighty company, a great growth stock and so forth, and it finally wiped out the shareholders in bankruptcy.
Eastman Kodak. Yes. Eastman Kodak, which is an amazing story that that could happen. And of course it helped me because if somebody something as somebody as brilliant as old Eastman and somebody who hired as much many brilliant people as old Eastman did could take the company into bankruptcy. I figured that lesser people could easily take big companies into bankruptcy eventually in spite of their best efforts.
It wasn't like Kodak didn't try. They hired the most brilliant graduate students. They gave them all kinds of time to think. They they learned everything any important man on earth learned as quickly as they could and so on and so on. And even so, they wiped out the common shareholders and that taught you what as an investor as a business.
Sure. And I was going to be a common shareholder someday in some company. And I it would help me to know that it was very easy to wipe out the cow shelters even a great company run by a genius. I mean that's that's an argument for being diversified but no not no I that it's yes it is an argument for being diversified
but that's not really what the lesson there's some argument for being diversified but there's also some argument for being non- diversified and the argument for being non-diversified is better for a few people than the argument for being diversified so That the lesson I would take out of that is to be diversified.
That's not the lesson you took out. What's the lesson you took out? Well, it was going to be very difficult to be excellent enough at anything to make any money. That's the lesson I took out of it. And then and I could look around me and I was lucky there too because my father, one of my father's two best friends was a guy named Eddie Davis Senior.
And Eddie Davis Senior was the leading urologist probably in the United States at the time and just working as a private physician who taught who taught medical students urology without charging for his teaching time because that's what doctors did in their days. They were volunteers at the medical school and they also furnished free medicine to their colleagues whom they knew.
So it was like a cartel against the rest of us and and courtesy to the noble profession. And if you read the hypocratic oath carefully, which I'm the kind of a fellow who did, it doesn't sound like nobility. What what what what he was telling the doctors to do was to keep their secrets away from the people who might compete with them pract practicing medicine.
Do not reveal the secrets of our craft outsiders. That's the great rule of hypocrates, not do no harm. Well, he he gets credit for that one, but what he really what he really emphasized was don't tell anybody else how to do this. The people who have the modern system of this are the magicians. Okay?
They have kind of a code of not telling the publicly how they're doing the tricks, right? And for a long time, I could not understand how they turned those women back and forth into apes or panthers and so forth in Las Vegas, right? And I could smell a panther and I knew panther smell. And I thought that is a hell of a magic trick that they're they're they're fooling my sense of smell.
And I couldn't figure out how the hell they were they were doing it. I could figure out how they were fooling my sense of smell. They were bringing in panther smell, but they weren't. But they also brought in they turned the women into panthers and back into women. Yeah. And I couldn't understand how they're doing that.
And when it was finally explained to me by some guy who broke their code like the code of Hypocrates, don't tell the outsiders our tricks. What they had is they had little slats of mirror that slid out of little slats of bamboo. And by using those little slats of mirror for French button would sloo out
it would show you a different usually show a different image. And it was just very it was a clever goddamn contrivance to fool the eye of and mind a man. But you saw and smell a woman turning into a panther. I never saw that. A tiger more often than a panther. Yeah. And but that's the way they did it.
Let me ask you about the Great Depression. You were just a child then. I I know your family struggled. I Yeah, but I was an unusual child. Yeah. And I was curious and I was I saw what was happening. And it was just clobbering my family everywhere I looked. It wasn't a little clobber. It was a major clobber.
What happened? Clober. Clobber. Well, my mother had two sisters and my father had two sisters. And all four of those sons-in-law who were my uncles got utterly clobbered by the Great Depression. One was an architect and just stopped building practically everything. and and he finally got a job doing drafting work for the county of Los Angeles and they paid him 1080 per month for doing that drafting work which was above what they would have paid an architect but not much above and that's what he was earning and then they passed the FHA rules and that was competitive civil service examination and he was a brilliant man And so he took the examination and came in first.
They made him chief architect for the FHA in Los Angeles, which is a huge program during the 30s to revive at least some building. And he he set the standards for that. He wouldn't let the subdivider get by with much. You know, there was a rule of how many electrical outlets there had to be in every bedroom.
and he'd make them put in the right number instead of the lesser number. And that was an important job. Builders under depression incentives being what they would naturally be and a good architect being what he would naturally be, right? And so the FHA, which was then fostering a great percentage of the total building that was going on in terms of houses, just said, "Guy, if you're going to build a house, you got to have so many out electrical outlets for a bedroom." Well, it was useful work my uncle was doing.
Yeah. And and he was enough of an architect that he could force in a little bit of grace, too, as well as the right number of electrical outlets. But one of the things he was very interested in was the plastered. And most people don't even know what the plastered is, even when they live in a building.
But if you got plaster that goes down into the ground, you get capillary attraction that sucks sucks a lot of water up into the plaster. It's not desirable. It doesn't always do that, but it sometimes does it. But it's a tiny little incremental cost to stick a a little thing on the bottom of the plaster as it comes to the sand near the ground.
If you put in that plaster screen, it can't suck that water out of the ground into your plaster. He made my uncle made everybody put in a plaster screen and saved all these houses as a result. Yes. Yes. Yes. And of course was a good example for somebody like me to watch that being done to put in the hard work early on and the extra stuff
what the extra thing that could be added a tiny incremental cost and would last for a hundred years. Wow. What you saw your family getting clobbered in all sides on the depression. What's that? That was one was an architect. Then was one was a builder who was broke. He had loans he wasn't even paying off from the 20s.
Boom. Blah bl bubble when he was a builder. And he became he made himself an appraiser. And finally he was best appraiser. And he made a good living too. But he had terrible years in the early 30s. and he had a terrible medical problem as one of his children died very slowly of men menitis and and it cost a lot of money.
He just couldn't pay it. He didn't he had not paid off that fully until the war came. So what what did he finally paid it off and and got quite prosperous in the Bosewar B. But he had a long period of his being utterly without money and all these he moved into a an extra house that my grandmother grandfather Russell owned and that at least didn't have to pay rent.
What What did all these impressions mean for you? I mean these are formed of years for you as you're watching this. I'm serious. Yeah. It's a little boy of his cousin who's the same age is dying next door and takes forever and cause a fortune and there's no money to pay the doctors, the hospitals, anything.
That's a ser serious growing up experience. And I turned the other side of me lived Maline Duffy, my great female playmate. and Maline and I were just inseparable, living side by side. And Maline Duffy and I were playing with this little dog that was a stranger to us when we were very young, but I can remember her and the dog.
So, it must have been nearly four years old and or four years old more or less. And that dog was it was inches away from my cheek, but it it bit her cheek instead of mine. Oh god. And they didn't quite get fast treatment in time. They got to it, but it was too late. And she died after terrible trauma.
So, and she was a very outstanding little girl who might have grown up to be a Becky Quake if if the world had been different. and and but she never grew up. So I'm sitting there doing two dead dead children. People don't realize how high the death weight was among children until about the middle of the century that preceded the one in which I was born.
And if you wanted, you know, in those days, if you wanted six ch three children, you had six and you shoveled three out of the graveyard before they even grew up. That was the system. That was mankind system. That's an awful system. It was an awful system. The agony of doing that was just you see the agony with somebody like Lincoln who loved his children so much and did not have a really functioning wife and for a man who has no functioning wife to have his children die one by one.
So he lost three out of his four sons. They never grew up and the one who grew up never had any children. As a little boy, I carried more money than all the other little boys. When I used to shoot agots in the schoolyard to make money playing competitive agots, marbles, I made sure you marbles, but agots were the most valuable marble.
And I never wanted to lose my good valuable collection to, you know, some guy was more coordinated than I was at shooting marbles. So, I would never play for stakes unless I could play better than the other boy. That's kind of been a habit you've made throughout life. You don't play poker with someone you're gonna lose with.
Exactly. Right. I didn't always arrange the circumstances. I just fell into them very frequently. But, but I got to play with competitors who were dumbs. People who weren't assessing the odds quite the same way. No, weren't assessing it. They weren't assessing the odds the way it was easy to to assess the odds.
If you learned, you just paid attention when the teacher was teaching you futation and combinations your second year in high school. The minute they taught me those things, I looked at them and the math teacher who was teaching me was a dumb cop. And of course, he didn't have any idea how they were important and why.
He just taught him as one more thing he had to teach to get through the textbook. And I immediately realized that these things were terribly important. It would do wonders for me if I mastered them. But my math teacher didn't know that. I mean, that's where you get to what I think what you call Lon Fuller.
Yes. He knew that if you really knew economics, you'd be a better decision maker. And that gets you quite a bit. Yeah. Yeah. That opens a big gate to a lot of interesting territory. The trouble with that territory is that territory is hard. Most of the leading economists are are very talented people.
It's hard to just get coherent on the subject, much less persuasive. And so it's a very difficult subject. And on the other hand, they're little subm markets where it's easy to figure out how to do well, and a lot of people figure out how to worm their way into those and stay there. A lot of what you do though also is picking your shots.
I mean, I I think you call it sit on your ass investing. Yeah. Where you wait for the big fat pitches to come in. You don't do a lot overtime because That's correct. You don't want taxes to whittle down or anything else along the way. No. And it's perfectly obvious that every intelligent person ought to do that.
And a lot of the intelligent people have figured it out. If you go into the decisions that the teaching profession makes with its IRA money Mhm. and it's pensioned money where it gets any choice. A lot of it is indexed and a lot of it is invested in shrewd shrewd investments held for a long time. So a a lot of what I do is being done now.
And that wasn't true when I was young. I couldn't just look at somebody else and see some I saw some people who had gotten rich by holding a few good things. So, you think it's harder to make money now? Well, that's a very interesting question and it's a very important question and of course it's harder.
It's so much harder you can't believe it. The people that have found it harder are the people that made Warren so rich. Ben Graham and his and his colleague Dodd in a damned adjunct course at Colombia. And by the way, Graham was invited into three different economic departments at Colombia on that full tenure track and turn him down.
He was that good at literature and math and so forth. both which is rare and Graham was was interesting is Ben Graham was polyomatic like the Davis is a different way and the same thing also somewhat musical and and and so something of a dancer like a dance left out of me and any Graham did that was was so interesting is that he taught that you should find a few good things and stay with them for a very long time.
But a long time to him was a few years. It wasn't a few decades. And he did that for like 40 or 50 years in a little investment partnership with incentives and so on. and his investors who are by and large not very rich did very well with him after he got his share. They got a good cut that was higher than what other people got after fees.
And so he delivered a valuable product and he taught you you got into things. It could be a lousy business but they were cheap enough. They're still all right if they had enough assets per share. So you're getting at least twice as many assets as you were paying for. Yeah. And he just floated around for the best available stuff among companies, good and bad.
Yeah. That was his system. And he had worked for 50 years. His clans had good good returns. Well, after he became so famous, partly with the help of Warren Buffett and Warren Buffett's success, everybody tried to do the same thing. And of course, as everybody crowded in trying to be a little Ben Graham, it got more and more competitive.
And that's what's happened now. And the lowhanging fruit that Ben Graham had a lot of because of the Great Depression has gone away. And the if you just try and float from one undervalued bad business into another and pay all the costs worth, it just doesn't work well enough for the people to actually put the money to be worth bothering with.
That's the way it works now. But in Graham's time, it was the best way there was. Well, your upgrade on that was to just look for good business. I I saw immediately that Graham the Graham was wrong. Right. And you look for and you had the real money was in the really great companies, right? Which carried you up and up and up and up and up.
Is it and whoever? But I did not really think that we'd ever have one that would in the so many hundreds of millions in Berkshire. I did not anticipate when Warren and I were starting with our little pitley start that we'd ever get to a hundred billion, much less several hundred billion. It's it's a it's it was an amazing occurrence.
What happened that you didn't anticipate? What what led to that success? But we got a little less crazy than most people and a little less stupid than most people and that really helped us. Then in addition, we were given this much longer time to run than most people because something kept us alive into our 90s and that gave us a long track from our little pedling start all the way to the 90s.
Those are the two things that really happened. And of course, we wised up over time. We got into better and better companies. We understood more and more of the bad things that could happen you and how easy they could creep in. And we avoid them avoided them even morely when we were old than we did when we were young.
And it all it all worked. I think back in 2015 for the 50th anniversary of Berkshire, you wrote um in the shareholders letter that among many other things um you had a $60 billion pile of cash at that point. You thought that that pile of cash would decline over time because you'd be able to buy more and more things.
Now you've got almost $160 billion in cash. Is there an opportunity for a really big purchase with that? And do you think you'll see one? Of course, there's an opportunity for a purchase a lot bigger than people can make who don't have as 160. We have $160 billion in cash plus a great credit rating we deserve.
And who in the hell has that? Not very many. Yes. But but but what it's going to be, I can't tell you. It it can't be anything too small because it doesn't matter how good it is. We're of a size now where too small just doesn't move the needle very much. So we have we need something big to come along and use up all our cash and some borrowing.
But who's more likely to find something than a guy who has 160 billion in cash? Plus a long history of buying bargains. I don't think it's hopeless. It may have to be done by some different people. You now that next time we may not be able just to squeeze a little more lemon juice out of the old lemons.
We we may be able to we may have to squeeze some new lemons, meaning new people may have to make the decisions, but who can make them better than somebody that has watched the early process all through all those years and seen how well it works and who starts with a little legacy of 160 million of cash.
So you're talking about Greg Ael, a Gain. Yes. any Ted and Todd or somebody not yet identified. The main trick that Burk Bergkshire shows is the power of what I call the Wooden effect. And Wooden was the most famous basketball coach of the whole era. and you figure out what the hell he really did, which of course somebody like Warren and me, we just automatically do it.
He concentrated about 90% of the playing time in seven players and everybody else was just a sparring partner for the people. And that turned out a great system for winning at basketball because you identified your best player and concentrated so much of the playing time on your best player and more playing creates better better.
You learn by playing in a way you can never learn just by shooting practice baskets. And so he concentrated all this playing time in his best players. Simple idea. That's what that's what Burggery did. Of course, it worked better and everybody's learned it. You've talked about Everybody would know it automatically if it were just a little more obvious.
If all of us had to make a living backing people in chess tournaments where there's very little revenue to pay anybody anything, we'd all recognize we have to get into the top seven players or something like that or have no chance of winning, you know, chess tournaments. Yeah. And everybody would be trying to play the wooden style to get the but in investment picking it.
People think anybody can learn it who just goes to Harvard or Columbia or something. Of course, anybody can't learn it. It's it's like chess or mechanical ability or a lot of other abilities. It's it's somebody who does it a lot and has a natural aptitude for it. Who's out? Who's the outlier? who gets the big results and that's what happens in the investment world.
Just a few outliers make make money. Now, we've also created a whole lot of people who get the reputation of being geniuses who who run venture capital funds and so forth and who do pretty well for themselves because they get paid so outlandishly, but they don't really get uh the bottom 80% of the people invested in venture capital would be at a raw if they didn't even look at it.
So they're just making the people who stumbled into Sequoia in the right year were different. They they got a long long run when Sequoia didn't try and grow and they got the advantage of milking Sequoia but that was rare. Nowadays everything is quite different. I do not think venture capital will win in the future the way Sequoia once did.
And I don't think Sequoia will win in the future the way Sequoia once did. It's too hard. It's too damned hard. Meaning that it's that they were there's too much failure, difficulty, accident. It it it it's really hard to have a stretch like Sequo has had as an investment firm. Now, everybody thinks if they sort of copy the method, they'll get the result.
Of course, it's like competing with John Wooden's example. You can compete in John Wooden's h example while you in fact do something else, which is what they're doing. And of course, but but they're they're not going to get something else. They're going to get lousy results, not wooden results. Yeah.
You talked about some of the joy you found with some of the investments Bergkshire's made along the way. I think Washington Post is a great place. like to happily enjoy extreme success accumulated with people who are extremely admirable. That's what Warren and I have gotten to do. Well, of course that's a lot of fun.
And a lot of the people at Sequoia have had a lot of fun because they've done a lot of similar things. What besides the Washington Post though, which is one you mentioned in a 1995 speech as being one of the best investments ever, what other investments have been some of your favorites? I'm I'm thinking of maybe a BYD or a Costco Costco.
Well, I've all favorites, but but again, BYD is a good lesson. I didn't find BYD. Leelu found by encouraged me. He he I I encouraged him to create this partnership and he found as a his occasionally would do a BYD a a venture capital investment in his early life. Something I would never do tell him to do anyway.
And and so he did one or two similar transactions that were a lot like Sequoia. He went in to be with him. It was so small that it would have been appropriate in an early stage Sequoia investment. And it was a public company, but it was just so small. It was barely a public company. And he went into it.
and this little nothing company headed by this we we could see that that two things about lunch on food. One he worked 70 hours a week and the other was he was a genius. And of course the idea of having somebody who was a genius and had all this mechanical aptitude that Warren and I lacked was interesting at least to me.
And so I was willing to take what was fiddling money by hunger standards and have some of it invested by Louis Lelu and L. But then he came to me and said one Jean Fu wants to buy a bankrupt auto plant in China and starting there going to the auto business. I said let us my god this is a horrible news.
I said it's a really dumb idea. Who in the hell's ever succeeded in creating a new auto company in competition with older companies that are as admirable as Toyota and so forth and Mercedes and people really know a lot about autos and have a big lead and I said let's talk him out of it. So we tried to talk Bonjan flu out of going into it.
He paid no attention to us. He charged into it. Well, this year he'll probably sell two billion automobiles at huge profits for automobile. Just mouthwatering to lead to delicious profits for auto. It's a huge stunt and and we Warren and I share the not Warren and I but I mean Lee Louu and I share the distinction of urging him not to do it.
Thank God he didn't take you up on it. Well, he did. That's what geniuses do. They don't listen and it's just amazing what he's done. Of course, he's been lucky, but but all the great records are partly work, partly talent, and partly luck. That's what you'd expect to win. Well, with this many people in the game of investment, of course, the big winners are going to be people who are get looks and who get work and talent and luck.
That's what we've had. What was interesting about Birkshire's history is what turned the first $300 million of Bergkshire net worth into the first $3 billion of Bergkshire net worth. Now, some people have now gone back and checked all my figures, but some people figured it out. But the way we the results we got in turning 300 million into three billion really quickly helped us a lot.
What was it? I don't what was blue chip stamps and seized candy and the buffalo newspaper and and the early insurance operations under AI Jane when he came to us. So it just everything worked at once and we made these unholy profits on out of these fiddling businesses that weren't that good and and was a very remarkable thing and there was some luck involved.
Warren has said that his worst trade ever was buying Berkshire Hathaway itself, the mills. Yeah, sure. What was your worst trade? Well, I my worst trade was buying a block from the Bunger family in Alibaba, which is a pretty good company, but I think it got overhyped and Jack Ma was made mistakes in dealing with the Chinese government.
I had some bad Everybody has some bad ones. Yeah, you have an off day. The greatest tennis player goes out there someday to the center court and has a bad day. It happens. I think people learn more from their mistakes sometimes than their bad days even. Yes. Yeah. But they what what really is knowing you can have a very bad day.
Do not live your life in such a fashion that a bad day can kill you. Which means what? When it comes to investing, making sure you don't use leverage. Well, they aim for the fences. It's like a hitter at baseball who tries to hit a home run on every pitch. The great home hitters do not remotely swing at every pitch.
That's halfway good. They they wait for one that they can really handle. And that's what great stockers do, too. How how do you know? Because I know leverage has always been something that you guys have shied away from using too much leverage in situations, but you also Yes. But it wasn't like we didn't use any.
Mhm. Insurance float gave us some leverage. That's why we went into it, right? And and averaged out over our lifetimes, we we've benefited from insurance float. But I guess the difference between not wanting to overleverage in a situation, but also knowing that if you think something's a real deal to really load up on it because you're only going to have so many great pitches, perfect pitches.
Yeah. We're not holding our cash for the boom that's going to come in 199. Yeah. We may end up that way, but but it may be have a different protagonist, but that may happen, which is fine. Mhm. I think some of the lessons in life um that you give people though, I guess it if it's so much harder to do things now, and you've talked about this, how for this generation, it's going to be harder to do things like buy a house, um make the same sort of money,
be able to get ahead in such ways. Of course, it's going to be harder to earn the same kind of percentage returns after taxes and inflation as this last generation of endowment managers earned. They've trained all these universities to expect a 6% re yield return because that's what they want in order to do what they spend as they want.
And but it is not given in the stars that a 6% annual return will surely be wonderful for the good investors of an era. I mean more broadly the great public investor may earn a lot less than 6% instead of a lot more. I I just mean for you know the average person who's looking at this thinking it's going to be harder to buy a house.
Is it is the American dream further out of reach for for young people today? Well, for some it is and for some it isn't. There also was never a place where anybody who got a degree in computer science got a salary, a cash bonus, and a block of cheap stock every year. Yeah. For free. Just floating in.
And sometimes in a very good company. And there are more companies like that that are offering benefits like that to people that are just starting out in computer science. So in some sense it's easier. So for some people it's easier. There'll always be something in a rich civilization. It's a little better than other people get as well as a little worse.
And all these people prospering today in computer science are in the right place and they're prospering more. Um Charlie, let's talk a little bit about bureaucracies because you have duly noted the problems with bureaucracies where whether it be a big company, whether it be the government. Have I ever?
Right. So how would you fix some of the bloated bureaucracies out there? Let's start with the federal government. That comes in my two hard pile. I can't tell you how to do that. That would be really hard because you got the problem a figuring it out and b getting it done and to solve both those paw problems are really that is really climbing a it's like picking the high pick on Everest and saying I'll waltz up there in a day you know you aren't going to waltz up there it takes several days to do
there was a presidential candidate who recently said that His solution for that would just be to fire everybody in the federal government whose social security under social security number ends with an odd number. Does that sound like a good way to fix it? No, it does not. It's too arbitrary. And it it may be that you needed some bigger fix than that.
And it may be you're never going to get it, too. It may be that it's just something like old age that we're never going to get rid of. But you are still a believer in the need for a government. Of course, I'm a I'm a If you get right down to it, what I am is a lover of the progress of civilization. That turns me on.
Oddly enough, the man whose name I bear, my father's father and my father's mother, both thought exactly the same way. and the great moral book. They took me to church in the Presbyterian church and all that and and but in Sunday school to take on lessons and all that. But when they really wanted to teach me something that which turned them on, it was the legend of Robins and Crusoe created by Daniel Defo.
They just love that guy creating a little English civilization on a goddamn vacant island and and that he could do it if he worked at it. And that of course that was the lesson they were trying to teach the grandchildren. And I was so amused by it. I could see immediately what they were trying to do.
And I could see immediately they were right. Of course, even if you're given a goddamn desert island, you turn into a civilization if you can. Civilization is important. I accepted all those moral lessons. Now, they never said, "This is what we're trying to teach you, ABC." But they did make me read and cruel.
Not just every week, but every night. Before I went to bed, I got a little dose of Robinson Cruso when I was a little tiny boy. And and of course, it was good for me. And of course, I never got over it. I still I'm still following Robinson Cros's method of going at life. That's what I did. I I imitated Robinson Croso.
My grandfather's teaching worked. That was a funny way to raise grandchildren. And I was the first grandchild on that side. And so I went down live there for weeks on end sometimes. And so I got doses of all these lessons from Sunday school and also from Robinson Cruso. And of course I really absorbed the Daniel Cruso lesson that I was lucky with my ancestors on the other side of the family.
I am very good at learning things from dead people. That's what everybody should learn. And so I I had one grandfather on the other side whose life never over overlapped mine. He was dead before I was born. But he was the richest man in his town. Had an immense old house. And he invited all the grandchildren to come in and stay every summer as many of them as he wanted.
And of course it's fun to go stay with a rich old grandfather, you know, who kind of owns the town. Yeah. And he was the majority owner of the main bank. and and uh his armies and grandchildren and the old man had been a pioneer. He'd come there as a pioneer and lost all his money in some bank failure in the east.
So from absolute nothing as a pioneer in Iowa, he had eventually made himself the richest man in his town and so forth. And he lived to be an old man as you can imagine. man. And what he loved to do was talk about the hard old days of living in a sod house, which is a cave. You moved into a cave in the winter.
How many people want to raise two little children in a cave? You can imagine yourself doing it. No. In Iowa, living in a cave with two little children. Well, that's what he gave his wife in marriage. And they from that poor start ended up with this huge success. and by the standards of his time and place.
And and he did that. He said he loved to talk about the early days because he was so proud of having survived them, the Indian wars and everything. And so he was pleased to talk about reminded him of all he'd survived. My grandmother Ingam wouldn't talk to the grandchildren about the early days. They tried to talk about them.
They said they were mean hard days. I don't like to remember them. Get them out of them. Don't no don't don't talk about it in front of me. And that was her. So she she wouldn't allow people to talk about the early days. But but grandfatheringham just talked endlessly about the inner days. Now how he surmounted all these hardships.
And what he taught the grandchildren of a fiscal nature. He says, you know, he says, people think I was the best farmland in the world and I own a lot of it. and it's a good place to have a bank and I own the main bank. And he says, "It looked pretty easy looking back at retrospect, but it was damned hard.
I want you to know." And he said, "And interviewing my life, what you grandchildren have to realize it was his version of Robinson." He taught every grandch opportunity, the world's not going to do it very often. And you're only going to get three or four of these in invitations to the pie counter. And when you get your invitation, for God's sakes, don't take a small helping.
He he basically said, "Liver up when you're when you're sure you're right." And of course, that's good advice, but be sure you're right is what makes it hard. How can you be sure you're right? Yeah. Well, but you can't That's the point. You can't do it very often. Just a few times in a lifetime. Even if you're a Grandpa Ingam or Warren Buffet, you only get a few trips to the Pon.
If you take out of Warren Buffett's life, the 10 most important trips to the pie counter, the the whole record would look like dung. It would be just worthless. And we knew enough to take a good helping. We were over to trip to the pie counter. Now we did take way smaller helping than we could have easily handled.
Bergkshire could easily be worth twice what it is now. And the extra risk you would have taken would have been practically nothing. All we had to do is a little more leverage that was easily available. In hindsight, you're glad you didn't just well from the potential risk. It's interesting example. The reason we didn't is the idea of disappointing a lot of people who had trusted us when we were young under a thing that left us.
If we lost threequarters of our money, we were still very rich, right? That wasn't true of every shareholder. Losing threequarters of the money would have been a big letd down. So, we were very cautious in dealing with our shareholders money. If Warren and I had owned virtue without any share that we knew, we would have made more.
We would use more leverage. I've had people say recently that because of the multiple wars that are going on around the globe right now, if you look at Israel, if you look at Ukraine, what's happening with Russia, people say that that we are potentially in the worst of times. If you look at China with the for the potential to take over Taiwan,
end up blowing up human civilization, which I love. so much and naturally I hate getting anywhere near the air. Imagine coming at life with the basic attitude of grandfather Munger and grandfather King. How little I want to see civilization blown up when it's been so hard to get it where it is from where it was.
Of course I don't want it blown up. You worry about that right now. Yes, of course I worry about it. You get out of your mind. I don't spend too much time worrying about because something I can't fix myself. I frequently put it on something I call my two hard file and then I just don't think about it.
So I would say atomic war is in my too hard file. I I think we're near I know we're nearer than I like being right now. Charlie Warren Buffett has said that he could fix the budget deficit problem in Washington by simply saying that any member of Congress couldn't be eligible for reelection if the national deficit was more than 3% of the GDP.
Yes, that kind of thing has been done in some places that got in enough trouble and it has worked if it isn't that it can't physically be done. He's certainly right about that it can be done whether it will be done neither one voter I can tell you but is that the proper situation is just setting up the right incentives to
well we may come to a place where we simply have to where we mismanaged to the place where it's obviously we have to go back to something that's more like that's more like Adam Smith and just take the inequality instead of the poverty. I like inequality a lot better than I like poverty. I mean, is this modern monetary theory that's gotten out of control at this point?
Do you worry? Of course, modern monetary theory. Modern monetary theory was that a level of indebtedness, which in the past would have happened only during a war, can now be routinely created to avoid any kind of unpleasantness from some families getting squeezed by hardship at the very bottom of the economic order.
I'm not sure the whole damn system works when some families aren't being squeezed at the bottom of the economic order. That may be our path to civilization and maybe the only one we've got. In that case, we just have to be financially responsible whether it feels good or not. Even whether it works well or not on a temporary basis, maybe we just have to do it.
And that may come, by the way. I mean, the most recent news is that 87 there was an 87% increase in the US cost for borrowing money over the last year. Um, interest rates are high. Yeah, but they've come down to ridiculously low levels. I was going to say they're high, but not high historically. Well,
talking e economically, yeah, when the English co console didn't lose purchasing power way back in the 1800s early 2 and a half%. Where did we get the idea that every endowment should get 5%. 5% real two or 3% inflation. That that that was written in the stars. I do not think it's written in the stars.
We we may have to do something so unpleasant that it looks like we're bringing back when and the Chinese said to the Russian peasants, "Earn your own grain by farming your own farm." Mhm. And if it fails, it's your problem, not mine, which is what they said. That was a hardship lesson at the time. It happened to worked.
It was It was It was It looked like a hardship lesson, but it really was an invitation to plenty. It was say, "Eat this spinach and it'll really be good for you. It's capitalism. And you've said all along that capitalism is the best system. Well, it works. If I like your little medallion and you like my $7 wristwatch, and we trade them, I may think your little medallion is worth X and you may think my little wristwatch is worth $7.
and we may work out some kind of a trade trade, but but it it just Well, if yours is worth $1,000 and mine is worth $1,000, we both made $1,000, right? Because that that's the way we value them. And the voluntary exchange hasn't goes to the government anything. The GDP just goes up by $1,000 a week.
I think stasis I'll exchange my watch for your your medallion and there's nothing else that'll do that except capitalism and do it automatically. You need capitalism plus somebody that creates a sound currency that uses a medium exchange. When you got those two things now you and I can have a simple system of exchanging watches for medallions.
and we both want to do it. It's something we can do. And it's it's just that was the stuff that that somebody like Ron Fuller, he was interested in that stuff and and in seeking out to make his own work more meaningful, he tried to understand it. And you I could see him struggling with it. And it was early in the history of economics of the disc discipline when this was going on.
Now the main ideas had been discovered but but the main ideas had not been discovered in the law schools. I mean Lon Fuller was one of the very few people had some vague understanding of how economics interwo with law. And of course, it's the combination that helped me do as well as I did in life. You've said that proper incentive structure should be set up for public policy, too.
That you have to think about it very carefully. If you want to go into public policy, you should go in and think about what the end results are going to be from some of your actions. that once you get in the in the business of saying to make it fairer so that the hardships of life are more widely distributed.
You can call it fairer, you can call it more generous. Mhm. But either way they mean the same thing. She they want the hardships of life to be mitigated. For some people, that means other people can sell things to the government that they use in helping unfortunate people. And people have a different idea about the government.
They think it's mildly cheating. The government's all right. It's a big dumb bureaucracy. Everybody's they're engaged in manipulating us so they can live well. Of course, we can flank a little so we can live well. And therefore it's okay to cheat cheat the government. And the cheating of the government is so extreme.
If I could just wave a wand and take all the cheating out of the workman's comp system, who cannot be in favor of the workman's comp system. He says if you're injured in course of doing your job that makes you a living and feeds your children and now you can't function for a while, the government will lift down and give you a lifting hand.
That's why they created compulsory workman's comp insurance because it was just seemed unfair that some people got so utterly clobbered by things that weren't their fault. And yet that wonderful system, it is rife with fraud. They puff their injuries up so they can get time off. They puff their injuries up so they can have extra cash.
They puff their injuries up so they can get permanent disability pay. And they have doctors and lawyers that help them do it. I mean mislead the government in unfair parents. So that in in an effort to to to cure an unfairness, we may find that there whole areas where the way human nature works, we have to endure more hardship and and the unfairness that comes with it.
There's the ordinary rich person who talks that way is talking because he wants to hold all his wealth and keep a great and make the disparity between his wealth and wealth of ordinary people get greater and greater. That's his ambition. But it doesn't work that he gets what he wants. The ordinary outcome of the wellto-do families is they go back to the mean.
If you looked at somebody as rich as the Rockerfellers, and that was really rich by the standards of ordinary human being. Even the Rockefellers will eventually go back to the main pretty close anyway. It just happens. It's there's a lot of misfortune out there that both fiscal and other kinds and it takes it down one after another.
Henry Ford and John D. Rockefeller were the richest people in the world when you were born in 1924. Today it's Elon Musk. Is it just new people who come through with the system? I don't regard Elon Musk as is truly that rich because I don't think it's sure that everything he's working on can work. I think he can get his ass handled to him and all those.
I would not invest in most autos myself. But you've been impressed by what he's built. Yes. Well, who cannot again? That's another lesson. What is the lesson of Elon Musk? The Musk is it's always an out somebody who has a perfectly ridiculous amount of money. It almost always has an element of luck in it.
He's been quite lucky in what he's picked to double down, double down, double down. And then he's used leverage so much that he's doubled down right to the edge of extinction. Maybe two or three times. How many people can go to the edge of extinction without stepping into it? Well, he's done it three times.
Maybe he's got six more any I I put Elon Musk in a two in a file. I never bet against him and I never bet with him. As far as I'm concerned, he doesn't exist. that my life works better if I treat the world as though we didn't exist. Uh let's talk just about a few cultural things. I I know reading is the one way that you say the only way people can really get smart.
You don't know anyone who's gotten smarter who doesn't read a lot. Well, yes. even the fiction of the world which includes a good deal of the Bible, the Bible and the Shakespeare and great novels and all that stuff. They people were good at painting pictures and painting and telling stories and people learn best when it when they learn a story.
Looks more like a piece of a life story. So it works. What are you reading right now? Well, and now as a my life is people know I'm a nut on books and they kind of like for Charlie's almanac or something. Yeah. So what do they do? They send me books. Gifts. So I get so many books in this house as gifts.
I no longer buy books. I just select from those that people give me. And I kind of like doing it. I think they kind of like do it doing it. It's very peculiar. I I think I heard that you've been binge watching Seinfeld. Is that right? Well, I've finally gotten so I've seen so many of the reruns twice that I don't want to see him a third time.
But I do like a bunch of self-centered people making the wrong decisions. It appeals to my It is ridiculous. It's utterly ridiculous. These feel people go out of their way to get insane worries and so on. And they solve some of their problems with humor. Yeah. It's a show about nothing though. It's Yes.
Yes. But it's it's not really about nothing. It's it's about the humor of life being used to make life durable. By kidding one another, which is what they're doing because they're really kidding the audience. They are amusing us all. In thinking about age, um, a lot of companies are getting rid of mandatory retirement ages.
Boards are getting rid of a lot of those ages, age retire, mandatory retirements. Um, but there are questions right now about whether Joe Biden or Donald Trump are too old to be president at 81 and 77 years old. Well, maybe true that everyone in America is too old to be president. That may be it may be just too hard a job the way things the way things have worked out.
We maybe this is like my cousin's my cousin's menitis. Maybe it's just a hand too tough to play. Maybe you're not going to be allowed to play it out. We don't know. You mean the age factor or No, I'm talking about the atomic warfare. The atomic warfare. Just the idea of being president at all. Yeah.
Yeah, if you got a big ruin of smoking country, it's it's not much fun being president. So, that is something that really you can say you set it aside and it's not worth worrying about, but I don't throw much time on it because I can't fix it, right? It goes into my two hard pile. Even if I had all the power, I couldn't fix it.
If you gave me the power to write all the laws of the world, I would sit down, even if it happened today, and try and help you write those laws. I would think it was the most important thing that mankind could possibly do because there's a lot of laws that are stupid and cause bad results. And if you know what they are, well, you just eliminate the ones you didn't like and put in ones that would help.
But I I think somebody like Warren, who naturally thinks the way I do on this issue, he'd be quite happy making laws for the whole United States. And you would too? Yeah. I'd feel it was my duty to try too. What would be the first to go or the first to get written in? Well, there are all kinds of things.
I would but the fraud just gets too much. I think you just have to take it out. But there are whole progressions that go out. It's just and there's whole half professions that goes out. Half the chiropraedic profession should go go should not exist. Chiropractors. Chiropractors. Yeah. Yeah, it's horshit
because it's not true. It's not going to help you. And I should say you're somebody who was chairman at a hospital as well. So you've seen a lot of this many chiropractors to Yeah. to try and do things they couldn't help. You've seen that with other modern medicine doesn't really allow it. a lactist to a chiropractor license does not allow you to practice medicine.
I can't give Becky quick penicellin because I'm a chiropractor. Right. Right. But I could if I were a doctor. Right. What else would you take on? Well, I think taking the fraud out is also important. How can a whole lot of fraud be a good thing? Yeah. And almost everybody has known that. And the early legislators made made they they made creating artificial currency.
You tried to pass off as real. They made that as a very serious crime. Of course, they killed you for it. And that was probably a good rule of that step in mankind civilization was to kill the counterterss. One thing I'll guarantee you is a counterfeitter who's dead is not going to counterfeit any more currency.
They can't do it after they're dead. No. Well, there actually people in our liberal arts universities who think that it's cruel to kill people because they can't do any more mis after they're dead. But I consider some people so damn mischievous that it's a very good place to have them as dead as soon as possible.
So you bring back more capital punishment. Yes. I might have less in some places and more in others. I'm sure I would. There's an article that just came out about the about Oregon which decriminalized all of um illegal drugs and is now rethinking that decriminalization because of what it has led to.
They thought by offering people help um to get to cure their addictions that that would be enough to offset it. What they've found instead is that they have places that are overrun with drug users on the streets making it very difficult to live. Massive messes. Yeah. Yeah. Of course that's true. And and that that's the kind of problem you run into.
The great rulers are people like Leak on you and Lon Fuller and Leak on. He said figure out what works and do it. That was his sole message. figure out what works and do it. And of course, mathematically that translates figure out what doesn't work and avoid it, right? And and both rules are correct.
And you have to have to get it right or as close to right as human beings can get it right. Part of the advice that you give people in life is pretty basic stuff, but if you follow it, it's really excellent advice. I think your first one is is have low expectations. The second one is have a good sense of humor.
And the third one is surround yourself with love of friends and family. Obviously. Yeah, sure. I have a hard time thinking of a time when you set your expectations low, though. Yeah. Well, I did. How so? Well, let me give you an example. It's perfect. Here I am. little boy growing up in Omaha and my father, one of my daughter's best friends living two blocks away and he has two sons and I'm right in the middle of the age of his two sons and I'm a little older than one, a little younger than the other.
Eddie Jerry Jr. is sort of a mechanical genius. He can take anything apart quickly and put it right together and perfectly. And and he also reads books all the time. And that's probably all he ever does is sit around reading books. He's a very bookish little genius with vast mechanical ability. Eddie Davis Senior, his father was the son of the leading mathematics professor at the University of Nebraska,
right? and he didn't have any money in those days. He had a huge family and and they didn't die and he couldn't it was very difficult supporting them on a professor's income and he went to all kinds of strategimms. He'd make his own raincoat out of a piece of oil cloth to save the money of buying a raincoat and so on and nobody else did that even by the standards of the 30s.
But that's the way he did it. And but he was a very talented man who wrote math textbooks and so on. And Dr. Davis had enormous mechanical ability as well as enormous mental ability and being physically dextrous. He he could do anything. He saw things in four in three dimensions and he and it was quite obvious that anything required mechanical ability.
I would not be as good as the two Davises. You know, I just no amount of effort or work was ever going to do it. Make me into a fly caster like Dr. Davis was or anything else. I just didn't have that kind of ability. And so I decided to stay the hell out of businesses where I would compete with people like Eddie Davis Jr.
and Eddie Davis Senior in their strong suit, knowing your competencies, knowing knowing your circle of competency, right? And that kept me away from those businesses totally. But part of your advice in life, I think, is to understand that change comes with life and adapt to it. And I it's something I think about a lot in my own struggles.
Everybody knows that I could have done a lot better if I'd been a little smarter, a little quicker. What are you talking about? You've had success in everything you've done in life. What would you What would you like to do? I would have I might have had multiple trillions instead of multiple billions.
Do you sit around thinking about this? What would you have done different? I do think about I think about what I Yes, I think a lot about what I nearly missed by being just not quite smart enough or hardworking enough. What where what would you have changed if you could go back? Well, I go back and make of course it would be a cinch to go back and do it knowing what was going to happen now.
Yeah, I know. I would be the richest man on earth. Well, what did you miss? What was there something where you zig started earlier for one thing and I would have compounded longer and I would have compounded better. So saved would have ended up richer. I was going to live to be 100 years old and I I constantly aware of the facts that I I basically screwed up given the hand I dealt.
They could have done a lot better. Quite easily done a lot better. But you are not somebody who spends a lot of money on yourself. We are living and we're sitting here in a beautiful house. But this is a house that you lived in for 70 years. I know for about 60 years. We're similar. And but you see,
we're both smart enough to have watched our friends who got rich build these really fancy houses. And I would say in practically every case they make the person less happy not happier. How so? Having a basic house really helps you. Having a really fancy house that's good for entertaining 100 people at once is a very expensive thing to do and it doesn't do you that much good.
I I think one of the things you've said along the years, at least this is what I've been told is that it's not staying rich that's difficult. It's staying sane. Yeah, of course. What happens? Well, most people go a little crazy in some way or another. I mean, that's a lot of your life. A lot of your life and advice is
avoiding traps. Invert. Invert and try and figure out where you don't want to be. Yes. And then avoid. Yes. Of course. That's what everybody's life is with any sense. All the people I know and my friends now, they never would become alcoholics. It was too dangerous. They would they just don't they don't they don't get near it if it's takes that many fine people into deep trouble.
Yeah. I knew quite a people having lived so long and have scattered around through different activities. And I bumped into a lot of different people. And I noticed as I got older and older that all the people that had very early heart trouble, the males that had very early heart trouble had one thing in common.
They all smoked a lot of cigarettes. Oh. So, I could see that coming fairly early. And it's rather interesting. I tried to learn to smoke so I could be a cool kid like the other kids in high school. I tried to ruin my life, but it nauseated me. And so I said, "The hell with this people learn me into a goddamn thing.
You got to get nauseated learning to do it." Yeah. And I said, I'm not interested enough in me going through a lot of nausea that I want to smoke. So, I just didn't smoke. Now, you did drink from time to time, right? Yeah, sure. But I didn't, again, I was and and I even drank excess a few times, but I was always there were enough alcoholics and near alcoholics in my own family to make me worry about liquor.
Yeah. And and so I was always very cautious about drinking liquor. Now I did occasionally get drunk and throw up. That gave me the nausea which enabled me to give up liquor. Do you still drink? I mean living to 100 everybody wants to know what's the secret. What is the secret for you? What did you consciously know the secret?
Yeah. I avoided the standard ways of failing because my game in life was always to avoid all standard ways of failing. You teach me the wrong way to play poker and I will avoid it. You teach me the wrong way to do something else. I will avoid it. And of course, I've avoided a lot because I'm so cautious.
But you you you do things you like like you'll eat peanut brittle or constant. Doesn't matter that much. Okay. I drink Diet Coke. Yeah, I'm sure Diet Coke shortens my life a little, but I don't give a damn if the the last week of lying there unconscious goes away. It's only the good part of life I want anyway.
You know, there are all of these um billionaires now, Silicon Valley types who are trying to do anything they can to extend life, like crazy things. They find they got a family full of Parkinson's. And of course, I watched my mother and my sister die of Parkinson's disease. And so I'm familiar with that one.
Yeah, that's a very unpleasant thing. I do not like the last month of Parkinson's disease. I've seen it up close. Yeah, it's no fun for the people in it. It's no fun for the people around them. It's no fun at all. And that coach may be helping me skip, who knows? It's helping me skip the last month, not the first month.
There there are some new ways that people think that they can extend life though and and one of the crazier things I've heard is this idea of doing a blood transfusion with younger people so you get younger blood. I mean there's like some Silicon Valley type that was crazy. You got to remember that the practice of medicine and my father's boyhood was a charlatan's profession.
people learned to make a living and they gradually learned a few things they could do to help the patients but they but basically they did a lot of nonsensical things. If other people want to know what the the best way to live is you would just tell them avoid the crazy things. Avoid the things that take you down.
Yes. Avoid crazy at all costs. Crazy is way more common than you think. It's easy to slip into crazy. Just avoid it. Avoid it. Of course, of course, of course. I think another thing you've said is whatever you are, um, wealth and age will make you more so. Yeah, sure. You've given away a lot of your money.
Yeah, but not not like Warren. More than half the munger money has already been passed to the descendants. So, I I' I've made exactly the opposite. It was a smaller wrong money. But I made exactly the opposite decision for the majority of our money. The majority of his money he gave away. And now he didn't exactly give it away.
It goes to Buffet foundations that go on for another hundred years. That's not exactly giving it. It's not not exactly like wasting it. It's having some significant Is there anything left on your bucket list? Anything you'd like to do? Well, that's an interesting question. I am so old and weak compared to what I was when I was 96 that I no longer want to catch a 200lb tuna.
It's just too goddamn much work to get it in. takes too much physical strength. So, I don't know why I would have paid any amount to catch a 200lb tuna when I was younger and never caught one. And now I give me the opportunity, I would just decline going. I won't even go out after them. There are things you give up with time.
And you're pretty active. You've got a busy social schedule. You're on Zoom. You have breakfasts and lunch. I like it that way. Yeah. That's my idea of a proper old age for me. And I didn't plan it. It just happened. And And when it happened, I welcomed it. I I am very good at recognizing unfair advantages and I got unfair advantages in old age the way I got unfair advantages in non- old age and when they came I just grabbed them.
Boom boom boom. The one grab I never made was for a third wife. Too late. Why? It's it's a too late. There are people for whom it's a necess necess necessity. They're more they're so much more comfortable in marriage than they are outside it that they really need it to be human. It's just the way the way they're put together.
And for such people, I repmen the 100year-old dating app. But you'll find that if you put it in, not many 100 year olds want it. They're just lying there. Your partnership with Nancy, uh, your second wife. Yes. It was a 56 52 year old marriage. Yeah. It's a long marriage. It is. And she got to live it to all the way to 86,
which is a long life. And Now, there are some tough stretches, but most lives have some tough stretches. Yeah. And hers came very near the end. I mean, Charlie, people probably look at you and think you're incredibly wealthy. You've had all these great opportunities and things that have happened in your life, but you've struggled, too.
Um, of course, everybody struggles. The iron rule of life is everybody struggles. I try and think back of what the toughest moments might have been and how you got through some of those. And I mean, well, we all know how to get through them through you. The great philosophers of realism are also the great philosophers of of what I call soldiering through.
If you soldier through, you can get through almost anything. And it's your only option. You can't bring the dead. You can't cure the dying child. You can't do all kinds of things. You have to soldier through. And you just somehow you soldier through. If you have to walk through the streets crying for a few hours a day as part of soldiering through, go ahead and cry away.
But you have to you can't squit. You when you can't you can cry all right but you can't quit. You've had time in your life when you've done that. Sure. I cried all the time when my first child died and but I knew I couldn't change the fate. In those days the fatality with childhood leukemia was 100%.
That was your son. That's gone away. Now it's now the cure rate is way up in the '9s and it's an amazing development. Think of how much pleasure it's given me to watch the cure rate for leukemia. What mankind did, what mankind civilization did was soldier through those tough years that took away my cousin Tommy from menitis and then and took away my son Teddy from leukemia.
Imagine cure imagine pretty well fixing that disease for for families who came into life later. It's a huge achievement. You can see why I like civilization. To me, civilization is what man has done with the last two centuries, and it's been a good thing to watch. Charlie Warren Buffett told me that a long, long time ago.
You told him he should live his life. He should write his obituary the way he wants it written and then live his life accordingly. Yeah, sure. I I assume you've done the same thing for yourself. Well, no. I've written my obituary the way I've lived my life. And if people want to pay attention to what it is, it's all right with me.
And if they want to ignore it, that's okay with me, too. I'll be dead. But what a difference it'll make. And so, but I think it's a good it's not a bad idea. That's Warren and I both live in the same house for decade after decade after decade. all our friends get rich and build better bigger and better houses and naturally we cons we both considered bigger and better houses and I had a huge number of children so it was justifiable even and I still decided not to live a life where I looked like the Duke of something and I I was going to avoid it I did it on purpose
why I And they would be good for the children that it would spoil them. Yeah. It's a rich family. You think your duty is to use the wealth and live grandly. That's what everybody's doing with the money. You will learn from the people that are doing it. Is the the plan for your life, the obituary you would write in your 30s the same you would write today?
Sure. I I basically believe in the in the soldier on system. Lots of hardship will come and and you're you got to handle it well by soldiering through and lots of a few rare opportunities will come. You got to learn how to recognize them when they come and not make too minor a trip to the p counter when the opportunity is available. And those are simple lessons.
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