저자: CharlieMunger · 외국인
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S&P500 인덱스 투자는 대다수에게 합리적이며 95%는 장기적으로 지수를 이기기 어렵다고 주장. 인덱스 과열 시 자기파괴적 위험(니프티 피프티 사례)이 있으나 전체 시장의 3/4 수준에서는 당장 문제되지 않는다고 봄. 버크셔는 지수 대비 성과를 장담하지 않으며, 강세장에선 하회, 지수가 현 수준 이하일 때 상회할 수 있다고 언급. 세금 구조상 버크셔 주주에게 유리한 면도 있음.
다듬은 글
The index funds of the S&P is like 75% of the market. Is there a point where index funds theoretically can't work? Of course. If everybody bought nothing but index funds, well the whole world wouldn't work as people expect. There's also the problem one of the reasons you buy a big index like the S&P is cuz you buy a small index and it gets popular, you have a it's a self-defeating situation.
When the Nifty Fifty were the rage JP Morgan talked everybody into buying just 50 stocks. And they didn't care what the price was, they just bought those 50 stocks. And of course, in due time their own buying forced those 50 stocks up to 60 times earnings. Whereupon it broke and everything went down by about 2/3 quite fast.
In other words, you can't If you get too much fanaticism in one sector or in one narrow index, of course you can get catastrophic changes like like they had with the Nifty Fifty in in that former era. I don't see that happening when the index is is 3/4 of the whole market. The problem is the whole thing can't work perfectly forever.
And and but it'll work for a long time. The index is of course just absolute agony among intelligent investment professionals. Because basically 95% of the people have almost no chance of of beating it over time. And it's And yet all of the people expect that they have some money they can hire somebody who will let them beat the indexes.
And of course, the honest, sensible people know they're selling something they can't quite deliver. And I that has to be agony. Most people handle that with denial. They think it will be better next year or they just don't want to think about it. And I understand that. I don't think of my own death either.
But but it's a terrible problem beating those indexes. And and and it's a problem that investment professionals have had in the past. And what's happening of course is that the the prices for managing really big sums of money are going down, down, down. 20 basis points and so on. Uh The people who rose in investment management didn't do it by getting paid 20 basis points.
But that's where we're going, I think, in terms of people who manage big portfolios of of say American equities and the equivalent of the S&P. So, it's a huge huge problem. And it it makes your generation of money managers have way more difficulties than it and causes a lot of worry and fretfulness.
And I think the people who are worried and fretful are absolutely right. I would hate to manage a trillion dollars in the big stocks and try and beat the indexes. I don't think I could do it. In fact, if you look at Berkshire, take out 100 decisions, which is like two a year, the success of Berkshire came from two decisions a year over 50 years.
We're hardly great. If we If we may have beaten the indexes, but we didn't do it by having big portfolios of securities and that having subdivisions managing the drugs and subdivisions and and so No, the indexes are a hell of a problem for you people. But, you know, why should life be hard? I It's It's what had to happen what's happening what's happening now.
If you take these people doing some of those early trading by computer algorithms that worked then somebody else would come in and do the same thing with the same algorithm and play the same game and of course the returns went down. Well, that's what's happening in the whole field is is the returns you're really going to get are being pushed down by by the progress of the sons.
If we just own stocks and we own the S&P our performance would be significantly worse than the S&P because we would be incurring a corporate tax which would now be 21% on capital gains plus possibly some state income taxes and effectively our tax rate on dividends is is depends where they're held but somewhere between 10 and a half or or 11 and 13%.
So Berkshire is a is a mistake or it's a is it a corporate disadvantage simply by the way the tax law runs compared to owning an index fund which has no tax at the corporate level but but just passes through to the shareholders. So I I wouldn't I don't I don't know whether we'll we'll outperform the S&P 500 or not.
I know that we'll behave with our shareholders' money exactly as we would behave with our own money. And we will have we'll basically tie our our fortunes in life to to this business and we will be very cognizant of doing anything that couldn't destroy value in any significant way. But we will probably uh if if there were to be a a very strong bull market from this point forward or we would probably underperform during that period.
If uh the market 5 years from now or 10 years from now is is at this level or below, we will probably overperform. But but uh uh I'm not I'm I don't think that I want I I don't quite understand the question in terms of um when it says the total return of the S&P over 10-year period and Berkshire's growth in intrinsic value would outperform.
I I don't know whether that will happen or not. Charlie? Well, there'd be one big advantage for the shareholders that pay taxes. And that is that the that the Berkshire shareholders, even if we just match the S&P, we'd be way ahead after taxes. We all have a pretty decent role in life and a pretty good position.
We shouldn't be too disappointed. No. After a 15-year period of market underperformance, you're cautious about predicting Berkshire being able to outperform the market in the future. Given this, what do you see as the arguments for long-term shareholders to continue holding their stock versus diversifying their risk across an index?
I personally prefer holding Berkshire to holding the market. Because I'm quite comfortable holding Berkshire. I I think our businesses are better than the average in the market. Is it because you don't think the market values it fairly? Well, these are just accidents of history and things are fluctuating at all times.
But then on a composite basis, I'd I'd bet on Berkshire over the market. That's assuming we're all dead. Yeah, I recommend it. I I recommend the S&P 500 index fund and have for uh a long long time to people and uh I've never recommended Berkshire to anybody. uh Cuz I I don't want people to buy it because they think I'm tipping them into some time.
Never. I mean, no matter what it was selling. And uh And you know, I I I made it public. I you know, I'm on my death, there's a there's a fund for my uh the then widow and uh 90% will go into an S&P 500 index fund and 10% of treasury bills. And on the other hand, I'm very happy having my future contributions to group of charities that'll be spread over 12 years or so after my death.
Uh to stay in Berkshire. I think the odds are uh Berkshire Berkshire Berkshire is um I I like it, but I'm not uh I don't I do not think uh the average person can pick stocks. We happen to have a large group of people that didn't pick stocks, but they picked Charlie and made a manage money for them 50 or 60 years ago and and uh uh so we have a very unusual group of shareholders, I think, who who look at Berkshire as a lifetime savings vehicle and uh one they don't have to think about and uh uh one that they'll look you know, if they don't look at it again for 10 or 20 years that that uh we'll have taken care of the money reasonably well, but that I wouldn't argue that the S&P 500 over time uh would I perfect I I like Berkshire, but I uh uh I I think that the a person who doesn't know anything about stocks uh at all and doesn't have any special feelings about Berkshire, I think they ought to they ought to buy the S&P 500 index.
As a follow-up to that, I believe you've directed the trustees of your estate to invest substantial assets into the index fund. Isn't that a vote of no confidence to your managers? Well, no, it it because we're talking about way less than 1% of my estate. And uh one thing I'm going to do incidentally, I I mean, all rich people get advised by their lawyers set up trusts so that nobody can see your will and all that sort of thing.
My will is going to be public record and you can you'll be able to check at some point whether I'm telling you the truth about what is going to get done, but uh 99.7% roughly and of my estate uh will either go to philanthropies or to the federal government and and uh uh before it does it, I think I think Berkshire is a very hap- a very good thing to hold, but for a given individual, particularly my wife I just think that that that having a a tiny fraction that which is all it takes for her to do very well for the rest of her life uh I just I think that the best thing to do is buy buy 90% and then in an S&P 500 index fund.
Now, the index fund people naturally have started over the time they they market more more and more products that are that go to other industries and everything. So, they're really starting to say to the to the American public, they're saying, "Well, you can pick what continent to invest in or you can pick what industry and we'll sell you something for that." And when they just have gotten through telling them, you know, "You really don't know anything about stocks, just buy the whole index." So, uh uh so, I named the 500 index as one, but it's it's a tiny portion, but it'll be it'll be her livelihood and she'll have all the money she needs, and way beyond it, and that's that.
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