- Warren Buffett and Charlie Munger spoke during Berkshire Hathaway’s annual meeting on Saturday.
- The billionaire investors flagged widespread “gambling” on stocks, and slammed bitcoin as worthless.
- Buffett and Munger also discussed inflation, Robinhood, the pandemic, and the risks of speaking up.
Warren Buffett and Charlie Munger called out the feverish speculation in financial markets, dismissed bitcoin as worthless, and underscored the dangers of inflation during Berkshire Hathaway‘s annual shareholder meeting on Saturday.
The Berkshire CEO and his business partner also discussed the pandemic, the risks of wading into political debates, and Robinhood’s plunge in value over the past year.
1. “Sometimes the stock market is quite investment-oriented, and other times it’s almost totally a casino, a gambling parlor — and that existed to an extraordinary degree in the last couple of years, encouraged by Wall Street.” (Buffett added that Wall Street makes money by “catching the crumbs that fall off the table of capitalism.”)
2. “Inflation swindles the bond investor too, it swindles the person who keeps their cash under their mattress, it swindles almost everybody.” (He was asked whether he still believes inflation swindles equity investors.)
3. “The best protection against inflation is still your own personal earnings power. The best investment by far is anything that develops yourself.” (The investor asserted that people will always be willing to pay to see a good doctor or hear a great singer.)
4. “If you told me you owned all of the bitcoin in the world, and you offered it to me for $25, I wouldn’t take it because what would I do with it? I would have to sell it back to you one way or another. It isn’t going to do anything.” (Buffett contrasted the cryptocurrency with farmland, apartments, and other productive assets.)
5. “We were not very, very far away from having something that might have been a repeat of 2008 or even worse.” (Buffett was reflecting on the pandemic’s massive impact on market liquidity in the spring of 2020.)
6. “The best thing to do is to basically shut up and not have a bunch of people facing consequences that they didn’t ask for in the first place.” (The Berkshire chief said he would no longer opine on political issues to avoid his businesses being boycotted, and his shareholders and employees suffering as a result.)
7. “I don’t think we’re smart, I think we’re sane. That’s the main requirement in this business.”
8. “Take away the management fees and I’d bet on the monkeys.” (Buffett suggested that most financial advisors are no better at investing than a bunch of monkeys picking stocks by throwing darts at a dartboard.)
9. “We’ve got people who know nothing about stocks being advised by stockbrokers who know even less.”
10. “People are charging for skill and delivering closet indexation.” (Munger asserted that many fund managers are scared to underperform the market or their peers, so they invest in the equivalent of index funds.)
11. “In my life, I try and avoid things that are stupid, evil, and make me look bad in comparison to someone else. Bitcoin does all three.” (Munger said bitcoin’s price would likely fall to zero, the crypto threatened the stability of the financial system, and it made the US government look foolish compared to the Chinese authorities who have banned it.)
12. “It was disgusting. Now it’s unraveling. There’s been some justice.” (Munger accused Robinhood of encouraging “short-term gambling” and collecting “big commissions,” and criticized its business model of collecting payment for order flow.)
Robinhood’s communications chief, Jacqueline Ortiz Ramsay, said in a statement to Insider: “It is tiresome witnessing Mr. Munger mischaracterize a platform and customer base he knows nothing about. No, Robinhood doesn’t charge commissions and does not allow day trading or short selling. We never did. He should just say what he really means: unless you look, think, and act like him, you cannot and should not be an investor.”
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