What a Time To Be Alive (Not)
March 1st, 2022: The return of the Roaring 20s in this new century seems more unlikely by the day.
The only thing that matters is the timeline.
For Russia, the longer this war takes, the more likely internal strife rises and external variables further threaten Putin’s objectives.
For Ukraine, every day they extend the war is another day of extending the costs of this unfounded war to the Russians.
Atrocities
I am an idealist, and I find myself driven to emotional extremes when I watch the world burn from the cruelty of others.
I’ve been trying to adhere to Josh Brown’s recent advice “talk less, read more”. Learning about what other good people are doing to solve these problems is one such cure to my emotional weakness.
Another cure is understanding that the simplicity we humans crave is honestly inconsiderate of the complex and interconnected nature of modern life.
Ian Bremmer shared a lot of geopolitical insight about the war between Russia and Ukraine in this interview. I highly recommend listening to the entire thing.
WWIII Twitter is Fucking Nuts
I don’t know if you’re on Twitter, but it’s been a great source of connection for me in the world of finance. But all that they’re talking about now is the potential for World War 3 and every nuance of the conflict.
As Russia invaded Ukraine, the Ukrainian Twitter account posted this:
Just a few days later, they also posted this:
We have Ukrainians posting threads about their escape from Ukraine:
We have the Taliban calling for an end to this war:
We have a woman who confronts Russian soldiers and threatens them in one of the most heroic displays I’ve ever seen:
And that is just the tiniest glimpse of what it’s like when a war happens with a robust global internet running in the background.
I have an inclination that makes me believe that history repeats itself. But this shit is going to be different in ways no one can predict.
Some Charts
Many Russian companies are being slapped down because of their “president’s” decision to wage an unfounded war:
MOEX Russian index did a deep dive to levels from the 2020 pandemic:
The Russian Ruble is down the most its ever been down:
It’s Too Early to Talk About Outcomes
‘Nough said.
One Final Thing
I enjoyed listening to Charlie talk about the world and its markets.
Some notes about the 2-hour long video:
It’s ironic that Charlie talks about the morality of crypto (crypto is bad) right after talking about cozying up with China (China is good)... The US Dollar is the world’s foremost currency for illegal activity. Munger has no problem using it to invest and accumulate more $$$.
Liquidity = Disaster. in Charlie’s mind, businesses aren’t supposed to see volatility in their price. If the incentive for “gambling” goes away, the market will be “more accurate” and stable (this is his theory).
Printing money may have consequences, but it may not. Japan has shown survival & stasis in the last 25 years. But will we accept “stasis” here (best case scenario)? Or will we become like some South American countries?
He keeps interrupting the host, but I think there’s probably some lag and he wants to fill the silence as most humans are wont to do.
Inflation = The eventual death of democracy.
You don’t need diversification!!! If you want to do better than the average in the markets, owning more than 4 assets (that you actually spend time understanding and managing) is a fool’s errand.
Charlie says gaming is here to stay! He then goes on a mini-tirade about the concern of gaming addiction, but I think his old man mentality is showing (he admits as much). A hundred years ago it took AGES to get from one place to another, to learn about the news, and people often spent their time meaninglessly already.
The underlying trends that were created due to the pandemic (zoom meetings, work from home, less business travel) will persist forever. How or to what magnitude is unknown.
Agony is how capitalism works… Well shit. That just blew my whole love for capitalism out the fucking window… (I’m joking, kinda).
Misalignment of incentives for executives/management/employees can often lead to negatively impacting shareholders. Somehow this argument from Charlie soon devolved into praising China and cutting down some socialist efforts in America.
He then goes into a history of newspaper monopolies, how they’re dying, and the consequences from the death of the 4th State. Does he know about Substack? Now the writers and editors that made various newspapers successful are able to earn on their own and run their own businesses. It’s very interesting the level of contradictions that Charlie goes through in this annual meeting discussion.
We need to be able to cut costs… Many successful businesses get bloated and comfortable, which leads to waste and needs to be corrected with layoffs, terminations, and other cost-cutting measures.
He definitely just interrupts the host because he’s got more to say. He gets louder too if she doesn’t stop talking.
Voting power has passed to index funds, this will change the world… he has a pessimistic view about the potential outcomes.
Charlie’s answers to a number of questions don’t match the questions asked. Likely effect of old age.
Don’t hoard cash waiting for better opportunities…
12% before inflation / 8% after inflation (annual return) is unlikely to persist for future generations.
The last 100~200 years brought about most of the modern world. Before the 1800s, life was more or less stagnant. With all the effects of these basic needs being met, people are way less happy than they used to be. I challenge this because there is no significant evidence that people in the 1600s were happy. People in the 1300s were unlikely to be very happy as they died en masse from plague and dealing with the aftermath of 300 years of crusades.
The world is driven by envy, not by greed.
He is grateful for his life and at peace with his eventual death.
Happiness = having low expectations. I disagree. I have encountered so many who do the bare minimum because the world expects nothing but that from them. You’d be amazed at what some high expectations (when used properly and supported well) can do for people.
He reminisces about Worldbook Encyclopedia and bemoans the day that Bill Gates gave out an encyclopedia for free with his software via Microsoft. He says he lost $50 million a year through the death of Worldbook and it’s bad for the civilization that Worldbook died.
My notes may reveal some bias against Munger but make no mistake that I very much admire the man. These thoughts were just my initial musings. Like everything Charlie said, take it with a grain of salt/sugar depending on our mutual predispositions.