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Market now is ‘crazier than the dot-com era’, says Berkshire Hathaway vice chairman Charlie Munger

Glenda Korporaal
The Australian
Dec 3, 2021

Berkshire Hathaway vice chairman Charlie Munger, a longtime partner of Warren Buffett, has made his first appearance at the sixth annual Sohn conference in Australia on Friday.

The 97-year-old Munger, who is based in southern California, was interviewed by his long time follower in Australia Caledonia’s Dr Mark Nelson.

He told the conference many current sharemarket valutions were out of touch with fundamentals.

“Some of the valuations we saw in dot-com era were higher. But overally I consider this even crazier than the era,” he said.

Mr Munger said his optimism on Chinese opportunities had moderated, but he considered it an essential trading partner.

“Almost every capitalist is less enthusiastic about China than they were a year ago but I am not despairing about China at all,” he said.

“I don’t think we are going to have a war, and if we don’t have that then the only thing to do is to get along with China.

“Nothing could be more crazy — for either China or the United States — than not getting along with the other.”

A billionaire in his own right estimated to be worth more than $2bn, Munger — well known for his lengthy and successful partnership with Warren Buffett.

The two have razor sharp minds, with their investment strategies honed by the interaction of their behind-the-scenes debates over investments, a relationship which goes back decades.

Both Buffett and Munger were born in Omaha but Munger moved to the west coast to study at Caltech in Pasadena where he still lives.

Munger has been a long time fan of US tech stocks with Berkshire Hathaway now a major shareholder in Apple.

He is known for his dry comments on the madness of the investing crowds.

“I think all successful investment is value investing in the sense that you’re trying to get better prospects than you’re paying for,” Mr Munger told the conference.

“There’s no great company that can’t be turned into a bad investment, just by raising the price.”

He added: “The ordinary human experience is to be way overconfident in your own ideas, particularly if you’ve worked hard for them and express them to other people. The world is full of insanely overconfident people and of course they make lots of mistakes.”

This article was originally posted by The Australian here.

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