Charlie Munger
speaker
204 appearances
4 recordings
4 series
first heard Nov 2022
last heard 6 Feb
Charlie Munger’s voice in public audio — every appearance, attributed to the second.
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recordings per month · last 12 monthsRecordings per month over the last 12 months — 2 in all, peaking in Feb 2026 with 1.
Appearances
By and large, having bumped into a lot of people in the businesses with venture capital financing, I would say the ordinary rule is that people in the business doing the work, they more or not, they hate the venture capitalists. They don't feel they're their partner trying to help them. They're only taking care of themselves and so on and so on. And they don't like them.
Yeah, well, but that's not true in Berkshire. You see, they know we're not trying to discard them to the highest bid. See, if someone has an old investment bank or offers us 20 times earnings or some lousy business, we don't sell. If it's a problem business we've never been able to fix, we'll sell it. But if it's a halfway decent business, we never sell anything.
And that gives us this reputation of staying with things, which helps us.
Well, it's rare, you see. Everybody else has a standard way of doing things. The lawyers have their standard forms. And everybody just has the same standard form. And they get the same standard results, subject to the vicissitudes of investment life, you don't want to make money by screwing your investors. And that's what a lot of venture capitals do.
The world is full of XG, Goldman Sachs partners that formed a private fund. And they manage a billion dollars or something like that. And they charge two points off the top plus this. And that enables them to make very handsome livings themselves. But the endowments are not getting a good return.
It's just the way it works. And of course, you really shouldn't be in the business of charging extra. You really are going to achieve very unusual results. And of course, it's more easy to pretend that you can get good results than it is to actually get them. And so it attracts the wrong people. People in investment capital turn their mind.
And the people who make the most money out of venture capital are a lot like investment bankers, deciding which hot new area they're going to get in. They're not great investors or great at anything.
Well, they're starting to do it. The endowments have started to say to all these people that charge $3.30 or whatever they charge, they said, we'll pay your $3.30, but we're going to put in twice as much money, and then the next half you'll get nothing on it. You're just going to ride Perry Passu on some of your investments. So the fees go down by 50%. That'll take a lot of the fun out of it.
Fees down 50%. And that's happening all over America. They feel had, misled, irritated. They've looked foolish to their own trustees.
There'll be somebody who'll find a new thing, but it gets harder and harder. I would argue one of the easiest ones was when they decided a little group around Home Depot, they would copy the Costco model and home improvements. And that was basically a good idea. And think of the money they made doing it. Yeah.
Yeah.
Well, there was another one at Costco. Floor and Decor is the current imitator. And it's just this in vinyl, wood imitating vinyl flooring. They're running a Costco model. And they keep adding miscellaneous stuff to it, too.
Well, it would be simpler if it was all floor.
Home Depot was the same. They copied everything.
Yeah, they came out, they copied everything.
How did Jim and you feel about that? Saul was not a crazy guy. He was domineering and so on. But he was also very intelligent.
But there aren't many opportunities like Home Depot and Costco. There aren't very many.
They were too wedded by the ideas they already had. That's everybody's trouble. You just can't accept a new idea because the place is occupied by an old idea. They got in the habit of getting their real estate practically even nothing because they went into little towns where nothing was valuable. So always their occupancy costs were like zero, and they knew how to make big division stores.
That was their formula. So it offended them to go against the rich suburbs and have to pay up for the good locations, and Costco just specialized in the good locations where the rich people lived. And Walmart just let them do it year after year. It was a terrible mistake.
No, never met him. I knew the son, one of the sons, and they divided it up, you know, in about six parts very early. Yeah, Walton Enterprises. So they never paid much gift taxes or anything.
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