Charlie Munger 01:06:46

when we teased this episode in the email about the Jenson episode that we just released the gases that we were getting from folks were amazing every people were like its Charlie！

its warrior， its tailor， swift and a lot of people were right hey！

Taylor， you know where to find us acquiredfmgmail dot com if you are looking to get more publicity were open have travel gettin touch alright lets do it？

sitting down say is straight another storyon the two welcome to this episode of acquired the podcast about great technology companies and the stories and playbooks behind them im Ben Gilbert， um David Rosenthall and we are your hosts this episode is a very unique one for David and i good friend of the show and remarks organized a little dinner for us with Charlie Monger and a few other folks at Charliehome in Los Angeles you can hear Andrew a few times in the background asking Charlie questions we are pretty sure that this is the only podcast that Charlie has ever done Charlie asside from being one of the most prolifiinvestors of all time alongside his partner warren buffet is 99 years old healturn 1 百 onjanuary first of course， our conversation was interesting because hes freaking Charlie Monger， but also because it was interesting to get the perspective of someone who has seen the last 99 years of human history we talked with Charlie of course about cosgo his history investing in retailers over the last fifty years we also got to hear his views on what it takes to build a great partnership whatsgone wrong in the global security smarkets these days， the concept of investing vs gambling and where investmen opportunities remain in the world today yeah！

Ben this was such a special life experience for you and me and you and me together to do this and the fact that we get to record it and now share with the world for posterity just i sing on the cake and the whole thing was unbelievable yeah！

listeners we knew we were going to have dinner， we were not sure whether， we were gonna be able to record it and now we get to share it with all of you with that join the slack there is awesome discussion of every episode and the news of the day at acquire data fm slash slack if you sign up for acquiredemales， you will get episode corrections and follow up from previous episodes plus hints at what the next episode will be thats acquireddatafm slash email and we have only one sponsor for this interview yes！

a specialconversation deserves a special sponsorship and longtimelisters will know theres only one company in the acquireduniverse that is truly appropriate because everything they do is modeled after Charlie and Warren and thats tiny yep！

tinyis the berkture haltheway of the internet literally they are such huge fans that they started a company that makes bronzbusts of buffet and mongerthemselves but more on that in a minute yeah！

so berkture as we know started as a textile mail in massitusitsnearly 20 years ago and almost twenty years ago， tinyfounders and you Wilkinson and his partner Chris took their version of an internet textile mill the premiere design agency， metal lab， which design the us for slack， Uber， tinder， headspacecoingbases， others， and they asked themselves what would charlien warren do if they were us and that led to the realization that justlybricks were discovered in the physical world the internet also has wonderful niche businesses with great cashflows in fact， they tend to be even better than the old days of these candidas in bluechip stamps because they requires zerocapital reinvestment have software margins and can build global brands muchfasterthanthe what fifty sumide years， it took seeds to expand around the world yup so antruenchris took the extra cashflow from metal lab and there other businesses and created tiny the worldsfirstend best permanent holding company for wonderful internet businesses and boydid it work yeah fast forward to today and thanks to Chinese success this opportunity is no longer a secret many people have cut on to the idea that this can really work but just like berkture itself no one else has the combination of experienced tempermen access to capital and frankly reputation that Andrew in Chris have built over the past two decades were investors in tiny ourselves alongside bill Akman and Howard Marks and just like the two at m tiny is really the longterm buyer of choice in their nitch anyonewhos looking for a permanent home for their profitable internet business or who needs a capital partner for a co founder or vc captable by out would be lucky to work with tiny yep for instance they just bought the premier social network for film buffs。

letterbox， which has been the founders baby for twelve years and will stay so within tiny and this really reflex tinyes whole ethos workwithonly the best internet businesses commit to simple diligence 30 day deals and leave the business alone either for you to operate or bringin new longtermoriending management upto you so thanks to tiny this is the only sponsor as bensaid that youre here on this episode and just like berksure itll be here in perpetuity tiny just became a public company earlier this year and they can now do deals ranging anywhere from one million all the way up to two hundred and fifty million so if you want to get in touch， just shoot them a note at high at tinydatcom and just tell them that Ben and David sent you thebronscharlibusts the perfectdaily reminder in your workspace to ask what would charly do just head on over to berksure nerds dot store to buy your own and they also have plenty of some guy named warren to OK now without further ado this is not investment advice David and i may have investments in the companies we discuss and this show is for informational on entertainment purposes only and on to Charlie Monger Charlie i was watching the nfl games last weekend that it seems like every advertisement now is a sportsbedding advertisement is this good for America no course not 哈哈哈 are the dog tracks and right strix of America of the cascenos good for America？

course not that is very popular thats how waring got it started right at the restrack well but we are never against a pageronable one， one of the outz and his favor not somebody else right its just so simple of your warn you want the house！

you want to be the house not the powder listeners the next topic that came up was retail， stocketrading and the idea that for many Americans this is akin to gambling what switch organize they dont really know anything about the companies right？

因为就是 camp on going up and down in price 嗯， if i were running the world， i would have attacks on short term games with no offset for losses anything and i would just drive this whole crowd every wall business what do you think about the algorithms like renaissance and stuff like that well， of course， round first first argorism was so simple they shifted all stated for the past and what did they decide up up for your two closing prices and downdown were more common than down up or up down whats they realize that switch was for Grace reason the deep of the psychology of man this is man is a natural transfollower he triggering a gambling short term and they they just hes programs the computers to automatically 没有 buy and one thing of the first update then and sell before the end of the second day and you did everyday the machine would you know as the central third edge say your check today is eight million five hundred thousand dollars crease you check tomorrow was nine million four years well， what happens is this the ones the easiest trade is different run what you know？

what the average is the index ones have to buy you know what is exactly they all know that and the way they get their returns year after year is taking a leverage that midday leverage of hire and higher and higher and higher so making smaller and smaller province of more more volume， which gives them this big peak leverage risk， which i would not run myself then thats the only way they make these they returns is that with huge leverage they would make you crazy if you were already rich。

i the good fortune of speaking with someone you know well。

richardgalante i cosco and spending a few hours what about these been there all is what its crazy i mean it seems like thats everyone on these theyve all been there yeah i know im curious how did you first come across cosqa or or price club at the time or ad health somehow new saw price and what he was doing he said you have to dont medium so i Joe download windows saw anycourse saw was a very intelligent man saw was an ordinary lawyer until thirty nine years of age anyway， out form government was this in the fact of this he was no longer with a go， sold gold to the Germans ah feedmark to the yeah！

Hugo man Hugo man yeah， yeah！

and did you get to invest in price club before it merged with cosco yes！

i did but i just bought my stock in a market i was not got any favor and so how did you eventually meet Jim Sanagal well， Sang all as warren that we cant director of gosgo you was looking for somebody with a financial reputation as an independent yes and what would do is about she see you get Charlie to do it i want shorter plan rides to driger is meetings and so were so thats all that happened and did berksure ever try to become a shareholder require custom try to get warned about the French when they left care for ah and werenwouldndoing was it just that he doesnt like retail or what was the big objection hes right or retail gradually everything that was much maybe and retail is gone says robot is gone the big partner is gone you know， its just too damndifficult source is concern any other bad experience with diversified retail right no， we made no， but money is diversified we can exactly make it retailing！

but we made a lot of money wow and with diversified most of the money was not on the retailing operation you made a lot of that money through what happened was very simple！

we bought this little person at department store chain in ballamore big mistake to do bad as the ank dried on the closing river you realize youd be a terrible mistake we decide just rivers and take the hits to look foolish rather than go broke yestalltig get us out of this by that time we already finance have a put on it free that so work and there is always extra cache and our own stocks get down to selling an enormous but we just in the middle of one of those visitations with what what what all that money went by those docs of course， we troubled and just setting on our raft and that led to bleu yeah， but yeah was part of this early success of bleu wow！

and so you know you mentioned warn doesnt like we just get something else that be able to know about yeah we bought a little piss and savings a long company so maybe twenty met indoors we we left that thing we had taken out of our little twenty many dollar addressment over to bay in those in margable securities， which went then the neural insurance companies is part of their bedroom capital so we we had some wonderful early years and thats what i really need just wonderful early years well？

so in our cosql episode， we started with the joke at one of the briction beetings probably ten years ago， warren told the joke about you were on a plane being highject and the highjackers gave you one final request and you said youd like to give your speech on the virtues of me kind of robotiem oh！

yeah！

yeah and he said shoot me first， we were hoping could you give us your speech on the virtues of gasko no！

what was kidding me？

her becse or repeative on the subject？

there arent many times a lifetime when you know youright and you know you have one， which really gonna work wonderfully maybe five six times a lifetime against yes， do hmm and people do these times early all go broke？

because that anything is easy， its fag is very hard and rare what was it about Costco？

that made you realize this is one of those few moments in a lifetime well。

they really get seller anybody else in America， and they did a big efficient stores and all the parking spaces were ten feet wise so eight feet nine already normally are they dont they get a lot right yeah and they had a lot of parking spaces they kept out of those stores all these you all didnt do big volumes you see and they gave special benefits the people who did come to the stores in the way of word points。

the executive membership yeah！

forward and the capital late business bottle i mean when we were studying at the difference oh！

yeah， price we have no one best manage， the suppliers wait until open pay and then theyre schedule a pay only after theyschedule the sell theyve got nine hundred warehouses around the world full of the high quality merchandise none of which they have sitting on their books thats great yeah our understanding is that price club went public initially before the merger theydislisted they didnrace any capital they didnt any capital who knows some kind of like the yous kind of affairs here hmm he like deals， he like this misline is rose date like yeah but doesnmake sense you dont want you get enerbridge is big is cause you dont have school around your breaking out get other people operate clock up your bugging out permanently and stuff is not gonna pay you very much right you know while i must answer have you ever seen another business that takes advantage of the virtue of the lowest queue count the way that coscode does well maybe there are lots of that little growth with short chain here in los Angels， Gelson Brothers 哼， they wanted the high turn over some low cable across and they never made the least effort to earanymoney you have they wanted to share breaking out with anybody 嗯？

as you reflect back on you know one of these few great companies in a lifetime that you should get bigon what advice would you have for David and i as young partners looking for a few these in our lifetime things to look out for one？

you find one， you may you may find it five years after you bought it you know 嗯嗯 these things may work into other， you may your other own understanding may get better when you know you have an edge you should better have 嗯？

你那有人？

most business school 你真是 N？

and how do you develop that level of conviction to know you work out you read a lot？

reading， thinking。

and visiting im curious we want to ask you you have this beautiful partnership with warren for half a century yeah！

werendicky in our parterics a well hanging fruit the early days of our operation you dont have any un align in fruit that thiseasy 的 regular you mean an investment operative yeah， thats right， but your relationship with more and like how of you were all some kind some are we we both wanna give our family safeence take new age of our investors get similar as yeah， did it change over the decades so we wert still cares more about the safety of his burger shell as any cards but any else， we used a little bit more leverage throughout we have three times as much now i wouldnt better much more rest better and we just do we never want to give them at least chance of string of our basic share position if you had used more leverage do you think there some chance that we were done a little better sure do you think there some chance that it wouldnexisted all that it would have cost you the franchise no i go to work from hmm this word think that easy it the situation land itself is looking out when you leverage im so curious on after we did are they armatically leverage you were a new store with no capital of course， this leverage who wouldnt want a business better than that and no aventage right thats a good point by the virtue of you oh！

a whole bunch of people money on day one for these goodsthat which is， which turnowers are rapidly right itinterest i mean thats leverage its not debt leverage mean how do you think about that like after we did our virtual series a lot of you do it now a lot will now do it who manucks something theyre terribly strong and theyre just forcing the suppliers the carry only isnlikewhere the only wants to do back to the point on partnership David and i are coming up on ten years as partners in this podcast we do together different than the investing business but a compounding one none the less after a fifty year partnership with warren what advice would you have for us interpersonally to make full of adenduring partnership well？

helps if you like one another。

we do yeah。

but i dont use any one formula a lot of partnerships that work real for a long time having a good one thing and one is good another is naturally divided and each one lies what is doing？

coscodes kids they had Jeff brought man whos very smart， but not a retailer and James only they divided up and they originally create the problem would be the champion ceo this is id he found the whole thing but sorry was i know i have to be to see you so the bag unfortunate port beauty you everybody and her all struggle and brought on the mood aside was that after you join the board no before。

do you think you and warn not living in the same city helped your partnership last so long well。

i may have， warn has very close relations with all those people that have launch every Saturday at burger headquarters is my god never level quarter of people there who are kind of my ground up do you think it helps that when you do spend the time together its special rather than being common， well course， we used spent a while time together we have that much to do now we got more to do and then， but then it just the other manage year of life so its different yeah！

buddy hmm i feel like we have a lot to do now but what are you actually difficult doing best money well？

and i think its although impossible to do time， after time， or time and bed your cable yeah， we really want to ask you i i your thought time that your careful get so hot you have this side so quickly yeah year old just gambling。

do you think the role of venture capital is being properly accomplished in society？

no！

i think its very poorly done Charlie elaborated on this point with a few things that we cant care but the topic did turn to bitcoin iheard！

many comments youve made on bitcoin im curious if you have a thought on this particular angle， an easy way to transfer money in between countries especially， when those countries dont have a stable store， a value within that country is it good to have a independent store of value that is not where is better the world as a whole way of having some currency。

the way that was solve this for a long that in the bridge found with the national currency of the investment world that shift the dollar its still a dollar yep and people like China have these enormous reserves the dollars you the money we make way 这个 money we will give us for we always just print up these peace of paper yeah！

and what about the common person in some of these less fortunate countries， who dont have access to us dollars oh！

they do a very any money the dollars very fungible you can always buy one and you are obcared back to this point of uh the role of venture capital in a society if you could design a perfect system to fund animation business if you do it right， if you might give the right people about nurture them help them you know a lot about the tricks the games you can help them run their business yet not interfere with them so much they hate you buy in large having buffed into a lot of people in the busines with bedr capital financing i would say the art night roll is the build in the business doing the work more than other hate the venture javless they dont feel or they bear partner trying to help them to come they are only taking care themselves and song they are like how could it work differently yeah well， i but i， but but not see are we away they know were not right to discard them to the highest bid see if someone has all the best regular regular， we also hmm if is problem business we never able to fix both out but with the halfway this is business we never saw anything and that gives us reputation of state with things which helps us and do you think that by unhold not only mentality but demonstration is the key thing that alignes investors with managers well its rare you see everybody else has a standard way or doing things the lawyers have their standard forms and every regions has the same standard form they get the same standard results subject of assistitudes in doesnt like you donwanna make money by screen your investors and thats what a lot of adventure caples do the world is full of xg column sex partner is it from the private fund they manage billion dollars or something like that and they charge two points off the top plus this maybe and that they was having to make very handsome looings themselves but the indomus might get a gear return and do you think its specifically the fee aspect of fun structure page of the way this is the way we work and of course， really shouldnt be in the business a charging extra but that you really are going to achieve very unusual results and curs is more easy the but John the get good results essentially get them and so is it tracks the wrong people people will investment capital turn on mind and you will hate the most money out eventual capital are a lot like investment bankers i think which out new area theyre gonna get in theyre not great investors are great anyway。

what do you think endowments and large pools of capital should do？

then what are starting to do it？

the endownments have started to ages always people the judge three and thirty or whatever really judge they said will pay your three and thirty were gonna put twice as much money and then the next abul get nothing on it， feeds down thirty percent and thats happening all over America they feel had misled！

irritated look foolish their own dress days one of the issues i think in investing right now you mentioned about venture capital bending is true， everywhere is like theres just so much capital and so much competition were so far removed from the cigar budget were in the opposite the cigar budget these days are there operative somebody will find a few things。

i would argue one of the easiest ones was when they decided a little group around home people they would copy the gosgo metal and home improves that was basically a good idea and signal money they made doing yeah pretty markets yeah， the dry copy of classical do you think there are more opportunities to copy coska well should there was another one of classcl fronticore is a current imitator！

its the miscellaneous stuff thatll eventually kill you though well！

maybe sable is all floor yes！

is it like the vertical home debug works so well， but i dont know that it was totally obviously part of the appeal of cosco was it was horizontal it was everything consumers could come they could make a trip bring their big wag and bring their big trim tables the same they copy everything famously burning markets came out to visit sol before they started yeah they came out they copy everything sol was like happy to share the playbook with everybody right how do you feel so was a node crazy here use dominaring and so on but he was also very intelligent！

but there are many opportunities like omdeep there are very many what do you think Walmart hasnbeen successful once they saw cosco in competing they were too wide， but the ideas they already had thats very trouble is cant accept a new idea because the play space is like about an old idea they got they habit or getting the real state credit even nothing getting any little towns or nothing was valuable， so there always are accurences like zero and any about a make big decision stores that was their formula so it offended them the gold against the rich suburbs and have to pay up for the good locations and cross goals specialized in the good locations with while i just left year after year was a terrible one state did you know sam 网 no everybody i knew the song more of the songs， they divided up you know about six parts very early yeah multiprises they never paid much niftax running the topic then turned to the automakers and the future of the car industry the car harder would be you and the autobusiness have something killing whois going to win who knows all things been thrown away up in the air by all these electric cars yeah has big new capital requirements different ways of selling cars and plus they get these tough unions。

do you think its more investable today than it was fifty years ago because of the disruptive innovation of electric well。

for Mary were one or two electric cars are really good at maybe but certainly know what else of bid was American but that i work seventy years a week and as a very high high queue you can do think you cant do you look at somebody else this auto part need to figure out how to make the god department you cant do that you see Charlie you rested a hunday yes with that theres ever do how was that investment for you that lost money not much because i was stubborn i held out until i got back that almost like what nice old theres been a lot of discussion about virtues investments in the Japanese training houses well， but that is a no brainer something like that if your smart is warned， buffet maybe two three times a century yet an idea like that the interest rations of an were half a percent per year for ten years and these training companies were really entrenched old combining and they had always cheap cover mines rubber promptations and so you could bar over ten years ahead all about it you could buy the stocks up with five percent dividends so this is a huge flow of cache we know investment no thought no anything how do that yoube lucky？

if you were too accentry， we can do that nodeelse could it looked attractive or something you could get， virtual this credit cut and dont where you can get？

it was be very patient just pickaway as a little piece of the type took a forever to get ten billion dollars invested， but it was like having god just opening her chestondispouring money under softwlyeasy money its a interesting that its paradoxial you need berctures credit！

but at Berkshire scale its actually hard to put enough money to work thats true ble what should be hard to make money？

what should be easy？

Japanese training companies reminds me we studying another company recently Nike that is that is what surprising the company？

yeah！

did you ever look at a style company of course， i look i look that but i dont like style company hmm to fad driven well， i suppose you are be Hermes of achiven of price that buy a but short of that i million by this that the company oh！

thats a good pick to the style point another one that they covered was lvmh what are no has done has been amazing so what you make of that company well。

if your is good is they are was theyve done you have a lifetime to do it and our life that really， you great another， but its not easy arm as is on the eight generation i think now the family running it its not a bit easy they have meetings every day with it make policy decisions they choose the locations one of the time and its work its definitely work what do you think the durable value is in these as you say style companies of the very best one in the world， the airmats or the lvmh what makes them enduring why we just get a brand people dress so much hmm it took us century to a our conversation then turned to comparing curtain signature as a brand to airmes curtain as a brand the way tide is a brand and hermaxes of Durant catalog brand yeah， Ferrari doesnt make law uh detergent no weve spent a lot of time studying these brands how do you look at the value of brand well its hard for us not the love brands since we were luggy enough about this is candy for joining measures dollar as our first acquisition and we found out fairly quickly that we could raise the prize every year like tempers and and already care we didnt make the wise go up breaking like that just made the promise go up so we were racing the price back tempers only year for all these forty years so yeah its delivery satisfaction new capital what was what was so good about very little new capital you had two way kitchens and a bunch your stores can we bought it and now is got two big kitchens a bunch your stores well， Charles he was a playboy and he is brother at the company is older brother and dominated completely but when he died， Charlie made his brothers executor and now he needs a lot of money to pay death taxes he doesnt have it as do you know eight mother something later mco they really want the sales so they can pay the das text， and seam is only making for my inprejags we bought it and so that buying opportunity only came about because the family needed liquity to be defects right we only found out about that because July she was out this cruise to why years something with this guy was a client of he doesnt councer also work for bluegip stats who is the company the board？

anyrate thats how we found out about we paid that gap finders she even who never paid one sense that so this worth it 嗯 girlspa you dont bear reputations for bank fighters see there read the world reballing your day long so what do you think so there are categories like cse for like term as where brands lead to pricing power i think your chances are buying one of them so low i would even look only believing looking things that i might find youre not gonna get chance but no curiosity were right to your type yeah， so why do you think theyre extremely well know brands and other categories may be package food or something where we other a lot there a lot of original investors the buy nollywould branded goods and the one they usually start with is nestly and is fillereverythey they dont do a three points better than marriage but its not about hands after that are conversation turned to craft Hines？

and why Hines is able to have pricing power？

while craft is not very everything theres something about the flavor catch up on i gottm fried potato really will you change brands over they want hints and so we could raise the price around pretty budget hey， but you try raise the brat， graph， cheese and every goes in about you you could finally final customer the housewife you dont care that much able with change the script or not why do you think that is that someone would have on the source flavor its habitelsewhere in Korea one guy some Chinese guy across all the sources every single major sourcethrows not at least not of and its because sources have such a particular flavor that no one can imitate the trade secret yeah， huh and that gives pricing we will get used to it like it is that Coca Colas well， yes， your Charlie im curious at age 99 what is something that you believe today that seven year old Charlie would have disagreed with i think i i i knew what i was selling that was funny how are we did that is just so hard i know how hard it is now and all these people who are getting us to twenty year to in thirty， or whatever they all talk is always easy and they get a believe in their own bolship and of course， its not a bad easy its very hard if you were back thirty or forty years old again？

today would you decide to go into the investment business again oh！

probably doessuse my nature， but i didnreally enjoy， three and thirty business once i had enough one in my own irather， just offer with my own money that is a much better way of doing it hmm then because of the force free dont we force to deal with investment baggers be forced to deal with investment consultance be forced to deal with venture capital you dont have the need other you dont have people Charlie if you started with war today in your boll thirty years old do you think you guys would build anything close to what a virtual is today？

we had everybody this has not used a good result almost there were the thing has three things theyre very intelligent they were very hard theyre very lucky and takes all three to get them on this list the silver successful how can you arrange they have two years is a good luck they as a you can start early and keep trying a long time and maybe youll get one or do if you were starting again today you think insurance would still be the vehicle depends on your temperment insurance would be ideal for a certain kind of a temporment， it takes a very patient person to get region insurance takes forever get anything and get takes forever to push anybody aside its very hard to make money ill heard you say as soon as youre wealthy enough to selfensure you should is there any ensure what is the brand private everything of all what crombomes the world too much than file big claims of insurance company but get some fire or something why would you want to pay the your share？

theres stupility not to mention the overhead of course， the insurance company needs to pay all the people that work there yeah？

yeah？

no！

no i say crazy is there any insurance that you carry today i carry no fire insurance anywhere do you carry auto insurance？

yeah i have to we re legally yeah？

yeah？

yeah i dont know Charlie could no i have to and i do im curious being that since these guys are very tech focus ive curious not being a tech person how did you think about the apple investmen？

what gave you the conviction to be so big where is learn is that everybody needs something participation in the twelve comments do better than videos， you need to a three of a list and you have that mindset apple was what you acadeed to be i know whats your friend， what youre gonna select your companies its not very hard to come with idea maybe OK making the list doesnt sound too hard in fact。

there are these acronyms Fang or mama you know Microsoft， apple， Google， Facebook but selecting the one and putting hundreds of billions of dollars into it tensibillion billion undo it to create hundreds of billions of value that to me sound hard to pick the one how did you guys pick the one？

we could find anything else was evaluation or yeah we got cheap we got a day about ten times around body 2015 i believe was the first no！

its fascindy this concept of if you look at distressed at or you look at i think warren in the last virtual letter pointed out its been a handful of really good decisions or you look adventure capital thats classically power law distributed any of these assetclasses comes down to a few really good decisions with high conviction over an entire career yeah！

thats exactly what exactly what its not smooght theres no asset class where you can repeatedly just do no colors that the way for the idea？

this is not going but its very small you mentioned this idea that when we were talking about apple， theres a few companies that is just really important to be in do you think these big tech companies being the winners where all of the pensions and berkture and university endowments and everyones fora one kys being concentrated in these companies do you think that was the natural outcome did we have to end up this way？

yeah， it was natural thats why it happened whois this song？

what causes that well？

just thats what you were nature and competition thats what it causes will we eventually have one eventually this craziness in venture capital when the real all gun studen thats a natural outcome， will we have one twenty trilion dollar companies and then the next biggest companies i i know were gonna everybody we did they just they just happen would you continue investing in China？

whats your position with that well， my position in China has been the Chinese economy has better future prospects were the next twenty years almost any other big economy thats number one number two they leading companies of China are stronger and better and practicing any other lady companies anywhere， and there will make a price so naturally， im only we have some China risk in the Mongerbert video how much China risk well thats not a scientific subject but i dont mind whatever there is eighteen percent or something where where is workdown the Monster family 说给不了没 what about other geopolitical considerations like would you hold tmc at this point well。

i dont like as well so i like something with a real consists or brand of its own like apple im curious what major companies that havent been mentioned do you think people would do well to study the virtues of like studying the virtues of coscope well。

i only study two kinds of companies one im a big gram follower to wait with something is really cheap people to grab a company i i my set her bug it for a while anyway， i do that exactly and i dont with great success time or two but my god marks i dont want to twice in my life time for big games thats it its not like i have was like a hundred times so it is the bit easy yeah a hundred times easy money is almost not exist one type a company is the cigar but whats the other type of company？

the companies the people would do well the uh to study the virtuation companies request good！

it may work out all right！

but thats again getting hard yeah forgetting the prospects the stock had you think about the next ten years for the business i go to pretty well。

one more questionfor you in this area what is your favorite advice to give to young people？

well， i dont give advice just any young people i give it a sum i paid my spots i dont want to be more of a girl the other yeah， its getting hard out there and as always both shit and graziness of course， is gonna be hard where are the attractive opportunities hang out anymore it sounds like everything in the whole world is overpriced is could that be possible they have there courses give it possible sonly possible its likely it actually happened how do the world get so rich if we have all this capital for so few opportunities its the nature of things look at biology produces of advanced creatures like us consider around talking todayin all these objects but doesnt by killing everybody often competations one of the other， for houses， other words， the system that nature uses to get smart is kind about pleasant to the people who were losing so over the last hundred years。

weve brutally shifted all this value from labor to capital， and now capitals all competing to get into a very small set of opportunities well gavel！

never gavel you would wasnt it was all that easy in your back， along that it just was a lot easier and if you continue to get harder， the natural endis that you have yes or not plus blowup with some kind and god knows what happens after unplus， it blow up， you get so your like your withis quite this functional is it too pessimistic of a view to say that the world seems to be out of good ideas to match the amount of capital out there are looking for good ideas it was never easy certainly understand it was never easy its harder now those the two right were old and you pay attention not your family the people you deal with you want a good reputation when your old out not a bad man and i donthink yousaying there are no opportunities whatsoever i think youre saying low low expectations in these fewer bonanses how the beauty of it is you only have to get rich once you dont have to click this out before times just have to do it once well that sort of your philosophy on both sides is you got to be patient for the great opportunities but when they you get a recognizing when they come and pounce。

we turned off the mikes to have dinner and then recorded a little bit more leader in the evening about coscoe and some life advice from Charlie so one coscoquestion that Ive been wanting to ask you is all the puzzle pieces of the los queue count and the high inventory turnover theres just so many things that fit together so beautifully theyre pretty obvious so but how come no one else can pull it off of there so obvious what takes a lot good execution to do it you really have to set up to do it then do it was analysis on every day！

every week， every year for forty years its not so dameasy so you think the successes the magic of the business model and culture yes and yes culture plus models absolutely and very reliable hard working determined execution for forty years i mean they talk about the story of the catch up that you could increase the price of catch up by three percent and nobody would notice but that would destroy everything if you did that right， i would say the the central norm was dont raise smart， get low and keep there forever。

which brings us to the hot dogs is it true the story that when Craig took over， a ceo he did try to raise the price of the hot dogs i dont know i had no conversation is late on it and Jim forbade him well！

i sure Jim would forbade absolutely there was no board level discussion no of the hot done no no those do would not as other was aboard matter discuss the price of hot done the one thing that fascinates me about cosco is they seem to only be able to grow ten percent per year because theyre not capital constrained no amount of money if they were to access it for free out there。

what is it is hard the open too many stores a year new store， new manager new this， new buzz new its hard plus a lot of stuff as they learning to put in place and so they want to do more than they get comfortably handle to store openings you met in China earlier was it twelve to twenty years that Cosgo had the license to operate in China well， David what having there there？

the first store they dread the open in China the first summary one of the thirty thousand dollar bribe no Chinese culture and this would be it and that makes us a better version on James you wouldnt talk it going in China for about thirty years or after ah。

so what change why finally go in？

but finally the board started breaking into noises you started agitating yeah？

yeah who on the board could be excited about the Chinese market yeah？

uh who can who knows？

哈哈哈！

one thing i found fascinating about cosco was the fact that even though there are you know the lowest possible prices their audience sku is wealthy was that an accident that they figured out over time or did they know price they had that figured out or not all the way back in the price club date yes！

you always wanted the rich man try to save money what and its not just that theyre the wealthiest customers theyre smart web theyre pixens yeah！

theypicky wealthy customers on some topics that are outsideof cosgo you mention in the daily journal annual meeting this year that a youngman knowsed the rules and an old man knowsed the exceptions yeah！

thats not saying appears how was that appear kafman yeah！

what are some of the exceptions that you found the most useful in life well！

they take this guidem cause go hot dogs thats an exception there any anybody else will raise a hot dogs long down ago they is dont do it they is notice like that famous you will bring your kids and they have a lot they they know they got only going as it worth extra money to they is dont describe a thing that ive never fully understand i know youre a big fan of the company byd that of course， makes the the the Chinese company that makes batteries and electric vehicles i may be a big fan but im sir hang on by our hat while he learched around the track and they they make me nervous is so aggressive is that dangerous in a company no！

thats what basically nervous across the stage so do you think that companies should try to grow at a lower rate than there capable of in order to be more durable what was you do that of its safeth as easier so worth but i would are you gosk where live dumsomeof these things that are stream like that though its not plus in that where they would smart to not to change their ways on one item or two can it seems like theres a spectram where on the one side theres costgo that is just not a fast growing company because is very difficult to and on bid like yousaying they grew like crazy i mean YouTube real id！

in this year so at least two and i have many cars most of electric thats unhurt of when i ever heard there so way more than mercages， friends more than Tesla right yeah more than ever yeah lots of troubles unlosses they ran the bearable trouble and they made us mistakes they were lucky they could be on the cutting edge of the selection car business its we were acceleration the rule people she had a car with more owps and most real so they young much oh， male has a real 外贝壳 there are a lot of things but right like i like it cart really works in some ways that is better it making a ninety degree turn the right opposite ways turn the wheels night degrees in going yeah oh， no what is ever done that if your cargos flat you could run a hundred miles on the other wheel or something and do they have better economics as they dont have nearly as many parts good summer have you ever had an investment like that before i think you invested something like two hundred and 70 million thats now worth something like 800 d well， very good people have a investment that care thats adventure careful investment it happened to be a senlytraded public company we borders a adventure cable company there was a major game of type play and they just went put the foot right the floor board played it hard had they many factor way both the way the end and we 他就知道有 outgoing in the carbus they can buy a bank of carvices going the carbus i said thats a great yard for you when i was why we want to lose that， after huge mistakes that they were almost went broke with her for early leadership building system almost broke what captivated you about the way that was a genius he was at a PhD in engineering and he could look at someway party he could make that part you know that look at the morning and look at this after he could make it i never see anybody like that he could do anything he is a natural engineer only get down type production exact here and its a big thing its a big lot of town they have been one place its very useful theys up all these problems on these electric cars， the motors in the acceleration 不是进行了是吧？

how would you compare him and bid to eat on in Tesla？

well？

he is a fanatic that knows other actually make things to exams so he has to hes closely ground zero on the root the guy at the ready is better and actually making things？

Charlie you turn a hundred， which is an unbelievable statement on January first of next year do you have any plans im good？

哈哈哈 where is the party going to be？

they get up particle that that totally maxed out the room i can exclusion all over what captivates you these days whats fun？

what pressulyeverything is， when you look back at your your time together when did you have the most fun you have about the same amount of all way through wearing fun now is there a particular error that you remember the most finally that feels like the good old days well， i we remember we were sorry but so those good old days oh！

i mean sollen brothers all in brothers yeah！

lot closemesses we get our big provider solmer？

we could have a big loss we could have more problems than just a loss with solomen right well！

actually， is it on on our what we examined berksure hathway on our podcast are takeaway was that the whole franchise was at risk during solomonbrothers the entire virtual haltheway name and future would you agree with that not so much highway you would survive if you would let the whole investment in solomen go to zero would that if they if it all blown up and where to zero？

we would put not often gone on and done pretty well？

whatyouconsider to be your finance tower？

well， we like to remember the close message will terrible problems get terrible problem on the buffer news the buffer of evening news yeah， we was there two notes there is in that town and we started Sunday edition and started holy war the other guy went broke！

and you were you were both pretty young and enterprising at that point i mean you were the warren entirely of no what was very aggressive？

what wanting the have a good sontheaddition？

what made the newspaper business so attractive at that point in history was a gold mine thats a track that total one when the play in particular with the buffer evening news on the Sunday edition was playing for the local monopoly right to that be a big game， v game， a town and with newspapers you could do that sure i mean newspapers for decades had ebit down mergeons in the fifty sixty percent range right now only the little ones only the little ones oh！

yeah！

the bad ones are the less thirty or forty or twenty five or ive size i said ebit on your presents i pologize cache for margins actually！

do you still feel as a that ebit does a criminal the way that youve demonized it in the past yeah！

i do i think i so i you have a big truck company and take the appreciation out of the trucks out of the earnings your bit line about the earning i mean you witnessed its rise with Malone and tcie and liberty like you when ebit， i was invented as a concept right like what were you thinking oh i never like dump alone the extreme manipulations i dont want to be known as the great manifelator like job is he paid less any complexes on anybody just pushed everything to the drive he many ways ebit that was the community adjusted earnings of its era are you familiar with the community adjustment？

no from we were！

we were！

we were oh， boy maybe um the final question to wrap up what are the set of companies that you think？

are the greatest that youve ever seen either that youve owner that youve not owned whether a lot of great companies are amazes a great company， is he day general motors is a great company？

it just gradually went to help one contract design what do you think about the predictibility of there were a number of companies back when you started？

were you could have said this business will be the same in ten years you think that numbers same today or you think its much hard i think most places have a lot of change in thread of merciation do you think most places had a lot of change in threatened their future even fifty years ago and this story is over？

but the difference somehow i go especially just your company and version a lot of them we have a lot of companies required information of competition， because it been so long as a good what they do and has a good ationic？

what companies can you see today where you can confidently say virtual aside， cosgo aside you can confidently say the business will be as good as it is today in ten years well。

i think of all the companies are pretty good but you can count only say its gonna happen because you may get some guy like i hear him that just wants to push everything and do the right policy relations so no mark is a business is a week califorly 嗯？

Charlie， i have a personal question for you David has a two year old and im Gonna have my first child in a month what advice do you have for us about building families？

oh， well， of course， you gotta get long with everybody you gotta help them to their tough times they help you and so forth yeah， but like it gets not as hard as OK i can have a marriages in a market work that will and whatever work just as well both had to marry somebody else by the way well， you said that the uh best way to have a great spouses to deserve one yeah sure as long is both parties feel that way then its a recipe for success because it is you gotta have trust with your spouse and gets things like education the children over yeah i love that well Charlie thank you yeah yeah thank you Charlie ID good luck to you fairly this is been a lot of people are gonna benefit a lot from hearing this and your your wisdom and theyre gonna learn so much well you know theres something about this pretty hard it doesnt so dameasy just if you go to the ordinary person trying to promote himself as an investment advisor， so guy he just thinks he knows everything about everything and other reserve should be run and so on dont feel that way i will say with the people we get to talk to who build great things every single one of them says it was so hard its so hard you cant build something great without it being so hard Charlie thank so much for doing this with us what to do it be an interesting life your Lydia youre new body will have！

but its not going to be that damn it easy David total life experience and complete boondoggle when i cant believe we got to do this im still pinching myself its now a couple weeks after it actually happened i know with autographcopies of porcharleys almanact to prove it as if the podcast wasnend up and actually for those of you who havent listen back what in 2021 or 2 years years ago， we did a whole threepart series just us covering the whole history of Berkshirhatheway？

part 1 isonmornpart 2 is on Charlie， part 3 is on Berkshire and tedantad all the way up through 2 today i assume many of you have listnet up， but there probably are a bunch of folks who havens so if you want another 9 or 10 hoursof acquiredcontent on berkture。

i really think its some of if not our best work go check those out with that listeners are huge thankyou to tiny for being the soul presenting sponsor of this episode if you have or you know of a wonderful internet business， you should reach out highet tinydot com and just tell them that Ben David and Charlie sent you you can sign up for notifications of new emails every time an episode drops and will be including little tiddbits as we learning things after releasing episodes， corrections updates， things like that and teasing the next episode acquire data fam slash email listen to acq to this is typically where we talk about more uponcoming companies who are earlier in their journeys were ceos who are topic experts in important areas like AI search acq to in any podcast player fdyoufinishthisjoin the slack acquireddatafm slash slack and discuss with the whole acquiredcommunity and if you want to get some of that sweet acquiredmerch that everyones talking about go to acquireddatafm slash store with that listeners will see an extime Wes time who got the truth is you isu is you who got the truth now 哼。