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- Charlie Munger praised Apple and Chevron in a Yahoo Finance interview this week.
- Warren Buffett’s business partner blasted crypto, and bemoaned the speculative mania in markets.
- Munger also warned about rising inflation and suggested the Federal Reserve overdid its pandemic stimulus.
Charlie Munger trumpeted Apple, tore into cryptocurrencies, and bemoaned the rampant speculation in financial markets during a Yahoo Finance interview ahead of Daily Journal‘s annual meeting on Wednesday.
Warren Buffett’s 98-year-old business partner also issued a dire warning about inflation, asserted the Federal Reserve overstimulated the economy during the pandemic, and explained why Berkshire boosted its Chevron stake last quarter.
Berkshire Hathaway’s vice-chairman underlined the immense customer loyalty towards Apple, which is by far the biggest holding in Berkshire’s stock portfolio.
“I’ve got zillions of friends who would almost part with their right arm before they would part with their iPhone,” Munger said, adding that the technology giant is “ungodly well-managed.”
The Daily Journal chairman said he wasn’t surprised by crypto’s recent surge in popularity, noting it’s an “ideal currency if you want to commit extortion or kidnapping or a protection racket.”
He questioned why governments should welcome an untraceable technology into their payment systems, run by “a bunch of people who want to get rich quick for doing very little for civilization.”
Munger added that he understands crypto but still hates it, sees the excitement around bitcoin and other tokens as a bad thing, and considers it a “huge mistake to allow it at all.”
The billionaire investor bemoaned the number of people gambling wildly in the stock market, while long-term investors are looking for quality businesses and companies are seeking to raise capital. He described the cocktail of interest as a “speculative orgy” that’s dangerous for the country.
Munger also sounded the alarm on the rate of price increases, which hit a 40-year high in January.
“Inflation is a very serious subject, you can argue it’s the way democracies die,” he said. “It’s the biggest long-range danger we have probably, apart from nuclear war.”
In the interview, Buffett’s right-hand man suggested the Fed went overboard in its efforts to buttress the economy during the pandemic.
“They just threw money at the problem,” Munger said. “They were probably right to fear what was going to happen, and be quite liberal in throwing money at it, but they probably overdid it a little.”
Munger told Yahoo Finance why Berkshire ramped up its Chevron stake by a third in the fourth quarter. The conglomerate has a boatload of cash to deploy, and a 4% dividend from Chevron is more enticing than a 1% return from bonds, he said.
Moreover, Munger and Buffett feel comfortable owning the stock as the energy giant has a “terribly smart CEO” in Michael Wirth, as well as an “admirable culture” that prioritizes safety and decency, the investor said.
Finally, Munger celebrated the decline in executives flying across the world to have face-to-face meetings, noting that he and Buffett largely conduct business via telephone.
“The rest of the world is just coming to what Berkshire has been doing for years and years,” Munger said. “My attitude is, ‘Come on in, the water’s fine.'”
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