Charlie Munger: Investment Game Today Is Infinitely More Difficult
In his own words Charles Munger goes on to explain how the investment business has gotten harder.
“In the old days, I frequently talk to Warren about the old days, for years and years and years what we did was shoot fish in a barrel. It was so easy we didn’t want to shoot fish while they were moving. We waiting until they slowed down and shot at them with a shot gun. It’s gotten harder and harder. Now we get little edges. It isn’t any less interesting. And we do not make the same returns we made when we’d pick this low hanging fruit off trees that offered a lot of it.”
He continued: “[Buffett’s] changed when he buys airlines and he’s changed when he buys Apple. Think of the hootie we’ve done over the years… ‘Worst business in the world is airlines.’ What do we? We appear in the press with Apple and a bunch of airlines. I don’t think we’ve gone crazy. I think the answer is we’re adapting to a business that’s gotten much more difficult.”
Munger doesn’t think investing today is a “cinch.” But he thinks the odds are a “little bit” in their favor.
He concluded with some classic Munger wisdom.
“I used to say, ‘you have to marry the best person that will have you.’ That’s a rule of life. You have to get by on the best advantage you can get. Things have gotten so difficult in the investment world.”
The only reason it is difficult, Mr. Munger, is because Central Bankers around the world have flooded the market with unlimited and misallocated liquidity. We would still be shooting fish in the barrel if that wasn't the case. Perhaps one day.