Show Notes
We watched the Berkshire Hathaway 2021 Annual Shareholders Meeting so you don’t have to! Enjoy salacious commentary on Warren Buffett’s wildly naive perspective on health care and retail investors, and Charlie Munger’s take on “god awful, immoral “ crypto. And why DOES Buffett have so much of his money in cash right now?? All this and more relentless roasting of two of the wealthiest 90-some-odd-year-olds out there.
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Becca:
[0:02] In today’s Vaginance episode we tackle the very sexy topic, what everyone’s been talking about. We’re sure you’ve been oversaturated with it at this point. We’re doing a deep dive into the Berkshire Hathaway 2021 annual shareholders meeting where we see Warren Buffett, Charlie Munger and two other vice chairman who are both important and one is the other’s successor.
Taylor:
[0:30] Not the stars of the night though.
Becca:
[0:34] Not the stars of the night. We watched them all discuss the… well, it’s 3.5 hours of Q&A where they answer questions and then they have an hour of some other bullshit and we watched it. We watched it all. All of us watched it all individually. We put in 24 hours of work.
Taylor:
[0:43] Without a single drink in hand.
Becca:
[0:47] Sober as a damn…
Taylor:
[0:54] Uh, person holding the flag with a red flag and a bull?
Jewels:
[0:59] Sober as a matador.
Becca:
[1:01] Sober as a… famously sober group of people. Yeah.
Taylor:
[1:06] If we had watched it together we could have made it a drinking game.
Becca:
[1:17] We could have.
Taylor:
[1:18] Missed opportunity.
Jewels:
[1:19] That was the plan and we didn’t schedule it.
Taylor:
[1:21] We did not.
Becca:
[1:22] Yeah, it just didn’t happen. Um, yeah. What words would we have… if we had taken shots every time they said it?
Maggie:
[1:33] Every time Charlie Munger coughed. Fucking crazy. Or just the click of a can.
Taylor:
[1:33] Oh my God. Yes.
Becca:
[1:37] Yes or…
Taylor:
[1:38] Or every time you saw a Diet Coke can on the screen.
Becca:
[1:43] Yeah. Or if he like, if he bit into the peanut brittle into the mic, that happened a couple of times.
Jewels:
[1:49] Urgh. I think morality was the word of the day, morals, immoral.
Taylor:
[1:52] Well, also civilization. Munger said civilized a lot.
Becca:
[1:54] Oh my God. Yeah, a civilized society, dignified citizens.
Taylor:
[2:04] Oh my god.
Jewels:
[2:05] He doesn’t believe in them so I don’t know why… what he’s on about.
Taylor:
[2:08] Mhm. Apparently he’s very concerned about the lack of dignity our society has.
Becca:
[2:12] He truly is.
Taylor:
[2:14] No, I was honestly very stressed about watching this. I don’t know why because I… well I do know why. Because I was convinced that if I watched it it would make me really mad at the world because it’s like a bunch of rich white guys telling us how we should all think and feel, but I was actually more entertained than I thought I would be. Um I probably, because it started off like, they were watching the fucking royal wedding, like, it was like, and now coming to you live, the pre-show for Berkshire Hathaway’s annual meeting and there’s like graphics and like multiple hosts, it was just very, it was like the royal wedding for old white guys.
Becca:
[2:52] Oh my God!
Maggie:
[2:55] My favorite part of the intro was when they fully interrupted someone mid, like answering a question, they were like, oh, sorry, sorry, we’re starting, we’re starting!
Taylor:
[2:57] Sorry, Warren Buffet’s on the screen. Um, I do think before we get too into like everything that happened, a lot of people like myself didn’t really understand what Berkshire Hathaway is, what they do as a company. I just know that Warren Buffett’s like mega famous and wealthy and everyone sucks his dick so…
Becca:
[3:26] When I told someone I was watching Warren Buffett’s annual meeting, they said, is that the actor? And I said, I think you’re thinking of Warren Beatty. And they looked at, they’re like, it’s Warren Beatty.
Taylor:
[3:39] To be fair,in my mind because I had built up Warren Buffett to be this like sex icon of finance. Because every guy, because I never actually googled him before, I only heard old white guys talking about him and every time they did they got this like fangirl glee in their eye. So like to me I’ve only constructed my idea of what Warren Buffett looks like based off of….
Jewels:
[4:01] Sexiest 90 year old ever.
Taylor:
[4:03] So I didn’t know his age, I didn’t know what he looked like. So in my head, Warren Buffett was a combination of Willie Nelson and Matthew McConaughey.
Jewels:
[4:12] Oh, oh, if only, if only.
Taylor:
[4:13] So when I saw him, I didn’t realize it was him talking for the first like 30 minutes. I was like, so when is Warren Buffett coming on?
Jewels:
[4:27] This old dude during the preamble, he needs to get off the stage.
Taylor:
[4:29] Oh my gosh, like who’s this guy that won’t shut up? But yeah, so maybe we should do like a quick like intro to what, who, what is Berkshire Hathaway? What’s the company? What do they do? What are they about?
Becca:
[4:47] And why would we bother watching their meeting. And why should you listen to this episode about us watching this meeting.
Taylor:
[4:48] Yes, exactly. And why should you listen to this? Yeah. What exactly do they do? Are they insurance?
Becca:
[4:57] I was like, I think they’re an insurance company, but somehow they own Pampered Chef. I don’t know.
Taylor:
[5:04] So Berkshire Hathaway, it’s an American multinational conglomerate holding company. They basically own, they’ll like write out fully owned companies. So like, the companies that they own are GEICO, Duracell, Dairy Queen, which I didn’t realize was its own thing. I thought it was like, I assumed it was like, owned by Coca Cola or something. And they own like a bunch of other companies. There’s like 5 or 6 more companies, Pampered Chef apparently.
Becca:
[5:31] Which is an MLM and I’m going to get into it.
Taylor:
[5:33] Yeah, we will get into that. What is Long and Foster? Because it sounds suspicious.
Becca:
[5:38] Yeah. I mean.
Jewels:
[5:38] Sex toys so immoral yeah.
Taylor:
[5:39] It sounds like… okay, real estate um slaw yeah get your head in the game.
Becca:
[5:44] Excellent. What,do y’all know Schlong & Foster?
Maggie:
[5:54] You know what they sell?
Taylor:
[5:54] They do, they do own Fruit of the Loom, so there’s your schlong right there. Um, and diamonds, they just own a bunch of diamonds. They also have majority owning in some companies and then they have a lot of minority holdings in a bunch of companies. Which I think is where like the majority of their stuff, their money goes to like minority owning like American Express…
Jewels:
[6:17] Stock Investments.
Taylor:
[6:27] Stock investments, yeah. So like they own like 26.7% of Craft and 18.8% of American express.They own part of Coca Cola, Bank of America, Apple. And they talked about those different companies in the meeting as well. So that’s kind of what they do. They basically own whole or part of companies and their shareholders, because they make those types of investments into certain companies, their shareholders receive profits from buying into their company by buying shares of Berkshire Hathaway, right? They also sell it.
Becca:
[7:02] Ajeeb. Ajeeb is the chairman for the insurance part.
Taylor:
[7:05] And then they also had a chairman for the environmental section. It seemed like there was one guy that kept talking about…
Becca:
[7:09] Greg was just non-insurance. He’s the non insurance, that’s literally his title.
Jewels:
[7:12] He does the rest of the business.
Becca:
[7:18] Yeah.
Taylor:
[7:19] Oh and they were founded in 1839.
Maggie:
[7:24] Like Warren Buffett himself.
Becca:
[7:27] Roasted.
Taylor:
[7:33] Yeah, 182 years ago, which I did not realize, their company is almost as old as Warren Buffett. Mhm.
Becca:
[7:36] Yeah it was.. okay, so it was founded as a textile manufacturing plant or whatever but it was textiles until like 1962. Like, that’s it. They just did fucking textiles.
Taylor:
[7:50] I didn’t realize that. I mean, he talked a lot about like car companies in the history of that, and I was like, what are you trying?
Maggie:
[7:58] Yeah, he didn’t do that. But no, he talks about when him and Charlie were like hanging out and decided to make a move from textiles to other things back in the early 1800s.
Becca:
[8:00] Yeah. And I was like, well I thought it was crazy that Warren Buffett didn’t enter the scene until like the 60s. For some reason it seems like he does should have been around for a long time before then. But then he is the reason that they they shifted to insurance in addition to textiles but unfortunately textiles was dying. So then that’s when they branched everything out. I thought that was really interesting. Your textiles for over 100 years.
Taylor:
[8:32] That is weird. Well okay, so Warren Buffett, obviously he’s the Chairman and CEO Charles Munger is the Vice Chairman.
Becca:
[8:33] Mm, well, one.
Taylor:
[8:40] And Greg Abel is the Vice Chairman of non-insurance operations and then Ajeeb is the Vice Chairman of insurance operations. So when we talk about those people, that is who we’re talking about and yeah, and I think yes, when the meeting aired, they announced that…
Becca:
[8:51] And those are the four people present for the stakeholder meeting.
Maggie:
[8:51] Yeah. And I think two days after the meeting was aired, they announced that Greg Abel will be Warren Buffett’s successor.
Becca:
[9:00] Yeah. Which Charlie Munger certainly teased hard during the meeting.
Taylor:
[9:01] Yes, he did. They talked about his death a lot.
Maggie:
[9:05] Who Buffet? Yeah. They talked about Buffet’s death a lot. Which… Munger’s 97.
Becca:
[9:12] Yeah, he’s an old man.
Taylor:
[9:15] He is, yeah, he’s like very well spoken. Yeah.
Becca:
[9:16] It is crazy how fucking sharp he is though. He is quick as a whip.
Jewels:
[9:23] I mean, pretty much the few things he said in the meeting were all cutting jabs that were like backhanded sarcasm.
Taylor:
[9:30] Yes, and he just like was very….
Jewels:
[9:32] Every single thing he said was like, and I didn’t know if I liked it or disliked it – it seemed it was quite off-putting because like, you didn’t want to answer the question, you just wanted to be able to smirk after you said this.
Taylor:
[9:39] I agree. Yes, he very much like wanted to be the one that while Warren Buffett was kind of like the being like, you know the good yes, it was very good cop, bad cop.
Becca:
[9:53] Yes.
Taylor:
[9:55] Like you could tell Munger wanted to kind of go off more and be like fucking civilization is crumbling and the government’s evil, but he was holding back, but he like wanted his you know, stance to be known. A very smug kind of like, it was like I kind of hated it but I also was kind of like okay. I don’t know, it’s interesting.
Jewels:
[10:11] Yeah, it was just so quippy and not really getting into the depth of anything.
Taylor:
[10:12] Yes. And I was telling Becca earlier, I felt like what was annoying to me was everything they said. It was just like a fact to them instead of kind of like, oh well this could be like this is from my experience, it was very much like this is just reality that is such a typical like thing to do, you know, like a person in their stance to just assume whatever they believe is just fact or reality.
Becca:
[10:39] It’s because they see themselves and their worshippers see them, see these two men as 100% rational beings, like they don’t equate emotion to investing. They are purely rational. It’s very like Ayn Rand objectivism sort of shit, and which is hilarious because you watch Charlie Munger get worked up over the word cryptocurrency and you’re like, oh yeah, the purely emotionless rational man over here. I thought that was very interesting. Like they’re being held as this absolute pinnacle of rationality, which is about, no human can be that, that’s not a human trait.
Taylor:
[11:18] Yeah. They also… just some more facts. They, their net income last year was 55.7 billion, which was a down here for them.
Maggie:
[11:28] Just the four of them? Oh the company, I was like damn!
Taylor:
[11:30] Yeah. So that was like relatively low compared to like previous years. So they’re a company that, I mean generates like billions of dollars worth of money annually. So they talk about that a lot of the meeting as well. But what I thought was also interesting, and they talk about this in the meeting as well, is that beginning in 2016, they acquired large holdings and the majority of US airline carriers and they dumped a lot of those during Covid when the economy kind of started crashing, they like dumped a lot of their airline stocks and, one of their investors, one of their shareholders asked them about that as well why they did that. Which I thought was interesting because Warren Buffett’s always saying like, don’t panic sell. That’s exactly what he did.
Jewels:
[12:10] Don’t panic sell.
Taylor:
[12:13] And so they kind of talk about that in the meeting as well.
Becca:
[12:15] Did you see the defense of it where they were like…
Jewels:
[12:19] Oh, we did it so that they could be eligible for the government bailout. Yeah, that is not at all the case.
Taylor:
[12:25] Yeah. How kind of you. Yeah. I just love that shit. Like everyone else panic sells because they’re idiots, but when you do, it’s for the betterment of civilization.
Jewels:
[12:29] Yeah. You.
Becca:
[12:30] Look Warren.
Jewels:
[12:35] Because we thought the taxpayers should pick up that bill instead of the largest investor in that company.
Becca:
[12:41] Yeah, that was a truly moral decision.
Jewels:
[12:43] Mm. So moral, passing it off on all those little guys.
Taylor:
[12:48] Yeah. Um I did also want to talk a little bit about the pre-show. I don’t know how much of that y’all watched, but it was hilarious to me. Yeah, it was ridiculous. Like they basically got like two hot women to interviewbecause they’re like no one’s going to watch a pre-show unless we get two hot women interviewing a bunch of gross old guys.
Jewels:
[12:58] Okay. The pre show and the after show, I had this thought today, I was like, this is the most American thing ever, to take finance reporting and turn it into sports.
Taylor:
[13:13] Yes. 100%. Yeah.
Maggie:
[13:17] What felt very sports like to me.
Taylor:
[13:20] But there was one guy they interviewed that I thought was such a fucking asshole.
Maggie:
[13:27] In the pre show or after?
Taylor:
[13:32] Oh yeah, I know. The guy in the pre show, he like, okay, so his name was William Green. He’s the writer of Richer Wiser Happier, which I’m assuming is a book about how to succeed as a gross white man.
Becca:
[13:50] Your definitive guide on how to succeed as a gross white man.
Taylor:
[13:53] It’s definitely something my dad probably had on his shelf. Okay. So he just basically just fucking fangirls, hard on charlie munger the whole time. And he literally one of his quotes I wrote on a lot of quotes and they just wrote LOLOL next to them. One of his quotes is – we’re talking about Charlie Munger. ‘He can see the essence of what any subject is about before you complete the sentence’, which I thought was the most fucking bullshit statement. Like really this guy is so fucking amazing that he can see the essence of whatever you little people are talking about before you even finish your sentence. That is insane to me. That is literally deity like level.
Jewels:
[14:41] I think I threw up in my mouth when I heard that.
Taylor:
[14:42] Yeah. Yeah. I was like oh my God.
Becca:
[14:44] And this guy, he truly believes that, you can see it on his little Zoom face, he was glowing.
Jewels:
[14:46] Yes unfortunately… he’s unfortunately not the only one.
Taylor:
[14:48] Oh so many so many. But he also said that one of the keys to Munger success is that he focuses on what he calls Munger reducing standard stupidities. So when he talks about some recipes he means like panic selling and things that like you know, kind of newbie investors might do, which is to me like really condescending and I texted y’all a little bit about it, but it’s just like okay, first of all, standard stupidities. Um, the average person is not a fucking investor, like most people don’t know much about investing, so to call someone dumb for that is like pretty fucking elitist because I don’t see you fucking teaching anybody about investing. Like they even said in the meeting, why would we tell people are secrets? Like they want to keep them secrets about how to pick companies and the best investment practices they’ll give you like little crumbles here and there, but they’re not telling you how to really make the money because they don’t want you to know. So then you’re turning around and calling people stupid for not knowing like your secrets. Like go fuck yourself.
Becca:
[15:57] Actually, okay, so I kind of liked that little bit because he talked about, um it’s a lot harder to be smart than it is to avoid being stupid. He was like, if you can just avoid certain pitfalls of investing, then you can be really successful instead of trying to be like the smartest investor in the world and timing everything perfectly. All you have to do is not make the dumb mistakes. And I actually thought that was pretty good advice, right?
Taylor:
[16:24] It’s good advice but it sounds a little condescending. It’s patronizing. Why do you have to..? I don’t know, I just.
Becca:
[16:27] Yeah, it was patronizing.
Jewels:
[16:32] I think before this meeting, when I have read that, Charlie Munger says things like that, I didn’t believe it was as condescending as I now believe. After watching Charlie Mungers delivery of everything he said in the meeting, after the meeting, I was like, oh my God, now that I can read his quotes in his voice and tone, they have a whole other level.
Becca:
[16:42] Uh huh. Yeah, you’re right. He’s wildly consciousness.
Taylor:
[16:57] Yeah, one of his quotes is literally, the secret to succeed in life is becoming non-idiotic and living a long time. Like what? What does that even fucking mean? Like what is your definition of non-idiotic? Like I understand to you it’s different than 99% of people on the planet because you have completely different experiences and knowledge that a lot of people don’t have because their whole life isn’t dedicated to fucking investing. But I don’t know. It just like something about like that going in kind of rubbed me the wrong way where I was like, these guys clearly think that they are all fucking geniuses. Like the people that follow Munger and Buffett love that shit because they’re like, yeah, everyone else is dumb, but we know the secrets. You know, it was like, my dad, my dad did the same shit where he was like, you know, I know the investing secrets, so therefore I’m not an idiot. Like everybody else. I also, did y’all look at any of the comments going on?
Maggie:
[17:57] I did at the beginning and then I gave up because there’s too many.
Jewels:
[17:58] I had to hide it, I had to hide the comments screen.
Taylor:
[18:01] There was so many fucking trolls. It was basically like a mixture of people fan girling over like where’s Buffet? We want to see Buffet. Like show him to us.
Becca:
[18:13] Prove that he’s alive.
Taylor:
[18:20] And then it was just like fucking like rocket ships and people being like AFC baby. Yeah, fucking going to the moon. Like so many fucking games like our WallStreetBets and GameStop trolls. Just constant, constant.
Taylor:
[18:32] Yeah, it was pretty funny. There’s a lot of Doge comments. Yeah. I took screen grabs of some of them that I thought were funny. Oh, someone said Berkshire Schmuck-away. Just like so stupid. Anyway, it was entertaining.
Becca:
[18:50] So, yeah.
Maggie:
[18:51] So you had a blast is what I’m hearing.
Taylor:
[18:51] Yeah. The pre-show was really great.
Jewels:
[18:58] This is now your new favorite event of the year.
Becca:
[18:58] Oh did you hear what they call it in like every finance article that talks about this fucking event? Woodstock for capitalists. Didn’t hear that one place, that’s odd. I know. Well last year, well not last year because it was also Covid last year, pre-Covid that they had this in person, shareholders actually show up there. There were 40,000 people there. It’s fucking insane. They probably were all on hallucinogens. I don’t know.
Maggie:
[19:27] I I’m struggling to imagine being like, I’m going to take some time off.
Becca:
[19:34] I’m gonna go to fucking Omaha.
Maggie:
[19:35] Yeah, I’m gonna go to fucking Omaha and watched you old men talk for six hours.
Taylor:
[19:42] Well they probably thought would be their last chance because one of them is going to die by next year.
Maggie:
[19:47] Why do you care? Like watch it online.
Becca:
[19:52] Is the true… truly gods. So the reason we four people decided to sit and watch this six hour meeting was because these two men who have predominantly showed are some of the most powerful players in the market that many of us are invested in. Either actively or passively. So we thought it would be good to educate ourselves on how they see the market and what they’re doing and what their intentions are, And their Class A stock is the highest priced stock in the history of the stock market at over $420,000, I think right now.
Taylor:
[20:30] One of the pre show interviewees said that it was undervalued at the moment. Did you all see that? They interviewed someone that was like well based on my calculations which are the same calculations that Warren Buffett happens to use.
Uh like as if he didn’t fucking know that and he came up with it.
Becca:
[20:45] Me and Warren weirdly came up with the same.
Taylor:
[20:47] But anyway, he said it’s weird that you I do this thing where you take cash and investments per share, put it on 11 multiple and then pre-taxed earnings of the operating business.
Taylor:
[21:00] So in his evaluation of Berkshire Hathaway’s intrinsic value he calculated that it is worth $475,000 per share. So he thinks that at 400 and whatever, 25 it is right now or 412, that it’s a discount. So it’s a buy for him. Yeah. Get in there.
Becca:
[21:23] Well get in there.
Maggie:
[21:26] I would like to point out that I think early on before we get too much deeper that I think all four of us had a lot we did not like about this meeting with that being said, Warren Buffett does have some good investment advice hidden beneath all of the things that we are about to bash.
Taylor:
[21:37] Oh yeah. And I have that in my notes to bring up. There are definitely things I I there are some things that I agree with, my humble opinion with Warren Buffett.
Jewels:
[21:56] Yeah. I think that we can acknowledge the level of success that these men have had in the market over a long period of time and we can acknowledge that some of their advice is really great and that they’ve also made major fuck ups in the last few years and investments which are kind of interesting and I think because there is such a fanboy/fangirl situation where people view them as gods, it has sort of repelled us so far in the opposite direction, that our views are just there to balance out the level of god like worship that has happened.
Becca:
[22:34] Yeah. Like, we will say it though. I don’t think it needs to be said that these 90 some odd year old men have dedicated their lives to financial education and we are novices in the finance world. We understand that, that is not something that… yeah.
Jewels:
[22:48] You don’t say.
Taylor:
[22:52] You don’t need to comment and be like, ya’ll don’t fucking know.
Becca:
[22:53] Yeah. We are providing some hot takes for free.
Jewels:
[23:00] Amateur women take down Warren Buffett.
Taylor:
[23:04] I can just see it on Motley Crew or Molly Ball.
Becca:
[23:04] Yeah. Oh my God.
Jewels:
[23:10] Motley Crew’s like the amateur finance blog.
Maggie:
[23:13] That would be incredible. But no.
Taylor:
[23:14] Motley Crew comments on…
Becca:
[23:15] Yeah. Mhm. It’s about time they weigh in on this anyways.
Taylor:
[23:25] Uh huh. Oh my God. Yeah. But also like, you know, they’re still humans, they’re still people and they still see the world through their viewpoint, which is a billionaire old white man. So you know, it is, I think important as we’ve said before, to kind of give other perspectives, like they’re not necessarily thinking about things, from a, you know, a single mom struggling to get by viewpoint of how the world should run. So it is important to kind of like critically take an eye to anything, um that people say they are in the spotlight that are, you know, moving markets and making big decisions that have economic impacts.
Becca:
[24:08] Definitely. Also their views on how, how are…
Taylor:
[24:12] Women should pick their spouses.
Becca:
[24:14] Well, yeah, that too, and well and on how, um our health care system isn’t so bad. It really highlighted how disconnected they are from what it’s like to receive health care as a non billionaire. They’re like, when you’re in the waiting room, no one there’s worried about how much it’s going to cost. Okay.
Jewels:
[24:32] Everyone there is worried about how much it’s going to cost.
Maggie:
[24:39] I think they even said like, there aren’t even that many people in there.
Taylor:
[24:43] Oh my God, what magical fucking doctor’s office are you going to?
Becca:
[24:46] They literally…
Maggie:
[24:47] Yeah, at the billionaire ER there probably aren’t that many people in the waiting room and the ones who were in there aren’t that worried about the bill.
Jewels:
[24:47] Because there aren’t that many of you.
Taylor:
[24:51] Yeah, maybe at the fucking ER in Santa Monica.
Becca:
[24:59] Yeah. And Warren was like, yeah, most people don’t feel or care about the cost of health care because their employers take it out of their check.
Taylor:
[25:09] Oh my God.
Becca:
[25:09] And I was like, oh my God, you’re so right, when it’s never come up with me, never thought about it.
Jewels:
[25:11] Wow.
Becca:
[25:16] I know. So, like, I mean, I mean talk about worship at the altar of them, they worship at the altar of just business, just capitalism, business solves all problems.
Taylor:
[25:18] Yes. Oh my God. So many comments about capitalism is like the yeah, the like, end all, be all.
Becca:
[25:31] Yeah.
Taylor:
[25:33] Which, I’m not disagreeing that capitalism can be great. But man, it was just like,
Becca:
[25:36] This was a church service.
Taylor:
[25:36] Yeah, it was a church service and capitalism was their god.
Maggie:
[25:46] Jesus and the Holy Ghost.
Jewels:
[25:47] He is kind of… which one is fading faster into the ghost hood?
Becca:
[25:48] I think it’s obvious.
Maggie:
[25:53] Munger’s definitely the Holy Ghost.
Jewels:
[25:57] Yeah. I do find the worship of capitalism really interesting because I still stand by the view that pure capitalism is a fascinating system and it is not what we have in this country.
Becca:
[26:09] Mm hmm.
Jewels:
[26:10] The overlap between government bureaucracy, legislation directing capitalism for better and worse in many ways in this country is not pure capitalism. And so it’s definitely set different rules for the game that you wouldn’t have in just a capitalist market.
Becca:
[26:28] I think Charlie would agree with you very strongly on that.
Taylor:
[26:31] Munger also talked a lot about China and China’s version of capitalism. They were like it was great, they took communism, they took capitalism, they combined it now, they’re all billionaires.
Becca:
[26:38] I could not believe how, yeah, Charlie Munger is deeply anti socialism, but he’s kind of on the fence with communism.
Jewels:
[26:39] That was really interesting.
Taylor:
[26:40] He respects the Chinese communism.
Jewels:
[26:48] Well, as long as you have a stronghold government who comes in and says it’s okay, then I’m okay with it.
Becca:
[26:50] Yeah, that was really interesting.
Taylor:
[26:53] Yeah. So okay when the meeting began, what really got me chuckling, Munger, no sorry Buffet starts going on and on about him and Munger’s like, love affair and how they like, you know when they first met Buffett learned that Charlie lived in the same house for the past 60 years, like they literally have both lived in the same house for fucking decades.
Maggie:
[27:28] Like across the street from each other too.
Taylor:
[27:29] Yes and it goes on and on about this and then, so in the comments just goes ‘get a new house bro’, like all in caps, it’s just like fucking trolling them about this stupid house.
Maggie:
[27:35] Because they were talking to them about um California taxes, right?
Taylor:
[27:44] Find them um California, right? And they were like, we think they’re really terrible but we’re not moving.
Taylor:
[27:53] Um to quote Munger, he literally said I would not move across the street if it would save my children 15 million in property taxes.
Becca:
[28:04] Was that Munger or Warren? Oh my God.
Taylor:
[28:05] It was Munger.
Maggie:
[28:06] But didn’t they like really bash on California? They live in California, right?
Taylor:
[28:11] Oh yeah. Yeah they were like what kind of state runs it to where all of your millionaires leave?
Becca:
[28:12] Yeah.
Jewels:
[28:17] Why would you drive out all the people who contribute to charities.
Becca:
[28:21] Yeah they said the rich people are old and don’t do crimes and they donate to charity. Why would you drive out the wealthiest people?
Jewels:
[28:27] Oh, all the young people are the one who do crimes eh? Just young people are criminals.
Taylor:
[28:30] Wow.
Becca:
[28:32] Yeah. Isn’t it great? How rich people don’t do crimes?
Taylor:
[28:34] Wow wow. I guess I guess white collar crimes don’t count in his mind wow, interesting how no old people commit crimes.
Jewels:
[28:36] I guess not.
Becca:
[28:39] Yeah they don’t definitively, because morally they’re just not as bad.
Taylor:
[28:47] Like stabbing someone for $15 because you’re starving. That’s bad. But stabbing someone in the back for 15 million because you want even more. That’s fine, totally fine.
Jewels:
[28:56] Perfectly moral.
Becca:
[28:58] It’s moral.
Maggie:
[28:58] Have a correction Munger lives in California, Buffet lives in Omaha.
Taylor:
[28:59] Yeah I think, didn’t they used to live next to each other?
Becca:
[29:02] Yep. They used to live in LA together and then Warren and his wife moved back to Omaha.
Jewels:
[29:11] Okay. I want to know what this house is that he’s lived in for so long though, because it probably wasn’t his first home. Was he already super rich and bought a mansion? They just never had to move for 60 years.
Taylor:
[29:20] I think that he just lives in a crummy old house.
Becca:
[29:22] Yeah. Look it up – at a little penny pinching goose.
Taylor:
[29:25] I don’t know. I tried looking up where he lived actually. I actually, I did google it and I could not find his house.
Becca:
[29:32] Why wouldn’t he list his house publicly for us?
Taylor:
[29:32] Why doesn’t he list it? It’s really annoying.
Jewels:
[29:33] Got a note, tell us.
Taylor:
[29:43] One of my notes was Warren Buffet starts the meeting by introducing directors and uh directors in painful detail about how he met them. It’s boring, yep.
Jewels:
[29:54] Yes. And they’re all men.
Taylor:
[29:59] And they all, he just literally just talks about where they live.
Taylor:
[30:03] Oh my God, the seas candy shit, weird. It was weird.
Maggie:
[30:09] They just kept they kept like advertising See’s Candy.
Taylor:
[30:09] I took a screen grab and put it in my notes because I thought it was so funny.
Maggie:
[30:16] Throughout the whole thing, they just kept talking about See’s Candy.
Jewels:
[30:27] So sure you get okay.
Maggie:
[30:29] Oh yes, yeah, yeah. And then they like all had See’s Candies with them and I don’t know, it just felt weird.
Taylor:
[30:35] It was weird, it was like, it was very weird. It was very weird.
Becca:
[30:40] Look, as we learned, See’s Candies have low overhead costs and high profit margin. It’s a good investment.
Maggie:
[30:45] I think that’s the reason, but still.
Jewels:
[30:46] Yeah, they rip off their customers and we love them.
Becca:
[30:50] Love it.
Jewels:
[30:51] Uh it had very MLM-ey feel, I’m just going to throw it back to that.
Becca:
[30:54] Well isn’t that very interesting? I can’t get over that. I had no idea. That was crazy bananas. know that they own an.
Jewels:
[31:02] Do they have crazy bananas? Is that one of their offerings?
Becca:
[31:05] Chocolate covered. bananas.
Jewels:
[31:08] The MLM undertones.
Taylor:
[31:19] He won’t tell you because it’s part of their fucking secrets.
Becca:
[31:21] Well I’ve been reading, I’ve been trying to read about it. There’s not much out there. They don’t even talk about Pampered Chef membership, doesn’t even come up. Even though in the Wikipedia it’s like the fifth company they list of them own whole owning whole.
Jewels:
[31:32] Well, because being at the top of an MLM is extremely lucrative.
Taylor:
[31:33] Uh huh.
Becca:
[31:37] Very lucrative.
Maggie:
[31:37] Yeah, they want the money, they don’t care about morals.
Becca:
[31:41] It is so fucking objectively exploitive.
Taylor:
[31:44] Yeah, exploitative.
Maggie:
[31:46] Was going to say expletive.
Jewels:
[31:48] Yeah, it is so beeeep.
Taylor:
[31:50] Yeah. No you’re right. That was what was crazy to me was they kept talking about morals and people kept trying to press them on it. Like what are the more implications of owning insurance companies? What are the moral implications of owning all these companies that you have yet? You’re like against nicotine or whatever but you own shares in all these other companies that have more applications. The way that they answer is like they honestly don’t see anything wrong with it. Like in their mind…
Maggie:
[32:17] Didn’t he say that tobacco was a really good business?
Taylor:
[32:21] Yeah but didn’t they sell out of it because his…
Taylor:
[32:27] They didn’t invest in because he at the time, when they were thinking about it they met with this company and they were like oh they were great guys to talk about chewing tobacco and how their grandma lived to 90 chewing tobacco. And we really liked them, we’re gonna invest in them. And then I called my son in law and he worked for uh, I forget it was like one of them, he was like in the medical field or something. He like worked for whatever at the time, research at the time and told me that it was actually really bad and I had no idea, so we decided not to invest in it. And that’s like the one thing that like the reason why he still doesn’t do it, like he just doesn’t, there’s no rhyme or reason to why he thinks some things are morally okay and other things aren’t, it’s just whatever benefits them and what doesn’t.
Becca:
[33:03] Well, I don’t know if that’s mostly true because he was saying they didn’t invest in tobacco even though they knew it would be a good financial investment. But what makes it interesting is this conversation was happening because someone asked why they invested in Chevron. Um and so it was like if you see tobacco as an objective bad and you see gambling as an objective bad, which, oh boy do they? And they see a lot of things as gambling.
Becca:
[33:32] It was human nature, but like they’re not going to invest in a gambling company like Draft Kings or whatever.
Maggie:
[33:35] Said it was human nature.
Becca:
[33:41] So someone asked why did they invest in Chevron? Which most environmentalists or anyone who does science might argue is contributing to negative environmental impact. So they, their response was like, look, we don’t, we’re not scientists, we’re not going to claim to understand global warming unlike you social justice warriors. Okay. Uh, we don’t really know what’s going on so we don’t think this is objective bad. Anyways. Yeah.
Taylor:
[34:12] Munger literally said he thought energy, he thought oil companies were great.
Becca:
[34:16] Yeah. I want my daughter to marry an oil baron.
Jewels:
[34:20] I think he literally said the difference between us and everyone else is that we’re just humble enough to not think we know the right answer. We’re more humble. That’s what Munger said, if I am recalling correctly, so humble, the humility of bounds.
Becca:
[34:32] Which they are, if there’s any word to describe those men, it’s the humbled.
Jewels:
[34:39] Okay, tell us about marrying a Chevron.
Becca:
[34:42] Well, so this actually takes us back to where the motivation to do this episode came from originally. And it’s because I listened to a different finance podcast um where they talked about the Berkshire Hathaway meeting, but they are big, big, big, big, big, big, big, big, big, big, big Warren Buffett fans. So it was very, it felt very one sided, even though it’s two hosts and they have different views. They’re different generations, which is notable, but really they are truly Warren Buffett fans live and die. So I was listening to it and I sent the link to the podcast. Everyone like, you’ll have to listen to this to hear a man lose his fucking mind over this goddamn meeting. And he truly did. I re-listened to it today. I was like this guy, holy shit, anyways, he was going on and on and on about socialism and young people and what’s morally correct and what’s ethical,
and there’s a point in the Berkshire Hathaway meeting where the question I just brought up, where why are you investing in Chevron if you don’t invest in tobacco and gambling? And Charlie Munger responded with, ‘so if your daughter is getting married to a man, and the only thing you know about him is what he does, would you rather her marry a man who works at Chevron or an English professor from Swarthmore? And that was the end of his answer.
Taylor:
[36:08] And like everyone chuckled like they knew what he meant.
Becca:
[36:10] Yeah. And so the podcast, I listened to the man, the older gentleman who is one of the hosts went on to explain an excruciatingly emotional, some would say hysterical.
Taylor:
[36:13] Men aren’t emotional, only women are.
Jewels:
[36:26] Gleefully vindictive.
Becca:
[36:29] Like truly.
Taylor:
[36:31] Like every just like deep seated impulse just was, urgh!
Becca:
[36:35] Bleeding between his teeth.
Jewels:
[36:36] I was so uncomfortable. For the first half of the second part of that podcast.
Becca:
[36:42] I know, yeah.
Jewels:
[36:45] I wanted to leave the room. It was like being caught in a weird argument between the two people.
Becca:
[36:48] Yes, the hosts are father and daughter, if that helps kind of contextual eyes and they are both Warren Buffett fans, but certainly different perspectives on life. So he was going off on how Charlie Munger was clearly making a, this was a huge dog whistle apparently, that he is very anti socialism and he is pro capitalism in, he wanted his daughter in this hypothetical scenario to marry the, not just the rational businessman, he wanted his daughter to marry the, ethically correct man and the man who works for Chevron, we know nothing else about him said he works for an oil company, he is ethically correct and the man who is the English professor at the liberal arts colleges, ethically incorrect. Anyways, that segment alone was like is what sparked this whole episode, like what the fuck are they even talking about? And is this really what the two richest men in the world in this company are talking, not literally – are talking about in their meeting. So that’s why we had to listen to it. After listening to that insane episode.
Taylor:
[37:55] It made me so angry just hearing that and then watching it again, and that when that moment happened, where he said that I wanted to scream like it’s just so, it speaks to his world view point on so many levels. Why are you bringing up this weird example where hypothetically you’re talking about your daughter deciding her future? It makes no sense like what are you even talking about? This is a fucking investment meeting, you’re talking about someone’s daughter getting married to a guy working at Chevron hypothetically.
Jewels:
[38:26] This also felt super elitist to me, and y’all can let me know if it’s just me, but does anyone else not know Swarthmore is?
Becca:
[38:34] I googled it. I mean I they talked about in that episode and they talked about it just being a liberal arts college, but I had never heard of it, no.
Jewels:
[38:42] But it must be like, it just felt very elitist like you picked this, not common knowledge, liberal arts university.
Becca:
[38:51] It literally sounds like, when he said Swarthmore, I was like, is that a word you’re making up to sound? Yeah, it sounds made up to start to make fun of liberal arts college. But no, it’s a word, it’s a college.
Taylor:
[39:03] It’s a word. Well, I also just didn’t make sense to me because I was like, how is that ethically? Like how is your view of the world so twisted that you think the person working at Chevron is more ethical than the liberal arts professor? I originally thought it was about money. I thought he was saying I would rather my daughter marry a wealthy man than like a poor college professor.
Jewels:
[39:24] And I’m like, how do you judge anyone by their profession that is so single-minded. Unless their profession is like, oh, I’m a coyote that runs illegally runs people and extorts them across the border. Then I’d be like, okay, I’m probably going to judge your character.
Taylor:
[39:31] A politician.
Maggie:
[39:41] I thought you’d been a literal coyote, I was like where is this going?
Becca:
[39:45] For the sake of that argument. Even meeting someone who’s a coyote by trade, you could be like…
Jewels:
[39:50] Who’s extorting them? That’s forcing them into that position.
Becca:
[39:53] They could be extorted or they could be in a place where they truly think they’re doing good or they’re bringing people to a… you know? Like there is no object, this is not objective, you know.
Jewels:
[39:57] Sure. Sure. The world is so much more complicated.
Taylor:
[40:03] But to them it is, to them, it’s like that’s the obvious answer. And they just said it like, oh yeah, of course, everyone sees it this way, and you’re like, is there a single woman in the room that would?
Jewels:
[40:15] For them to be passing judgment on anyone else’s morality is such…
Becca:
[40:17] Yeah.
Maggie:
[40:22] That’s the worst part of the whole thing for me, Yeah, that was the part that bothered me most and it’s literally the entire meeting.
Becca:
[40:23] Well that’s the crux of it, isn’t it? Yeah. Because it’s not a, it’s not about what are they investing? What aren’t they? Because sure they kno money and we’re not going to argue that, it’s that they keep claiming these moral, they keep speaking as if they’re these truly objective, all knowing beings who are establishing the morality indicator and like this is where we land on the morality indicator for in this industry and this and this and this, and then the people who follow them see them as these like true north sort of compasses when it comes to morality. And it’s like if they didn’t keep claiming this is the moral decision. Buybacks instead of dividends is the moral decision.
Jewels:
[41:10] Except when everyone else does it.
Becca:
[41:10] And yeah, like it’s it’s so weird that they just keep making these weird moral claims, just say this makes us more money. Our shareholders want us to make more money. That’s why we did this. Like they can’t say that. Yeah.
Maggie:
[41:26] But again, that’s not even it because that’s not always true. Like you said, it seems almost random what they’re choosing.
Becca:
[41:28] I know.
Taylor:
[41:35] Almost like there are people with flaws and don’t fucking know everything.
Maggie:
[41:39] What was the really good cryptocurrency quote from Munger?
Becca:
[41:41] Oh my God, take it away Julie.
Taylor:
[41:45] I knew you were gonna say, I was like what? When I heard that I was like oooh Julie’s gonna have words.
Jewels:
[41:46] Munger starts by saying cryptocurrency is a financial product invented out of thin air. Okay, show me a financial product that wasn’t invented out of thin air. And also, cryptocurrencies are modeled after many other commonplace daily used financial products known as currencies.
Taylor:
[42:04] Yeah. Kind of like how the Federal Reserve decided out of nowhere that they were just going to start printing money and deciding inflation rates that affect the entire fucking economy of the entire fucking world. Like go fuck yourself, go fuck yourself.
Jewels:
[42:27] Mhm. So that was one and then ‘Of course I hate the Bitcoin success’.
Taylor:
[42:29] I also wrote that down.
Jewels:
[42:33] These people are supposed to be rationally assessing asset classes. But he hates the Bitcoin success. It gets under, right under his skin.
Taylor:
[42:45] I hate the Bitcoin success.
Jewels:
[42:48] I don’t welcome a currency that is so useful to kidnappers and extortionists.
Taylor:
[42:50] Right, so.
Becca:
[42:54] Well, that’s the only people who use it.
Taylor:
[42:54] Yep right, I mean no one that uses cash extorts people or kidnaps anybody, no one’s ever asked for a briefcase full of cash to bribe someone with.
Jewels:
[42:56] Yeah my first thought, and I ran this past Zach. I told him that quote and he said almost word for word the thought I had which was um, hello? The US dollar is literally very likely the most common currency of corruption globally. The US dollar is used… I would bet money on it. It’s at least in the top three.
Taylor:
[43:24] Would you bet Bitcoin though or would you bet US?
Jewels:
[43:30] Oh Bitcoin’s more valuable. So I think I’d be willing to bet a Bitcoin that its ranking in the top three currencies used in global crime and corruption because it is valuable everywhere.
Taylor:
[43:38] Mhm. But if Munger says that it’s not then it must be.
Jewels:
[43:45] Mhm. Another point on that it’s so laughable to me that he thinks that’s what Cryptocurrency is for. So there are two things here, criminals are early adopters of technology. They were the first to like massively adopt things like beepers and cellphones because they have great utility when you’re doing crimes. So yes, early Bitcoin was heavily used by criminals because they are early adopters of technology, not because this technology was made for criminals. Second point.
Maggie:
[44:17] Julie’s angry.
Jewels:
[44:18] Uh huh. God damn it, motherfucker. Oh okay, so also the fact that it’s used by criminals, he hints at the fact that the reason they use it is because it’s like hidden money are, intractable or anonymous and this is not actually true, it is more anonymous but it is perfectly trackable and, the government can easily figure out who it was.
Taylor:
[44:37] Isn’t that like the whole thing is that there’s ledgers?
Jewels:
[44:39] Is that everything is recorded. There’s an amazing podcast and I’ll put a link in the show notes, but there was an amazing podcast episode with Katie Han who is on the Coinbase board and she was a badass federal prosecutor who, she was like on some of the early Bitcoin crimes because there were other federal prosecutors who were supposed to be tracking down the guy who started the Silk Road, and when they tracked him down, they started extorting him and they became criminals as well. And Katie Han was the one who found them out. So she like broke the case and tracked all these people through early Bitcoin when we didn’t even have a lot of knowledge or anything about how you do that or blockchains. Like all this was so new and she fucking busted them up, she’s a badass. And so she talks a lot about the utility and the security side and the federal government side and all of this about blockchain, Bitcoin and cryptocurrency.
Taylor:
[45:34] He clearly has no idea what it is or how it works.
Jewels:
[45:36] Right? That was the impression I got. I was just like, wow, y’all don’t understand what cryptocurrency is. I can totally understand if you are an investor assessing whether it’s an asset class you want to put money into.
Taylor:
[45:50] Right.
Jewels:
[45:50] But to just wholesale disregard the technology behind it is like being anti the internet in the late 90s, it’s made out of thin air.
Taylor:
[45:53] You know what I think it is though. I think they’re I think they’re covering their asses to make themselves look good because they’re embarrassed that they didn’t invest in it or like they still don’t completely understand it and they’re like, I don’t understand it so we can’t invest in it but and so they’re just like backtracking and being like, uh well we don’t, you know, it’s morally wrong so we’re not gonna invest in it when like clearly, you don’t know what the fuck you’re talking about. You just don’t want people to know you don’t what the fuck you’re talking about.
Jewels:
[46:24] So that would make more sense to me if we weren’t still so early on the adoption curve, like institutional money has only just recently started moving into cryptocurrency.
Taylor:
[46:29] I think they’re scared though. I think they’re scared.
Jewels:
[46:34] They have historically been late to the party on some big things. So it wasn’t that long ago that Warren Buffett swore against investing in tech companies. And yet in this meeting, he’s lauding that Apple is a better company than Berkshire Hathaway it when you look at the profit margins and that’s why they’re investing so much money in it now. But he was late to the party on tech stuff, so he’s obviously gonna be late to the party on this, it’s just amazing the level of like vindictive tone about it. The other maybe best quote that Munger said was, I think the whole damn development is disgusting and contrary to the interests of civilization.
Taylor:
[47:11] So I was going to quote that if you didn’t, I wrote that down too.
Becca:
[47:14] That’s a great quote. I’m going to put it on a tank top.
Jewels:
[47:20] Contrary to the interests of civilization.
Becca:
[47:25] Look, here’s the thing, frankly, I’m going to blame Becky quick. The… I think that was her name? The woman who said the questions out loud, what I would never ask my, if I had a 97 year old grandfather, I would never ask him in front of a camera what you thought about cryptocurrency, and we should not have asked these old men that question.
Taylor:
[47:48] Wasn’t it the shareholders asking those questions? Oh, no, the question was, do you still consider crypto worthless golds?
Becca:
[47:50] Yeah, it was the shareholders.
Maggie:
[47:51] But she chose the questions.
Becca:
[47:58] I just mean like, I just mean, we wouldn’t expect other 90, some odd year olds to answer this question in a reasonable way. And I mean, I’m saying I accept that these men are taking themselves as authority and finance, so their responsibility is to talk about all things finance. So I think they should be held accountable. But I also think it was a very intentional, like we already know y’all’s feelings. We’re going to make you say it just so that maybe someone under 57 will listen to this. So I feel like it was kind of a bait.
Taylor:
[48:30] I loved it though. I was like yeah, tell me how you really feel. Yeah, it was great.
Becca:
[48:31] I know it’s what we wanted and they gave it to us and how many times, I mean, I guess only twice, but Charlie Munger – anytime we talked about anything that young people, like he would say, well, that’s just putting a red flag in front of a bull, and you’re like, yeah, we know you hate young people, Charlie.
Taylor:
[48:45] What? Mhm.
Maggie:
[48:46] Oh, yeah, he did say that. Just waving the red flag again.
Taylor:
[48:48] Oh my god.
Jewels:
[48:51] On the other podcast that Becca had mentioned it was interesting the perspective of the father about the cryptocurrency thing there because he’s no, I don’t think super pro cryptocurrency from an investment standpoint.
Maggie:
[49:09] If he is worshiping Buffett and Munger then he probably hates crypto.
Jewels:
[49:13] Right? However, his general tone, I haven’t listened to any other episodes except for the ones around this where he is hysterical.
Becca:
[49:21] He’s not normally hysterical.
Jewels:
[49:22] He’s hysterical, he’s gleeful and it definitely has like an ‘I’ve listened to too much talk radio’ vibe.
Becca:
[49:33] And like weirdly actively angry at his daughter for existing.
Jewels:
[49:36] Yes, yes, like just cutting her off, shutting her down. Like I will not tolerate this descent because you’re wrong and I’m right, that was the tone in the entire thing. It was so frustrating.
Taylor:
[49:38] And that’s the tone that people that follow Munger and Buffett have. They want you to hold them up is like, see I’m right. Charlie Munger and Warren Buffett said I’m right, so I’m right. Socialism is bad, fuck all of you young kids.
Jewels:
[49:53] Okay. So he was pro cryptocurrency in one regard which really gave me the like pPepper move my money overseas talk radio vibe. Which was basically mentioning that the primary utility that they missed out on about cryptocurrency is the ability to move it over international borders without being tracked.
Becca:
[50:20] Mhm.
Jewels:
[50:21] And like I said before, that’s not true. Yes it is way easier to move over international borders than hard cash or other assets currently. But it is definitely trackable. It may not be recoverable but it’s not untraceable. It’s like even this guy doesn’t have it right? And then my thought with the contrary to the interests of civilization, was that a major selling point of cryptocurrency, is it possible to have a currency with fixed rules that govern the supply and the increase in that supply over the duration? So you can make the future value of the cryptocurrency a lot more predictable than deflationary currencies like the US dollar which are manipulated by people. And the rules about how much supply we have can change at any given moment based on the people in control. So cryptocurrency can be launched with fixed rules. So you know what you’re getting when you buy it, which we don’t know what we’re getting when we buy the US dollar, which I think would be in favor of the interests of civilization unless they subscribe to the belief that the government and the rich people know better than everyone else and should be in control, which seems to be the case.
Becca:
[51:25] So kind of on that, but like a little bit different, but it brought it back to crypto for me when they were talking later on about, ‘hey, can this company keep going when you all die? was essentially the question. And they were like, here’s the thing, guys we’re decentralized and that’s why we’re so successful. And I know, and I was like, oh my God, guy, like they don’t even hear it, they don’t even hear it.
Jewels:
[51:51] I didn’t even hear that. I mean I heard that, but I did not queue up on it like that. You’re brilliant, you’re so brilliant.
Becca:
[51:52] Yeah, they were just like, we have so many subsidiaries were decentralized, we have a culture, so it’s going to be fun. And they say this like, this is two questions post crypto question in between those lying the Robin Hood questions, which is also very sexy.
Jewels:
[52:13] Yeah. Oh, the retail investors.
Becca:
[52:16] Um, but yeah, so they understand the benefits of decentralization for the like sustainability and continuation of a large moving organism anyway.
Taylor:
[52:29] And that’s what’s interesting too though is that Munger doesn’t like the government. He made many comments about how he doesn’t and even Buffett made some comments about his money, he’d rather his money go to philanthropy than the government. And so they don’t seem to have too much faith in the government, but they do have a lot of faith in random savant philanthropists that are going to save us all, which is the vibe that I got.
Jewels:
[52:55] We made all this money so that we can divert it to philanthropic organizations, who can redistribute it the way it should actually be spent, because y’all can’t be trusted.
Taylor:
[52:58] Yeah, no, that is exactly what they said, like, yeah Buffett said he would prefer his money, 99% of his wealth is going to go to either the government or philanthropy and he said he would prefer to go to philanthropy because he would trust individual smart people with it more than the government just to pay off the debt. Like he acted like they were going to use that money to be like let’s cut in through our debt, that’s 100 billion off our debt. Like he literally said that – he was like oh they’ll just take it off the debt. I’m like what? No one’s taking money off the debt like that’s not real.
Jewels:
[53:39] He wrapped up that whole little rant by saying, well, it’s basically in the voting population’s hands where they want my money to go to based on who you elect.
Taylor:
[53:48] No it’s not.
Jewels:
[53:49] As if our votes change the tax policy of this country.
Taylor:
[53:54] Yeah exactly exactly. So I thought that was funny. I was just like, I don’t think you really understand just how everything works. Like I know you probably understand a lot more than I do about how those systems work but like not enough to be able to say these things because I don’t think they’re true.
Jewels:
[53:59] Honestly, I think they live in such a different level of the system that they don’t understand how the system works for the average population.
Taylor:
[54:17] It just blew my mind that, that you’re right. But it also just blew my mind that he thought that his $100 billion would go to paying off the US debt. Why do you think that?
Jewels:
[54:34] Yeah. And not straight into pork projects for certain politicians so they can stay elected. That’s a lot of money to pass to your friends.
Taylor:
[54:41] I was like, have we ever paid off this debt? Is there any kind of like plan to pay off the debt? I don’t I thought that the debt was fake.
Jewels:
[54:51] The holding costs on our national debt are like nothing right now because we are forcing inflation at massive amounts so there’s no incentive to pay it off.
Taylor:
[54:58] Right, forcing inflation at mass and guess what if anything we’re putting that towards the military so they can keep nuclear weapons so that we never have to pay off the debt.
Becca:
[55:12] Sorry I just had to look up who his wife was. So he was married for 50 years to a woman named Susan. And for the last 15 after she passed he’s been married to ask a woman named Astrid which is a really dope name for an old woman. I just thought, this is the first line of the description of Astrid, his wife. Astrid Menks is a Latvian American philanthropist and former cocktail waitress who is married to millionaire business magnet. Warren Buffett. That is the most bull sit thing I’ve ever heard in my life. Why would the describe her as a former cocktail waitress?
That is not a description of… that is some sexist bullshit.
Jewels:
[55:50] It is super sexist, bullshit.
Becca:
[55:52] Would you ever describe a man as like, ‘former bar back’?
Jewels:
[55:55] Right.
Becca:
[55:57] Okay. How many years ago are we talking? And how does that mean anything? Anyway, so it’s not… off topic. I just had, yeah she’s beautiful.
Jewels:
[56:02] It is not off. That is on topic.
Becca:
[56:06] She’s gorgeous. She’s 75 and she’s really beautiful.
Taylor:
[56:11] He’s got himself a young one.
Becca:
[56:12] Yeah but like I mean I get it. He’s gorgeous.
Taylor:
[56:16] What’s her name, Astrid?
Becca:
[56:17] Astrid Menks. M. E. N. K. S married two years after Susan died.
Maggie:
[56:22] Apparently Warren Buffett had an open marriage to his first wife.
Becca:
[56:25] What? That’s fucking cool.
Jewels:
[56:26] I was going to say two years? Sounds like she was already a side piece.
Maggie:
[56:31] I think she was.
Becca:
[56:32] Wow. So his first wife was an activist for civil rights, abortion, birth control.
Taylor:
[56:38] Oh shit. I just hope that this open marriage was.. she knew about it and that she was also participating.
Becca:
[56:44] I bet she insisted upon it, would be my guess.
Maggie:
[56:44] Yeah, so Warren’s first wife left him to pursue a career in singing, but they remain emically married and she gave him permission to date other women.
Becca:
[56:56] Oh that’s so cool.
Maggie:
[56:58] She also introduced him to Astrid.
Taylor:
[57:01] Astrid’s really cute.
Maggie:
[57:04] They even send out Christmas cards together sometimes.
Becca:
[57:06] Okay this is all very sweet. I’m like getting a lot of respect from all of the sudden for the women. So one thing that Taylor picked up that I totally missed, did y’all hear Warren say that he voted for Biden during the meeting?
Maggie:
[57:17] Yeah, yeah, I did hear that.
Becca:
[57:21] I totally missed that. That’s not what I would have guessed but I was wrong.
Maggie:
[57:26] I would have guessed that.
Becca:
[57:27] Yeah. Well I should have guessed, he donated a lot to Obama and Clinton. I didn’t know.
Maggie:
[57:31] Yeah, I doubt Munger did.
Taylor:
[57:34] Yeah, he definitely gave me more Trump vibes.
Becca:
[57:34] Well so he is not, he’s a Republican. He’s well known for being Republican but he’s also known for not really liking Donald Trump. So I don’t know if you voted for him or anything.
Maggie:
[57:45] But yeah, I think it was one of the questions, I think it was like a political question and that’s when Buffett was saying something that I actually like appreciated that he said was, but he was being, he was like calling out some of the questions by saying like you’re asking me lot about my personal beliefs and feelings, but I’m here representing Berkshire Hathaway. And so these questions are entirely relevant to this scenario.
He’s like, I’ll answer the questions, I voted for Biden but that’s not relevant to this discussion.
Becca:
[58:21] Charlie, what do you want to say? Well you’re waving a red flag in front of a bull.
Maggie:
[58:23] Red flag in front of a bull.
Becca:
[58:29] Yeah. Um, should we tap into the Robin Hood question and how they feel about people being able to invest in partial stocks and investing with a small amount of money up front? They love it.
Maggie:
[58:42] Yeah. They think it’s great for society morally.
Becca:
[58:45] They think it’s great.
Taylor:
[58:47] Civilization at its pinnacle.
Jewels:
[58:49] Do we have a direct quote?
Taylor:
[58:52] Munger. Um, I didn’t do a direct quote, but I just wrote deeply wrong civilized men don’t want to make our money encouraging people to do things that are bad for people.
Becca:
[59:01] That’s pretty much it. He said he thinks Robin Hood and similar apps are god awful, deeply wrong. We don’t want to sell things that are bad for people. And then they went into saying that the States are just the mafia.
Maggie:
[59:22] Basically saying that those are equally as bad as state lotteries, which is equally as bad as the mafia.
Taylor:
[59:27] Which is equally as bad as state governments apparently.
Jewels:
[59:33] That literally, the state lottery, state governments are worse than the mafia because they took it over from the mafia and said, nope, this is our job.
Taylor:
[59:34] Yeah, we’re not, if this sounds crazy to you we didn’t, we’re not making this up. That is literally what Charlie Munger said and Warren Buffett.
Becca:
[59:48] He said that the states are worse for running lotteries because they tax hope, which actually I thought about.
Maggie:
[59:55] I disagree with that. I just think that relating that to Robin Hood in public and all those other apps is sort of out of touch again a little bit.
Taylor:
[59:55] Like Robin Hood doesn’t, it literally doesn’t just rob people. Robin Hood Rob. It is providing a platform, an accessible platform to the stock market, which is a legal thing to do.
Jewels:
[1:00:11] Yeah.
Becca:
[1:00:15] Well, and they say that, they’re like ‘there’s nothing illegal about buying options and making 30 trades a day. We just don’t think you could build a society on it’, which was not the question.
Taylor:
[1:00:24] They literally built an entire company on it. Like what are you talking about?
Becca:
[1:00:34] Yeah. All they do is make gambles on what companies are gonna pay out.
Taylor:
[1:00:39] They yeah, they literally said…
Jewels:
[1:00:40] Is that when he diverted into talking about Rome or something? Back on those major civilizations.
Becca:
[1:00:43] No. I think Rome might have been a little later.
Taylor:
[1:00:44] No, they then talked about inflation after that.
Becca:
[1:00:52] No. Whenever they talk about decentralizing their management is whenever he started talking about Roman Empire.
Taylor:
[1:00:58] These people sound insane. Like if you take it out of like… if you just had like a chart of the different topics discussed.
Maggie:
[1:01:08] I was telling Julie or somebody maybe it was Phil, I was telling somebody this the other day. I was like when I was listening to it, I was just sort of sitting here quietly listening to it. And then as soon as it was over I was like wait, they said a bunch of crazy ass shit in that and then I had to really think about it and I was like that thing was it? That was insane. I feel like that was so crazy, I feel fucking crazy.
Taylor:
[1:01:27] That was crazy. But that’s what I was telling Becca earlier in the kitchen, I was like, but they say it in a way, like it’s not crazy, which makes me feel crazy.
Jewels:
[1:01:36] The delivery is so boring that they literally could have talked about being abducted by aliens and their followers would be like yes, yes, yes, totally, man.
Taylor:
[1:01:38] Yeah. It’s just like when the aliens took over back in the 1700 and disguised themselves as lizard people, you know, like it was just, they were saying this batshit crazy shit without any facts to back it up and then just said it like it was fact and everyone just like agreed with them. I’m like, is this what it’s like to be an old white man. It must be amazing.
Jewels:
[1:02:04] Must be nice.
Maggie:
[1:02:04] You know what – they said it all without a bathroom break.
Taylor:
[1:02:08] They did. Yeah. They’re real heroes. Real heroes. Yeah.
Becca:
[1:02:08] Which is truly, truly amazing, and that’s why I trust them with my money. Yeah, they’re not pissing on my dime and that’s what I care about.
Jewels:
[1:02:15] Because they didn’t even have to pee for four hours.
Taylor:
[1:02:20] Oh my God. But yeah, back to the Robin Hood thing. Um, they were very clearly against these types of platforms and thought they were morally wrong for allowing stupid people to invest their money essentially and have access to the stock market, which is again, highlights how they, like their viewpoint is like, listen, most people don’t know anything about investing, they can’t be trusted to learn anything about investing and they’re going to make mistakes and they’re just going to gamble all their money away. So we know better. We know what’s best for them. We know that it’s immoral to allow them to gamble with the little shreds of dollar bills stuffed in their pockets that they have. So like, we need to, as the rich, smart people, you know, show them the way that they shouldn’t even bother trying because they just don’t know what they’re doing and they’re going to lose all their money and we really just don’t want you to do that. So maybe if you want to buy, like, I don’t know one of our, one, 100th of one of our stocks, we might get somewhere. But um yeah, good luck. This is my impression of Charlie Munger opening his Diet Coke.
Jewels:
[1:03:28] Classic. On the topic of we don’t want to sell products that are bad for people and morality.
Taylor:
[1:03:35] They own how many shares of Coca Cola? 7% I think of the business.
Jewels:
[1:03:42] Well there’s that, there’s that.
Becca:
[1:03:46] There’s no scientific evidence that Coke is bad for you, OK? They make a lot of profit. Yeah.
Jewels:
[1:03:49] Yeah.
Taylor:
[1:03:52] Sugar? I mean like that article you sent me about Coca Cola and Oatley? It’s not that bad for you. It like helps you lose weight.
Jewels:
[1:03:56] I mean, Charlie Munger’s 97 so obviously it works.
Taylor:
[1:04:02] It obviously works.
Jewels:
[1:04:04] I actually was going to take a deep dive into oil. Are we ready for this?
Becca:
[1:04:09] Mm. Take us there, baby. Mhm.
Taylor:
[1:04:10] I don’t know if I want to, I don’t know if I want a deep dive into oil.
Jewels:
[1:04:12] Well then you might not want to invest in Berkshire.
Taylor:
[1:04:16] Unless I have some dawn on me to rinse it all off.
Jewels:
[1:04:21] Yes. Like a cute duck.
Becca:
[1:04:22] Like a baby duck.
Jewels:
[1:04:24] Okay, so I do need to state I’m in no way making a statement on whether or not we should be reliant on oil to the extent that we are and we’re also not diving into imminent domain.
Taylor:
[1:04:33] You sound like Warren Buffett.
Jewels:
[1:04:36] I would actually, I would love to have an episode where we dive into these types of topics but this is not a long enough episode for this. I’m just saying I’m not making a statement on whether or not oil as an industry is good or bad or on whether or not pipelines should run through the modern lands of indigenous people. There’s a much deeper discussion, but while we’re talking morality, as long as oil as part of our energy equation, the environmental and human costs of transporting oil on railroads is way higher than pipelines. But one of Berkshire’s biggest holdings is BNSF, which is a rail line that he has made insanely profitable since 2009 when Buffett bought it primarily by transporting crude oil and coal. And here’s the deal. When you put crude oil on a train, your hazardous spill risk is 33 times higher than in a pipeline.
Taylor:
[1:05:32] Give it to me Julie. Yes, yes, yes.
Jewels:
[1:05:33] That is 33 times worse for the environment. It also spits out twice as much pollution as a pipeline. Also kind of bad for the environment and it kills a lot of fucking people when the trains crash with that on it. This isn’t like an ancient thing where train crashes and people died. This is like in Quebec in the last 10 years and that’s not the only… there’s a whole Wikipedia page about train collisions. Okay, so my real point to that being that like if we’re going to talk about morality and caring about people and not selling things that are bad for people, then why is 25% of the earnings before taxes of your company coming from a railroad? That literally is the worst environmental and social choice compared to the alternative in the same industry. I’m not even saying that industry needs to go away. I’m just saying you are literally using the worst choice in that same industry for profits.
Taylor:
[1:06:29] What if the people driving the train are also eating Dairy Queen while driving the train?
Jewels:
[1:06:34] I bet it was See’s Candies. I think they’ve got a peanut brittle stash.
Becca:
[1:06:37] Just over the intercom crunch crunch crunching.
Maggie:
[1:06:39] They can only eat Dairy Queen and drink Coca Cola and eat See’s Candies while driving a train.
Jewels:
[1:07:09] Yeah, maybe I want underwear with that picture on it. That comic. Yeah.
Taylor:
[1:07:14] I think we should make this, I think we should make this morality.
Becca:
[1:07:15] I’d be very into that.
Jewels:
[1:07:17] Morality.
Becca:
[1:07:20] This is true morality. So that’s the thing though.
Taylor:
[1:07:21] But then they’re like running over like a casino chip and a pack of smokes.
Jewels:
[1:07:22] Civilized.
Becca:
[1:07:27] They seem to claim to know a lot about a lot, and they and I mean they make these jokes right? Like, ‘no we don’t know much about much’ you know but they like understand that they are the puppet masters of just millions of people who follow their every word and take it as true gospel. But what they claimed pure… like absolute who could fucking no naivety is environmentalism and impact on environment and global warming, climate change. They’re like, we don’t, what are you kidding me? We’re not scientists. No one’s a scientist. No one could know these things. No one. And so I think that ties into their whole conversation about ESGs and about the forms that they choose not to fill out so that they qualify for ESG ETFS. Which was an interesting question I thought at the, towards the beginning of the meeting. But also, I don’t know, I like respected their response. I think it was a fine response that they think ESGs are a useless form for them to fill out. For whatever fucking reason, they don’t want their Dairy Queen general managers to have to fill out environmental related forms.
Jewels:
[1:08:42] They don’t want their coal plant companies to have to fill out environmental forms.
Maggie:
[1:08:48] They don’t want their crude oil toting railways.
Taylor:
[1:08:51] They don’t want the children gathering the diamonds from the mines to have to stop what they’re doing.
Jewels:
[1:08:52] I actually agreed with you on the front that like, from a rational perspective of a parent company that is being asked to make rules that apply to all of their sub companies, even though some of those companies, like a coal plant is never going to be trying to get into an environmentally friendly ETF, it’s weird for the parent company to be like, no, everyone has to do this. So I get from their perspective that they’re decentralized and they try not to do a lot of top down management and that it’s unnecessary paperwork for some companies who are actually just sort of being phased out. Also on the environmental front, Berkshire Hathaway I guess does have their own environmental targets based on the Paris Accord that they’ve been hitting and are continuing to hit. So for them to reroute to these other standards, sort of like splits their effort away from the actual goal.That’s fine. I understand all of that. I did find it interesting though that he was like, those aren’t the investors we want. The types of people who invest in ETFs aren’t the long term investors like we attract at Berkshire Hathaway. But to that I kind of want to call bullshit.
Taylor:
[1:10:11] I have a lot of ETFs that I plan on holding on to.
Jewels:
[1:10:21] Because if, well specifically the ESG and the SRIs, like the environmentally and socially focused ETFs. These are the things that investors in our sort of age group are looking at because they want to be long term index fund investors, but they want to filter out companies that don’t fit their own environmental or social morals. So they’re actually planning to buy these types of ETFs for long term buy and hold. These aren’t the types of ETFs people jump in and out of in day trade on.
Jewels:
[1:10:49] No, it’s not. Yeah. That show me show me an E S G R S R I E F T. So many letters. That is a meme stock. Show me one.
Becca:
[1:10:56] Mhm, Because I will invest in it.
Jewels:
[1:11:00] Yes, I will be there tomorrow. We need to make one. Yeah. But so like, on the one hand, I understood that he’s like, these are the types of investors we’re looking for, but I don’t think he understands who the types of investors are that are looking for those products.
Taylor:
[1:11:18] No, they just they don’t understand those investors period.
Jewels:
[1:11:21] Yes. So I got the rational thing. I also think he was wrong in some of his rational about it.
Becca:
[1:11:26] Well, it wasn’t rational, It was exactly what you said. I don’t agree with myself, I agree with you. That this wasn’t, it was a rational argument, but it was only because he evaded entirely the portions of his company that certainly should require environmental standards, and they talked it through, but like we don’t want a Dairy Queen manager filling this out. What about those Pampered Chef ladies going at each other?
Jewels:
[1:11:57] I mean, Pampered Chef probably could have helped their diversity and inclusion numbers, which was the other shareholder proposal.
Taylor:
[1:12:04] What does Pampered Chef sell again?
Becca:
[1:12:06] Just like kitchen gadgets.
Maggie:
[1:12:07] Kitchen stuff. Apparently now they’re opening up to gardening things as well.
Becca:
[1:12:14] It’s true.
Jewels:
[1:12:15] Grow the food, cut the food. They have like, you know, single use tools for the kitchen. So you have to have one for everything.
Becca:
[1:12:21] Strawberry corer.
Maggie:
[1:12:23] One of those tupperware things that only holds a half of an avocado.
Taylor:
[1:12:31] I need that.
Becca:
[1:12:36] But no, I think you’re right. I think that it was in a very evasive response, which of course, like what else are they going to say? Like, hey, we want money, not environmental regulation, whatever. And Greg Able went into like, look, here’s how we’re adhering to the Paris Agreement, here’s how we’re going above and beyond in the Paris Agreement, which I think was a reasonable response. Now, if you listen to that crazy podcast that I listen to holy shit, that man lost his mind. Social justice warriors, he said 17 times. Socialist young people they said 17 times, which Charlie Munger bless his heart, he can’t keep saying the phrase liberal young people when responding to young, just anything about young people. They’re all liberal young people.
Becca:
[1:13:18] Yeah, I wish, I wish you were right.
Jewels:
[1:13:25] So I didn’t have an issue with the way that he countered some of those things in the more rational sense of like, okay, it’s not a fit for my whole organization. They should be able to pick that themselves, like whatever if you’re going to make those arguments, but then don’t throw morality in my face on every other topic.
Maggie:
[1:13:40] Yeah, again bringing it back to the morality thing, it just really pissed me off and how many different ways they did that was so hypocritical.
Jewels:
[1:13:44] Yeah, it was insane. Yeah, it was awful.
Taylor:
[1:13:50] Yeah, it seemed unnecessary to like, I mean I know there’s a couple questions where people are like just tell us why you invest in shit, and Buffet was like no, it’s like our whole thing. But yeah, it seems like it was weird, there was a lot, there was a very heavy tone of morality when discussing like pretty much every topic which I thought was weird, interesting. Oh I’m starting to remember what I was going to, what I was thinking. So one of the questions this guy, when he was talking about the coal, like in the environmental question clearly phrased it like he wanted, he thought that he was like the smart man that was like fucking idiot young kids investing. Do you remember what I’m talking about? This guy was like clearly
Jewels:
[1:14:31] That long question, but it was it was worded in beautiful rhetoric.
Taylor:
[1:14:40] That long question, right? Like he, it was very clear what he wanted the answer to be. You know, like he expected Charlie and Buffet to agree with him the way that he phrased it.
Maggie:
[1:14:46] Do we have a the question?
Taylor:
[1:14:49] I wrote it down, yeah, I wrote it down somewhere. I can’t find it, but like it was basically, yeah, it was like, so what do you think about, you know, all of this, all of these young people, you know, trying to discredit coal and blah blah blah. It was like, basically to that extent. But I did think it was interesting because the way that I interpreted their response seemed almost like they kind of didn’t fully agree with him because they were like, yeah, we know coal’s getting phased out, like we’re basically trying to position our company in a way where we still have some investment in it, but where it’s becoming less and less and we’re looking at renewable energy sources and like different energy options essentially is what he said. But the way that the guy worded it, you could tell he wanted them to be like, yeah, fucking coal here to stay. You know, like it was such a clear, what is it? Baited question. Exactly. Yes, exactly.
Becca:
[1:15:40] Yeah, exactly.
Taylor:
[1:15:45] One of my favorite Munger quotes that I wrote down when he was talking about communism at some point, he said, I don’t care if the cat is black or white as long as it catches mice.
Becca:
[1:15:52] Yeah.
Taylor:
[1:15:55] I was like, what?
Becca:
[1:15:57] I actually kind of dug that, but that’s when he’s just, yeah, talking about Chinese communism. Mhm. I was like, what?
Taylor:
[1:16:01] It’s like what? Because that, I was like, what does that mean when it comes to communism? Like you don’t care if it’s communism or not communism as long as capitalism reigns.
Becca:
[1:16:07] Exactly, that was exactly what he was saying.
Taylor:
[1:16:15] Yeah.
Maggie:
[1:16:19] Yeah, that seems to be right.
Taylor:
[1:16:23] Oh man, that man is funny.
Maggie:
[1:16:24] I also thought of a quote that I wanted, that we haven’t talked about yet, but I did laugh at the Elon Musk stuff.
Taylor:
[1:16:30] Oh my God, that was crazy that someone straight up asked, what do you think about Elon Musk.
Becca:
[1:16:33] Yeah, that was funny. Yeah. And like, hey, would you, would you insure, would you insure his rocket to mars and Warren Buffett was like, well, if he’s on it, I would talk about it.
Maggie:
[1:16:42] With your insurance. Yeah, and Buffet was like, how much, I mean how much money you give me, give me a lot of money then? Sure.
Becca:
[1:16:53] Yeah, it depends what the premium is.
Maggie:
[1:16:54] And yeah, and Munger was like, no.
Becca:
[1:16:59] And what did Ajeeb, Ajeeb said something like I would not take that. I would not take advantage of that situation or something.
Maggie:
[1:16:59] Yeah. Oh I remember the other one that I wanted to mention was when somebody asked um, if Buffets main thing is long term holding like index funds, then how can you convince your stockholders that owning your stock over that is a good idea? And Munger was basically like I believe our stocks better than the market. And Buffet was like I’ve never once recommended that and I was like, oh I really enjoyed hearing them disagree on that point.
Taylor:
[1:17:30] Yeah. I really enjoyed hearing them disagree.
I thought it was his response was very interesting because again he gave like an 18 minute long answer that was kind of convoluted but it was basically like watered down.
It was like well I don’t really recommend it unless you’re just someone that fangirls over us. Like he basically said our shareholders are very specific people that invest in our company because they believe in us as a company.
Uh Normally though I would just say invest in the S. And P. 500 because nothing will beat that.
But if you know if you just really like us then you should invest in our company. And I was like isn’t that how like all investing in companies works like people just really like the company and believe in it so they invest in it.
But yet you’re telling people not to do that unless it’s your company they’re investing in.
Becca:
[1:18:19] Yeah. Because they do say over and over again in this interview, and many, many others of like, you don’t anticipate that you’re smart enough to be able to pick your stocks. Just go with the index funds. But our stock is better than the index funds if anyone’s asking.
Maggie:
[1:18:35] I feel like Buffett didn’t really say that to buy their stock but Munger, definite Munger definitely did. Yeah.
Becca:
[1:18:39] No, I don’t think so. Yeah, I think Warren Buffett is really hard on, I mean, he is very clear about believing in the index funds.
Taylor:
[1:18:47] Mhm. Well, yeah, and you know, he literally just said people buy their stock because they like them because their shareholders are essentially like rich millionaires that believe in Berkshire Hathaway.
Maggie:
[1:18:48] I don’t get their friendship. It seems like they like banter with each other and that seems fun but they like, I don’t see how they get along so well.
Becca:
[1:19:06] It seems like Charlie would truly hate Warren
Jewels:
[1:19:09] So I think the relationship, based on some of the other quotes I’ve heard about things Munger has said about Buffet over the years is that Charlie sees Warren as someone who can learn things exceptionally quickly. I think Charlie Munger sees warren Buffett as someone that he has shaped over the years, so the distance between them has grown smaller, because Munger has been able to sort of shape and manipulate Buffet throughout their relationship. So it’s not that they are far apart from each other, it’s that they’re less and less, far apart from each other, even though they will never converge.
Taylor:
[1:19:46] Right. I also just think they acknowledge they’re both smart people and respect each other, even if they have different opinions on things. But one of the actually, one of the quotes from the pre-show, someone did quote Buffet saying Charlie Munger made me a better person. So that is something Buffett apparently has said about Charlie Munger.
Becca:
[1:20:06] Yeah, I mean it makes, I think it would make a lot of sense for a huge conglomerate to be successful because it has two heads that have very different views of the world.
Taylor:
[1:20:15] Mhm.
Becca:
[1:20:15] I think it seems like a pretty balanced situation.
Maggie:
[1:20:18] Well, very’s is a strong word, but yeah!
Taylor:
[1:20:18] Very. Yeah. Mhm.
Becca:
[1:20:20] Yeah, they vote for different people.
Taylor:
[1:20:23] It’s like if you have a white cat and a black cat, but they’re both cats.
Becca:
[1:20:27] But they both catch mice. Yeah, that’s true, fair point, fair point. I think that I find myself wanting to give these men allowances simply because I anticipated so much worse when I was sitting down to watch this.
Taylor:
[1:20:43] I also did.
Becca:
[1:20:44] Yeah. And as I watched, I was like, oh, like Charlie Munger is a grumpy old man, but he’s like your standard grumpy old man. And Warren Buffett seems like a pleasant little cherub. Um, and they both… and so I find myself wanting to like them. And then like of course, once you removed in like, you know, you reflect back on the absolute bananas things that they said that sitting in a waiting room, no one is thinking about how much their healthcare is going to cost in America. Uh, you know, yeah, you’re reminded that many rich people who hoard billions of dollars with their money out of circulation come across as normal average and kind people. But if we’re talking as they do, I’m not even saying we are talking about, I’m saying they’re talking about morality constantly, and that they seem to be the holders of it and they seem so like glaringly contradictory to what a reasonable person would call moral. It’s a trip.
Maggie:
[1:21:48] It is a trip, I think that is an excellent summary of how I feel about watching that interview.
Jewels:
[1:21:55] I sort of left with this reminder that one thing that’s proven true throughout history is that what is considered moral is constantly in evolution. So what is moral now is like a much tighter standard than 100 years ago, than 1000 years ago, than 5000 years ago. And these dudes are approaching 100 years old. So personal opinion, I just think their morals are getting out of date. They’re just not keeping up with the times.
Becca:
[1:22:20] Yeah. And also not bothering to keep up with the times for obvious reasons. If I was 97 years old, I’m not gonna learn what fucking blockchain is, but stop asking me about it in a public setting like that.
Jewels:
[1:22:31] I’m not going to be like, that’s disgusting.
Becca:
[1:22:35] Yeah, absolutely.
Jewels:
[1:22:38] This was… okay. This is another thing that I thought was a great reminder for my future self. Like I need to write myself a letter if I make it to a very advanced age, I say, remember even smart people can fall behind and reach this point where they don’t understand what’s going on, try to beat you.
Becca:
[1:22:51] Yeah. Oh, that’s a good little pep talk.
Maggie:
[1:23:00] I’m not 97, but I’m often times I don’t know what the word is… humbled about things even now, and I’ll be like, I’ll say something and someone will be like, oh that could be seen as offensive to this person, I’d be like, really, oh my God, I had no idea, like I just learned that and I will be careful moving forward, kind of thing. So I feel like, yeah, you don’t have to be 90 to kind of not know everything your reaction.
Jewels:
[1:23:27] Right. The difference was your reaction was was like, oh, thank you for letting me know. I’m going to reconcile that with my previous beliefs that I could, you know, say whatever. Um, whereas their reaction is, I don’t get it, That’s wrong. That is wrong for society.
Maggie:
[1:23:45] That’s wrong, the devil’s work.
Jewels:
[1:23:47] Yeah. So ridiculous. So should we talk about buybacks?
Taylor:
[1:23:52] I don’t really understand. Okay, so buybacks is when they sell a company and then they buy it back at a lower price?
Jewels:
[1:23:53] No, no, no. So it’s when they sell shares of their company, right? So let’s say…
Taylor:
[1:24:02] Oh and then they buy back those shares at a lower price?
Jewels:
[1:24:07] Yes. So there are lest… Lest? Why can I not talk? Lest it be known! Okay. So if they had, this is obviously an arbitrary number. But if there were 1000 stocks out in the market and they started making a ton of money and they decided to buy 900 of those stocks back, there’s only 100 stocks in circulation. Suddenly those 100 stocks represent the entire value of their company, and those 100 stocks are way more valuable than they were when those 900 others were in circulation. So it intensifies the value of the stocks that are in circulation. Did that make sense? Yeah. So that’s what a buyback is. And what’s so interesting is that there has been a lot of discussion I think, particularly in the last year about how immoral these stock buybacks are, because, I can’t remember if it was like the airline industry or something like that.
Maggie:
[1:25:02] The first time I remember really getting wind was the airlines.
Jewels:
[1:25:06] Right? And you can correct me, Maggie if I’m wrong about this. But essentially what happened is the airline companies, they were like accepting government bailout money, and buying back stocks in their company that then increased the value of the stocks they themselves held so that they could cash out.
Maggie:
[1:25:16] Yes. And the other argument about why it was bad is because they were, rather than having like an emergency fund or like money in order to prepare for something like this or you know, giving dividends or you know, whatever using your money in order to better your company. Instead of doing any of those things, they were shuffling tons of money into stock buybacks rather than any of those other things that could have also benefited the company or benefited the company a different way. Maybe a way that would have prevented a government bailout to begin with.
Jewels:
[1:25:57] Right. That’s what it was. Yes, I think I had my order wrong. But yes, it was that in the years leading up to these crises that the airline industries have had, they were doing the stock buybacks instead of putting some emergency fund aside for the crises that routinely happened.
Even if it’s not the scale of covid, there have been massive hits to the airline industry every decade, You know, so they should know better than to be running cashless. But because they are considered critical infrastructure, they know the government will bail them out. So instead of covering their own ass in advance of these crises, they decided to sort of cash out by doing the stock buybacks that intensified the amount of the company they own themselves.
Taylor:
[1:26:42] I didn’t really fully understand that because they were talking about how certain companies gave back the money because they knew they would look bad and like how is Berkshire Hathaway, they look bad if they accept money from the government because everyone sees that they’re worth billions. I didn’t really fully understand what they were talking about there. So they they didn’t take government money because of that or they did.
Maggie:
[1:27:03] Well, I think that I can’t… you have to elaborate more on what their points were, but basically they were saying that buybacks can be moral in some situations, but not all situations.
Jewels:
[1:27:15] Right. So I think this is two different topics. And so yes, what they were saying is that buybacks are moral in some situations and immoral in others. So in the case of the airline industry, they’re saying flat out this was immoral, even though for the shareholders who had stocks, it had the exact same effect as Berkshire’s buybacks, which is anybody who is a long term investor in that it intensified the value of their individual stocks. So like the actual quotes from Munger were that if you’re repurchasing stock, just two bullet higher, it’s deeply immoral. But if you’re repurchasing stock, because it’s a fair thing to do in the interest of existing shareholders, it’s a highly moral act. And the people that are criticizing it are bonkers.
Maggie:
[1:28:06] What are the differences between those two actions?
Jewels:
[1:28:09] It’s only your intention.
Taylor:
[1:28:11] Your intention. That is literally the only difference.
Jewels:
[1:28:13] Yeah. The outcome is literally the same either way, in his own words, if you’re buying back the stocks it’s going to bullet higher.
Jewels:
[1:28:21] But if you are doing it out of the good of your heart for your shareholders, then its moral, but those other people….
Jewels:
[1:28:29] Yes. So…
Taylor:
[1:28:36] You’re here to be famous and rich. We all know it.
Becca:
[1:28:40] Get a new house bro.
Jewels:
[1:28:43] Yeah. And so I’m just just to put this in context with real numbers of the effect that these buybacks had on Berkshire’s value.
Taylor:
[1:28:45] Get into a new house bro.
Jewels:
[1:28:58] They did $6.6 billion dollars worth in buybacks and that drove their shares up more than 18% in 2021 to a record high, which I think would be the definition of bulling it up.
Maggie:
[1:29:19] So when they say that their socks are better than the market, what they’re saying is we made our stocks better than the market guys, just buy them, buy them.
Jewels:
[1:29:37] Yes. But they did it morally. Yes. Yes.
Taylor:
[1:29:46] We’re here to fuck the US economy for the right reasons.
Jewels:
[1:29:49] Urgh, can’t even.
Taylor:
[1:29:52] Uh, man, okay, so, uh, Jewels wanted to move on to what was it called?
Jewels:
[1:29:59] The shareholder proposals that were voted down by what would seem to be a large margin during the actual shareholder meetings.
Maggie:
[1:30:07] He blew over that so quick too, it was like a two minute of a six hour meeting.
Jewels:
[1:30:08] Wait mm.
Becca:
[1:30:08] Yes, yeah, serve it to us Julie because that shit blew my mind.
Jewels:
[1:30:10] Okay. So the two proposals were, they were both related to disclosures that their companies, they’re all their sub companies would have to fill out and file this year so that investors could have that information about the individual companies. One was a climate change disclosure, which, these are both standard disclosures across like a lot of different industries where companies fill these out so that we can rank one company against another based on their environmental practices, in sort of a standardized fashion. So the first one was about climate change. The second one was about diversity and inclusion. And the numbers looked really stark. They basically came out essentially the same. And that was 25% of the shareholder votes were for adding these disclosures and 75% were against.
Taylor:
[1:31:05] Which tells you exactly who is investing in Berkshire Hathaway.
Becca:
[1:31:11] Or does it?
Jewels:
[1:31:13] Well, see that’s what I thought. But then I looked up how much voting power Warren Buffett has. And Warren Buffett has Almost 32% of the aggregate votes.
Taylor:
[1:31:29] Wow.
Maggie:
[1:31:30] And how much do we know how much Munger has?
Jewels:
[1:31:33] So no, I didn’t get I didn’t have enough time in my crazy, frantic research manic period before running over. I didn’t have enough time to look at the other board members to see who else are, like major stakeholders in this.
Taylor:
[1:31:33] I’m going to go ahead and guess that shareholders have 25% voting power?
Jewels:
[1:31:49] Well, I I think there’s probably a little bit more than that.
Taylor:
[1:31:53] Do they have to disclose what they voted?
Jewels:
[1:31:59] Okay. Yeah. So this is the other crazy thing. I pulled up the actual the actual ballot that the shareholders fill out. It’s got like proposal 1 and proposal 2 and above the voting section it says the board of directors recommends a vote against item 2 in bold. So right before you vote, it tells you what their votes going to be because they’re recommending you vote with them. So not only did the numbers look really blown out because the chairman of the board, Warren, Buffett is voting against it with almost 32% of the vote.
Taylor:
[1:32:30] No just chairman, God, Julie, God.
Jewels:
[1:32:37] But because he is seen as God, there are people who without even using their own brain to consider these things, there are some people who will just vote with him because they believe he is the all knowing power. So that blew my mind because if you take Buffett’s 31% out and just his, not even the other major controlling board members who may have a large voting state, But that brings the numbers down to 25% for vs 44% against, which is a lot closer than 75%. And we can bet that some of that 44% is the rest of the board, and some of that 44% aren’t voting based on actually looking at the um proposals that were set forth just voting in line with.
Becca:
[1:33:24] Wow, I’m trying to find out how much the other board members have, but I did find, this is a dated paper, but I just have to say how they phrased it, ‘Charlie Munger’s brood’ 8 children and dozens of grandchildren own more than 1% of the voting power of Berkshire Hathaway.
Taylor:
[1:33:40] Wow.
Becca:
[1:33:43] I just really love that they called it a brood.
Taylor:
[1:33:45] The brood. Yeah. I’m going to guess he has a good amount of voting power, interesting. So what does that actually shake out to? If would be your best guess in terms of like how much power the board has, like what kind of percentage do you think they have in terms of like voting power versus stakeholders?
Jewels:
[1:34:03] I don’t know, I’ll look it up and I’ll put the real breakdown in the show notes. But my gut feeling just on taking Buffet out is that the real result, if you’re looking at only the general shareholder population is that they’re probably pretty evenly split between being for and against these issues. Which is a much different picture than we saw in the actual meeting. Looking at a, you know, 1:3 sort of ratio.
Maggie:
[1:34:30] Well, and it was just crazy that they didn’t talk about it more, I mean they just fully blew over it.
Jewels:
[1:34:34] I mean, no. So before yes, before Buffett did it, he was like, so you should go check out the website where the people have set forth the proposals have stated their arguments and we’ve stated our arguments for our position.
Maggie:
[1:34:47] After talking for five straight hours non-stop.
Jewels:
[1:34:48] Yes, and I get it because…
Taylor:
[1:34:51] Elon Musk warranted a five minute fucking rant, but we can’t even talk about our actual proposals for our company.
Jewels:
[1:34:57] Okay. So I will say the one difference here being that this is the actual like government required meeting that you have to take minutes foreign file them. So it usually is something that runs pretty snippy, but this was excessively short to not even get into it. Um, but yeah, he was basically like, go check out the website and read both arguments. I think they’re both compelling, which I thought was actually like, I don’t know if he’s as against it. I think he’s against it from his like rational, I’m not going to make everyone do paperwork side of things.
Taylor:
[1:35:31] Right, It wasn’t like I think, I don’t care about, you know, diversity. It was just like from a business perspective, this doesn’t make sense.
Jewels:
[1:35:40] Right? But instead of stating that during this time he was just like, go read it on the website and okay, tell us the tally and we’re done, closed, meeting adjourned.
Maggie:
[1:35:49] Okay moving on, meeting adjourned. Talk to you later. Bye. And then the after meeting where people fucking suck their dick some more.
Jewels:
[1:35:51] Oh my God. Okay. So tell us about the person you didn’t like in the after game show, post-game, Whitney something.
Maggie:
[1:36:01] I’m pretty sure it was the same guy that you didn’t like.
Jewels:
[1:36:04] It was the main person who talked, was an old white guy.
Maggie:
[1:36:07] Yeah, I don’t remember his name. Some old white guy who was just like, so into how well the meeting went and had nothing but good things to say. And I think the quote that we had made fun of earlier in our recording was that you know it’s very impressive that two old men can just answer questions without having a bathroom break. It’s like how fucking out of touch are you?
Taylor:
[1:36:37] But you know what I’m glad for once people are commenting on men’s bodies and not just women.
Becca:
[1:36:41] And their bodily functions.
Maggie:
[1:36:44] Yeah.
Becca:
[1:36:47] Yeah. If there was a woman they’re like, did she have to change a tampon during the entire shareholder meeting?
Maggie:
[1:36:48] She didn’t change her tampon once during the entire meeting.
Becca:
[1:36:54] Yeah. That is wild.
Jewels:
[1:36:56] Except, what a woman! Well in his quote was actually even more sports like than that quote. We just saw a 90 year old man backed up by a 97 year old man go for four consecutive hours without even a bathroom break.
Becca:
[1:37:04] One man back man or? Right.
Maggie:
[1:37:08] It was just awful. Yeah.
Becca:
[1:37:12] Yeah. Like it’s the first time these two men have sat in a chair and talked about money for four hours. How did they do it? Have they had any practice at all?
Jewels:
[1:37:24] Yes. And so I pointed out that old men have more of a problem being able to pee then not peeing for four hours because as you age typically your prostate grows and starts blocking your urinary tract. So them not peeing for four hours is not some momentous occasion.
Becca:
[1:37:37] I like that Julie’s argument is that we shouldn’t be celebrating. We should be concerned.
Taylor:
[1:37:46] They’re wearing Fruit of the Loom. Everybody knows that.
Jewels:
[1:37:49] But don’t worry they won’t have to wait in the waiting room and worry about their finances when they go get their prostate shaved down later so they can pee.
Maggie:
[1:37:57] Prostate shaving oh, ouch, that sounds so painful.
Becca:
[1:38:04] Apparently Black Rock, like the big index fund, they own 8% of Berkshire Hathaway.
Taylor:
[1:38:11] I was literally just looking at a breakdown of the top 10 owners of Berkshire Hathaway, right.
Becca:
[1:38:13] Oh well they voted pro disclosure. They want, they were 8% of the 25% of voting for the disclosure for environmental and diversity issues.
Taylor:
[1:38:19] Eight. Interesting.
Jewels:
[1:38:26] I would have to assume that.
Taylor:
[1:38:27] Yeah. I wonder what Bill and Melinda Gates voted.
Becca:
[1:38:34] They did make a statement.
Jewels:
[1:38:41] Well, I would have to assume that that was a PR move because Black Rock, right? Black Rock has been ripped a new one the last few years. With good reason. Um, and if they already know that the majority stakeholder is going to vote against it and that a lot of people are going to vote with him, it’s probably a pretty safe PR move, even if they weren’t for it. In reality to get the PR boost from voting for it.
Taylor:
[1:39:03] Clearly, you just know all the moves before… anticipating the moves.
Maggie:
[1:39:05] You know that’s a quantum thing you just did right.
Jewels:
[1:39:06] It’s just like I know exactly the essence of everything before the statements even ended.
Taylor:
[1:39:18] That should be like, on a candle.
Taylor:
[1:39:30] So can you remind me what Black Rock, who they are again? I know we’ve talked about this before and I can’t remember.
Becca:
[1:39:41] They’re like Vanguard, they have the big index funds and so that would make them a….
Maggie:
[1:39:46] Investing platform.
Becca:
[1:38:34] Thank you.
Taylor:
[1:39:50] Okay, because the Vanguard group owns almost 10% of Berkshire Hathaway.
Jewels:
[1:39:56] Yes, so Black Rock and Vanguard are direct competitors. But Vanguard has great PR, and Black Rock has said some pretty bad PR the last few years, I think, largely related to the Keystone Pipeline, is that correct?
Taylor:
[1:40:07] I don’t know. Most were talking about key lime. I got nothing for you.
Maggie:
[1:40:15] National Investment Management Corporation, based in New York, initially a risk management and fixed-income institutional asset manager, world’s largest asset manager with 8.67 trillion in assets. Um, the knowings that I have of Black Rock are in that index fund podcast, ‘Let’s Know Things’ that we’ve mentioned before, and he talks a lot about Black Rocks power because of how much they own in index funds.
Jewels:
[1:40:45] Right. And actually it is interesting that they decided to vote instead of abstaining because part of what was brought up in ‘Let’s Know Things’
Becca:
[1:40:52] Yeah.
Jewels:
[1:40:53] Was that these massive index fund companies that we are purchasing index funds from our major shareholders who have voting ability and could change the shape of the market, to fit our like, environmental and social priorities. But oftentimes they just abstain from voting, even though they could be sort of directing the market and the way their investors want their ownership of those companies to go.
Maggie:
[1:41:19] Yeah, it’s probably been it’s probably been like a year since I listened to that episode, that podcast, but I thought what they were saying in that podcast is that Black Rock has been being pressured into making more, more of a stance. And so now we’re seeing it, it looks like.
Jewels:
[1:41:19] Right, Okay. So then maybe that 8% doesn’t have to come out of the 25% because maybe Black Rock had people vote on the proposal, who were invested in index funds that are then invested in Berkshire. So maybe that 8% actually represents the votes of the through voting from their actual investors, the general population.
Maggie:
[1:41:48] Yeah.
Jewels:
[1:41:57] So interesting.
Maggie:
[1:41:59] Yeah, that is interesting.
Jewels:
[1:42:01] So complicated.
Becca:
[1:42:06] Well and it’s funny because it is all politics. Like when you break it down you can really see all the lines like if you put on a wall and cover it with yarn it we would look crazy.
Taylor:
[1:42:18] Rome, cats.
Jewels:
[1:42:19] Rome cats.
Maggie:
[1:42:20] See’s Candy.
Taylor:
[1:42:25] Communism. See’s Candy. Trains full of crude oil.
Becca:
[1:42:29] Coca Cola, moral, good, question mark.
Taylor:
[1:42:32] Yeah, Yeah.
Maggie:
[1:42:34] Yeah, it’s just an Elon Musk photo.
Taylor:
[1:42:37] It is, it’s so interesting to me because it just, it’s a game. Like I know he said this before, but these are powerful men playing a fucking game. And it’s just, all bullshit right, gambling is immoral, but playing with, uh, the US economy’s money is uh, totally, totally fine.
Becca:
[1:43:08] Well and yeah, like us, your average Joe quote unquote gambling, aka investing his stimulus check is objectively wrong. He shouldn’t have such ready access to a platform that allows him to just willy nilly.
Maggie:
[1:43:28] Although Buffett did say that he was all for the stimulus checks.
Becca:
[1:43:32] He did. He was very profound.
Taylor:
[1:43:33] Throw the peasants a little bread.
Becca:
[1:43:36] Yeah. He he was he was pro the fed in general. He was like, they did a standout job. We could have really been bad.
Taylor:
[1:43:44] He also said though he knew that hundreds of thousands of people were watching this and he didn’t want to make people angry.
Jewels:
[1:43:50] No, but there’s no reason for him to not be in favor of the government taking tax money and giving it back to the general population to spend in the market. Either by purchasing products from the companies that he owns or by investing in the market driving up prices of companies that he owns. There is no reason for him to not be totally in favor of the money being redistributed in that fashion because it’s all coming back to him.
Taylor:
[1:44:19] Yeah. Today we tackled the Berkshire 2021 Berkshire Hathaway annual meeting, shit, stakeholder meeting.
Becca:
[1:44:28] He passes it to Charlie, Charlie holds it, he holds it. He tosses it.
Maggie:
[1:44:34] Oh he dropped the ball, Munger dropped the ball.
Jewels:
[1:44:41] This is the p-p-p-p-p post post game show.
Becca:
[1:44:49] I’m Becca.
Taylor:
[1:44:50] I’m Taylor.
Jewels:
[1:44:52] I’m Jewels.
Becca:
[1:44:53] Thanks for joining us. We spendta lot of time on this one and we’re very excited to hear your thoughts. So please comment, subscribe. Hit us up on instagram, @vaginancepodcast. Hit us up on our website, vaginance.com. Send us a voice memo. Tell us your deep thoughts, your fantasies.
Maggie:
[1:45:18] Are you moral?
Taylor:
[1:45:19] Erotic. About Charlie Munger. And if you’ve actually written fanfic about Warren Buffett and Charlie Munger, I would absolutely, I would pay you to read it. So please, please send it to us.
Maggie:
[1:45:33] If you had to choose between funding Elon Musk’s trip to Mars or riding a train full of crude oil, what would you pick?
Taylor:
[1:45:35] Answer that question.
Becca:
[1:45:41] We’ll put up, the poll is up in our stories on Instagram, so go vote.
Jewels:
[1:45:46] An impossible conundrum.
Taylor:
[1:45:51] What’s more moral?
Jewels:
[1:45:52] Which one has a better insurance policy?
Taylor:
[1:45:58] Oh man. Which one do I get more free Dairy Queen? Because that’s the one I’d pick.
Becca:
[1:45:59] Fuck yes, Dairy Queen and their dairy free options. Um, thanks for joining us on this, y’all. We really appreciate it. And we look forward to hearing from you. Bye. Vaginancial advisors signing off.
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