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Speaker 1: I think of days as to the death of John

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Speaker 1: Templeton and what surveillance did, and we do this today

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Speaker 1: with Charlie Munger. We had Terry Weisman on great to

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Speaker 1: have Sam Stovall on and Doug cass with his intimate

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Speaker 1: relationship with Berkshire Hathaway. We finished strong with the Howard Marx,

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Speaker 1: chairman of oak Tree Capital Management, and I must point

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Speaker 1: out author of not one, two, but three important books

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Speaker 1: on investing of What to Do and just as importantly

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Speaker 1: Howard What Not to Do. Howard on Charlie Munger Getting

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Speaker 1: the odds on your side? How did Charlie Munger get

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Speaker 1: the odds on his side?

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Speaker 2: He started off with a brilliant mind and a brilliant partner.

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Speaker 2: He intensively studied the financials for thinking about the long term.

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Speaker 2: He never tried to guess what a company or a

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Speaker 2: stock would do in the short term, and he held

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Speaker 2: for many years. You know, he was a great practitioner.

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Speaker 2: Sit on your hands, and he did it flawlessly.

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Speaker 1: In the modern day, in the modern media, I remember

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Speaker 1: reading those annual reports Howard. Years ago, there was no

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Speaker 1: financial media, there was no blogging internet. The short termism.

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Speaker 1: We're living it now. What is the lesson of Charlie

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Speaker 1: Munger's long termism.

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Speaker 2: Well, if you want to hit the long ball, you

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Speaker 2: have to be very patient, and you know, when the

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Speaker 2: stock moves up the first twenty percent, you can't start

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Speaker 2: taking profits.

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Speaker 3: Charlie and Warren have held things for decades.

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Speaker 2: And the other thing is they were and Charlie always

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Speaker 2: talked about this, you have very few moonshots. Charlie said

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Speaker 2: within the last year that most of his wealth came

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Speaker 2: from four decisions. And so you know what would have

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Speaker 2: happened if he would have started trimming those four decisions early,

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Speaker 2: he certainly would not have accomplished what he did.

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Speaker 3: And I think Warren would say the same thing.

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Speaker 2: Maybe the number four would be a little different with Warren,

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Speaker 2: but you know, you know, Warren's famous for having said,

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Speaker 2: put all your eggs in one basket, and I watched

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Speaker 2: the basket really closely, and I think that it wasn't

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Speaker 2: one basket. But the idea of concentration and patience coupled

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Speaker 2: with good decisions makes for a great success. You know,

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Speaker 2: a concentration and patience don't accomplish anything if you can't

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Speaker 2: make above average investment decisions. But putting it all together

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Speaker 2: is the formula for success.

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Speaker 4: Howard, you wrote in some of your thoughts about Charlie

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Speaker 4: Munger that he had very definite opinions, in particular regarding

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Speaker 4: the investment management industry. He viewed the industry with considerable skepticism,

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Speaker 4: and while a member of it, I found myself in

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Speaker 4: agreement with him more often than not. What exactly are

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Speaker 4: you talking about in particular?

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Speaker 2: You know, I think both Charlie and Warren felt that

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Speaker 2: our industry, relatively few members of it made substantial contributions

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Speaker 2: to their clients wealth. Many more members were well paid.

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Speaker 2: He was always one who questioned incentives. He says, you

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Speaker 2: give me incentive, an incentive, I'll tell you the behavior.

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Speaker 2: And and I think that, you know, I think that

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Speaker 2: Warren and Charlie, if you their operation, they in fact

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Speaker 2: Warren's ed quotes not a partnership, not a corporation of partnership.

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Speaker 2: And they considered there there the people they manage money

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Speaker 2: for their shareholders, to be their partners. And they considered

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Speaker 2: themselves to be working for their partners and not themselves

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Speaker 2: and their own wealth. And success was a byproduct of

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Speaker 2: working of doing great work for the partners.

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Speaker 4: Uh.

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Speaker 2: You know, I I like to put my sameself in

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Speaker 2: the same boat. Those sentiments appeal to me greatly, and

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Speaker 2: I've tried to follow that.

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Speaker 4: How difficult has it been to sort of to adapt

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Speaker 4: the strategy to different eras When you had conversations with

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Speaker 4: Charlie Munger, there are questions around tech and how that

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Speaker 4: changed the investment thesis. How did they think about the

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Speaker 4: changing concept of what a wonderful company looked like and

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Speaker 4: what fair value was.

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Speaker 2: You know, you, on the one hand, you have to

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Speaker 2: evolve with the times. On the other hand, you know

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Speaker 2: they never went a full bore into the tech sector.

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Speaker 2: You know their families are having made a lot of

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Speaker 2: money with Apple, but you know, most tech, the way

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Speaker 2: they said it, they put it on the too hard pile.

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Speaker 2: And if you have if you understand that your success

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Speaker 2: will come from small number of holdings, that means you

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Speaker 2: don't need and thirty thirty, fifty sixty, You don't need

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Speaker 2: to exploit all the sceptors.

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Speaker 3: You just have to find a few great ones.

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Speaker 2: Of course, on the other hand, you know Tom said

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Speaker 2: that we're you know, we're in a new era with

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Speaker 2: all the communications we have. Part of what that means

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Speaker 2: is that the world is a more interconnected, intelligent place.

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Speaker 2: You know, back fifty years ago, we used to be

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Speaker 2: able to exploit things nobody else knew. Today, there's very

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Speaker 2: little information that doesn't make its way speedily around the world.

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Speaker 1: Howard to help us with one final question here to

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Speaker 1: the management the future management of Berkshire Halthaway. They have

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Speaker 1: a from COVID buildup of cash a four hundred and

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Speaker 1: twelve billion out to half a trillion dollars five hundred

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Speaker 1: and twenty five trillion. You and everybody else out there

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Speaker 1: is living with explosive money market fund growth. You know

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Speaker 1: the story in that forward here for Berkshire half way.

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Speaker 1: What's the best use of there in our mounds of cash?

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Speaker 2: You know, the people who run Berkshire today and will

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Speaker 2: run it tomorrow understand the limitations of size. All things

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Speaker 2: being equal, size makes it harder to outperform. They have

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Speaker 2: the best probability of outperforming of any company their size,

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Speaker 2: But their size will matter. And you know one of

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Speaker 2: my professors at University of Chicago, I asked him afterwards,

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Speaker 2: how would you manage a big fund? He'd say, I

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Speaker 2: would index the cord and manage the hell out of

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Speaker 2: the periphery, and I would imagine that at their size,

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Speaker 2: they'll have to move in the direction of something like that,

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Speaker 2: although they will not give up on outperformance.

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Speaker 1: Howard Marx, thank you with the oak Tree Capital Management

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Speaker 1: in remembrance of Charlie