Charlie Munger on Valeant and the Dark Side of Corporate America | Daily Journal 2017 【C:C.M Ep.261】

 

[Transcript]

AUDIENCE MEMBER: Charlie, is there any current monkey-business in corporate America that worries you?

 

CHARLIE MUNGER: Well the answer is yes, but not as extreme as Valeant. That was really something. That was really something. I probably shouldn't have done that. (laughter)

 

But you people come so far, and since you’re cult members you like being here. And I feel an obligation to tell you something sort of interesting and I just went straight into Valeant that year. It was really pretty disgusting.

 

What’s interesting is how many high-grade people that took in. It was too good to be true. There was a lot wrong with Valeant. It was so aggressive. It was drugs people needed.

 

It was just…take the difference between Valeant and the Daily Journal Company. When the foreclosure boom came, we had 80% of the foreclosure business in our area. It’s a big area, Southern California and Northern California too.

 

It would have been very easy for us to raise the prices and make, I don’t know, $50 million more or something like that, when all these people are losing their houses. A lot of them are very decent people. It didn’t ever…the idea that just right in the middle of that we’d make all the money we could? Which some of our competitors did by the way. We just didn’t do it.

 

I don’t think capitalism requires that you make all the money that you can. I think there are times when you should be satisfied based on...just ideas of decency.

 

And at Valeant they just look at it like a game like chess. They didn’t think about any human consequences, they didn’t think about anything but getting what they wanted which was money and glory. And they just stepped way over the line. And of course in the end they were cheating.

 

But I don’t have a new one. I got a lot of publicity over that Valeant thing. I’m not looking for…I don’t want this room to have twice as many people next year. And I don’t want me not to be here either. (laughter)

 

(Source: https://youtu.be/BLctqhNClqY)

 

[YAPSS Takeaway]

"I don’t think capitalism requires that you make all the money that you can. I think there are times when you should be satisfied based on...just ideas of decency." ~Charlie Munger