Charlie Munger on Why It’s Harder to Get Ahead Today | Final Interview with CNBC 2023

[Transcript]

BECKY QUICK: I know leverage has always been something that you guys have shied away from — using too much leverage in situations — but you’re also —

CHARLIE MUNGER: Well, yes, but it wasn’t like we didn’t use any. Insurance float gave us some leverage — that’s why we went into it.

BECKY QUICK: Right.

CHARLIE MUNGER: And averaged out over our lifetimes, we’ve benefited from insurance float.

BECKY QUICK: But I guess the difference between not wanting to over-leverage in a situation, but also knowing that if you think something is a real deal to really load up on it because you’re only going to have so many great pitches — perfect pitches.

CHARLIE MUNGER: Yeah. We’re not holding our cash for the boom that’s going to come in 1999.

BECKY QUICK: Yeah.

CHARLIE MUNGER: We may end up that way, but it may have a different protagonist. But that may happen — which is fine.

BECKY QUICK: I think some of the lessons in life that you give people though. I guess if it's so much harder to do things now — and you've talked about this — how for this generation it’s going to be harder to do things like buy a house, make the same sort of money, and be able to get ahead in such ways.

CHARLIE MUNGER: Yeah, of course. It’s going to be harder to earn the same kind of percentage returns after taxes and inflation as this last generation of endowment managers earned. They’ve trained all these universities to expect a 6% yield return because that’s what they want in order to spend as they want. But it is not given in the stars that a 6% annual return will surely be wonderful for the good investors of an era. The great bulk of the investor may earn a lot less than 6% instead of a lot more.

BECKY QUICK: I just mean for, you know, the average person who’s looking at this thinking it’s going to be harder to buy a house. Is the American dream further out of reach for young people today?

CHARLIE MUNGER: Well, for some it is and for some it isn’t. There also was never a place where anybody who got a degree in computer science got a salary, a cash bonus, and a block of cheap stock every year for free just floating in — and, sometimes, in a very good company. There are more companies like that offering benefits like that to people who are just starting out in computer science. So, in some sense, it’s easier. So for some people, it’s easier. There will always be something in a rich civilization it's a little better than other people get, as well as a little worse. All these people prospering today in computer science are in the right place and they’re prospering more.
 

Source: https://youtu.be/H5Oom5Rjp_Y?si=ZEkkZkAN6WyOWcl9

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