Charlie Munger: "STOP Worrying and Just DO What's Right." | DJ 2017 【C:C.M Ep.247】

 

[Transcript]

CHARLIE MUNGER: When I was a lawyer, there was a saying that I’ve always used, “The best business-getter any lawyer ever has is the work that’s already on his desk.” And that’s the basic ethos of our software business.

 

If we just keep doing it right, I don’t think we have to worry about the future. Not that we won’t have down drafts and our failures, but we are actually grinding ahead slowly in that software business.

 

And it’s very interesting because Guerin and I know practically nothing about it. And Gerry didn’t come up as a software engineer, so we’re basically doing something that’s quite difficult, we’re judging people because we don’t understand what the people do.

 

And that’s what Andrew Carnegie did, of course, he didn’t know anything about making steel. But he knew a lot about judging whether the people he was trusting were good at making steel. And of course, that’s what Berkshire’s done if you stop and think about it. We have a lot of businesses at Berkshire that neither Warren or I could contribute much to, but we’ve been pretty good at judging which people are capable of running those businesses.

 

But this is pretty extreme here. The little Daily Journal company going into the computer software business. And it’s a long slow kind of business, RFPs... The first time we contact a customer until we start making money may be 5 years. And it just keep doing that over and over again, and of course the money goes out and the effort goes out, and it starts coming in 5 years from now.

 

I love that kind of stuff, not when — I think we’re taking territory, it doesn’t look good when we write it off and we don’t report wonderful numbers or anything. But if it makes sense in the long-term, we just don’t give a damn what it looks like over the short term.

 

And we know we’ve collected a bunch of shareholders that share our ideas. After all we’re running a cult not a normal company. And I think most of you feel that you’re willing to wait.

 

I lived all my life with people who were into deferred gratification. In fact, most of them will never have any fun. They just defer gratification all the way to end, that’s what we do. And it does cause you to get rich. So we’re going to have a lot of rich dead people. But we can excite a lot of envy. A lot of you when the people walk by your grave and there will be this nice grave with this nice monument and they’ll say, “God what a great grave, I wish I were under it.”

 

But at any rate, deferred gratification really does work if what you’re interested in doing is running a business that gets better and better or getting wealthier yourself so that your grave can look nice to outsiders.

 

And Guerin and I have never taken any money out of this company in all these years. We don’t take salaries, we don’t take directors fees. We’re a peculiar example. I wish our example spread more, because I think if you’re wealthy and own a big share of a company, and you get to decide what it does and whether it liquidates or whether it keeps going, that’s a nice position to be in, and maybe you shouldn’t try and grab all the money in addition. And that’s my theory of executive compensation.

 

And some of the old-fashioned guys like Carnegie never took any salary to speak of. Cornelius Vanderbilt didn’t take any — Cornelius Vanderbilt, of course he owned the whole place, practically, and he would have considered beneath him, he lived on the dividends like the shareholders did.

 

And so there’s a lot of that old fashioned ideas here in the Daily Journal company.

 

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

 

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