Collection: Charlie Munger - #10 '1970s Nifty Fifty Craziness'



[Transcript]

AUDIENCE MEMBER 00:08

Question I have, with the deficits so high are interest rates more in a bubble situation? And I remember back in the ‘70s we had the Nifty Fifties. Is our technology stocks in the same criteria as it is now?


It feels like there’s 10-15 stocks that everybody’s investing in, the value situation has been down for the last four or five years. I was also looking at a couple of stocks that you own, like Kraft Heinz. With your 26% in the company, how come – is it make sense for your company, for Berkshire Hathaway to buy out Kraft Heinz completely and take advantage of a low price?


CHARLIE MUNGER 00:51

Well, I don’t think I can comment of what Berkshire Hathaway might do next at what price.


Nifty Fifty is an interesting question. At the heights of the Nifty Fifty craziness, which was created by the Morgan bank of all places, it had a home-sewing company that was selling at 50 times earnings. Home-sewing, great god.


We are not that crazy yet. So I don't think that – I think there's a lot of what has happened is not crazy yet. I think these companies are very valuable, though they may be selling at too high prices.


But home-sewing was sure to fail. I don’t think our leading tech companies are at all sure to fail. But I think it's not nearly – the current situation is not nearly as crazy as well. Nifty Fifty was absolute dementia.


(Source: https://youtu.be/HS8neXkNnhw)

 

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