Collection: Charlie Munger - #121 'Apple, Amazon, Coca-Cola, Kraft Heinz, Wells Fargo, Boeing & BRK'


Video Link: https://youtu.be/srnRfmHTQNA


In this episode, Charlie Munger answered questions regarding on Apple, Amazon, Coca-Cola, Kraft Heinz, Wells Fargo, Boeing and Berkshire Hathaway.


In this episode, you’ll learn:

  • Are Apple and Amazon technology companies or brand companies?

  • Charlie Munger on the best brand in the world.

  • Charlie Munger comment on Kraft Heinz.

  • Why Tim Sloan leave Wells Fargo?

  • The problem in Boeing.

  • The chief advantage of Berkshire Hathaway.

To check out all Collection: Charlie Munger <click here>

[Transcript]

(Source: https://finance.yahoo.com/news/influencers-transcript-charlie-munger-105001910.html)

ANDY SERWER 00:00

Are Apple and Amazon technology companies or are they brand companies?


CHARLIE MUNGER 00:04

Both.


ANDY SERWER 00:08

Someone told me they asked Warren if he could buy one brand – this was about 4 years ago – what that company, what that brand would be? And he said Gillette, which makes sense. What would that company be today?


CHARLIE MUNGER 00:25

Coca-Cola.


ANDY SERWER 00:27

Still?


CHARLIE MUNGER 00:30

If you take the amount of Coca-Cola drunk in the world and the main flavor, it's one hell of a brand. Now, it's such a different product from this stuff on the internet. I don't have the same – my judgment would not be as good on the internet as it is on Coca-Cola.


ANDY SERWER 00:53

I want to get back to Apple. Tim Cook was at the meeting yesterday.


CHARLIE MUNGER 00:57

He was, indeed.


ANDY SERWER 00:58

Did you get a chance to speak with him?


CHARLIE MUNGER 00:59

I did.


ANDY SERWER 01:00

Can you tell us what you guys talked about?


CHARLIE MUNGER 01:02

Nothing. We exchanged pleasantries, but he's a wonderful guy. And of course, it's a huge record that he's building.


ANDY SERWER 01:14

Let me ask you a little bit about Kraft Heinz and that situation. During the meeting yesterday, we found out that the chief marketing officer was leaving the company. Did you know that? And what does that mean for the company?


CHARLIE MUNGER 01:28

I knew nothing about it in advance. What happened there was very easy. The truth of the matter is that Heinz ketchup was a stronger brand than Kraft cheese. And they paid more for it. So one acquisition worked brilliantly, and the other worked poorly. Well, welcome to adult life. It happens to everybody.


ANDY SERWER 01:48

You mentioned that you think that Tim Sloan could still be or should still be the CEO of Wells Fargo.


CHARLIE MUNGER 01:55

Yeah, if I were running the world, Tim Sloan would still be the CEO of Wells Fargo.


ANDY SERWER 02:00

Well, why did he leave then?


CHARLIE MUNGER 02:02

Well, he made this decision. But he was being pushed hard. He did it for the benefit of the company. There was just so much of this partisan hatred that was washing off against Wells Fargo. It's understandable. He was there for a long time. The company had defrauded its own customers. Nobody was seemingly being punished for it in some people's minds.


Listen, two CEOs left under pressure. I regard that as a lot of punishment. So I don't think these people were failing with their anger. They removed two CEOs, and so – but now they went out, and they – it's like, Tim Sloan was not responsible for the crazy incentive system that created the trouble. So they threw him out the way you'd take out the charwoman on your way to a gambling establishment.


ANDY SERWER 03:05

Getting back to Coca-Cola, you mentioned that it would be a bad idea if it got into cannabis. I mean, why not? Doesn't it make sense?


CHARLIE MUNGER 03:13

Because it's such a wholesome brand and associated with happiness. Why do we want to associate it with a recreational drug?


ANDY SERWER 03:24

Well, they have to grow.


CHARLIE MUNGER 03:25

No, I think it would be a – I think that would be a terrible idea.


ANDY SERWER 03:28

What about Boeing and the 737 MAX? I mean, they're going to fix that.


CHARLIE MUNGER 03:35

Of course they're going to fix it.


ANDY SERWER 03:37

Would you go on the plane after they said it was fixed?


CHARLIE MUNGER 03:39

Yes, of course. And they will fix it well. But I don't think it was really all that excusable. They made the mistake.


ANDY SERWER 03:48

I want to ask you, Charlie, a little bit about –


CHARLIE MUNGER 03:50

That was a serious mistake.


ANDY SERWER 03:52

Yeah. So then they're still working on it?


CHARLIE MUNGER 03:55

Yeah, they'll fix it. Boeing probably has the best safety record in the world if you take 60 years. And this was a very unusual lapse. There may not be another one for 60 years.


ANDY SERWER 04:13

Is that lapse symptomatic, though, or indicative of us developing software that's too powerful and we don't understand the consequences of it?


CHARLIE MUNGER 04:22

No, I don't think the problem was that. I think it was just an absolute lapse of being a big bureaucracy.


ANDY SERWER 04:30

You also mentioned at the meeting yesterday doing billion-dollar deals overnight with very short contracts.


CHARLIE MUNGER 04:38

Yeah, we've always done that.


ANDY SERWER 04:39

Has that ever blown up on you?


CHARLIE MUNGER 04:41

I can't think of a single example in my whole life where keeping it simple has worked against us. We made mistakes, but they weren't because we kept it simple.


ANDY SERWER 04:56

And that's simple.


CHARLIE MUNGER 04:58

I would say that the chief advantage that Berkshire's had in accumulating a good record is that we have avoided the pompous bureaucratic systems. We've tried to give power to very talented people and let them make very quick decisions.

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