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Collection: Charlie Munger - #157 'Credit Suisse and Archegos Scandal'


Video Link: https://youtu.be/1-txpFIWJ1g


In this episode, Charlie Munger and Warren Buffett were asked to comment on their thoughts on Credit Suisse’s five and a half billion dollar loss stemming from its business with Archegos Capital Management.


In this episode, you’ll learn:

  • About Archegos scandal.

  • Why did Charlie Munger think Credit Suisse is the biggest fool of all in Archegos scandal?

  • Warren Buffett: "You can't make good deal with a bad person."

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

 

[Transcript]

(Source: https://youtu.be/rQJWHocG-50)

BECKY QUICK 00:00

We asked Munger and Buffett their thoughts on some of the latest headlines in the business world, those that could have lasting impact on how markets operate beginning with Credit Suisse’s five and a half billion dollar loss stemming from its business with Archegos Capital Management.


CHARLIE MUNGER 00:15

Think of how massively stupid that was.


And of course, it was the lure of the really easy money that the idiot was paying you, being the prime broker for a jerk. But he was a convicted insider trader that came out of the craziest part of the hedge fund industry. And they were getting unusual profits by extending unusual credit. I mean, it was just, the world was shouting at them, “Crook. Fool.” And they didn’t listen. They thought, “This is where the easy money is, crooks and fools.”


WARREN BUFFETT 00:49

There’s one rule –


CHARLIE MUNGER 00:50

We don’t like either of –


WARREN BUFFETT 00:51

(There’s one rule) – that we learned a long time ago is that you can’t make a good deal with a bad person. Just forget it.


Now, if you think you can draw up a contract that, that is going to work against a bad person, they’re gonna win. But one thing, they, they probably enjoy litigation but, Berkshire Hathaway as an entity, or me personally, or anything, we don’t wanna spend our life, you know, doing that sort of thing. And, and besides, the bad guys win. They know more games. They may lose eventually in the – but, it’s no way to spend your life.


BECKY QUICK 01:25

Charlie, it wasn’t just Credit Suisse that got pulled in by that. There were a lotta firms that were doing business with Archegos and –


CHARLIE MUNGER 01:31

Yes. Yes. They were all foolish. But, Credit Suisse has managed to be the biggest fool of all.

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