3 Things 7-18
07/18/2022 Although MAS is a financial services company, not everything published herein will be about numbers or investing. But no matter the topic, we hope for three things: 1) That you find the time you spend engaged worthwhile. 2) That you’ll reach out to us for help in any of our areas of expertise if something we discuss creates an urging in you to do so. 3) That you’ll share this with somebody new each time you read it. Thing One A Bit Of Advice On Bitcoin A fellow investment advisor recently shared an article in which Charlie Munger discussed investing. Among other topics, he made his opinion clear on cryptocurrencies. See the key passages below: ...Asked about his advice for other investors considering crypto, Munger says “total avoidance is the correct policy”. “Never touch it. Never buy it. Let it pass by.” Shares in real cash-generating companies are a much better investment. “Stocks have a real interest in real businesses,” he says. “Crypto is an investment in nothing, and the guy who’s trying to sell you an investment in nothing says, ‘I have a special kind of nothing that’s difficult to make more of’. “I don’t want to buy a piece of nothing, even if somebody tells me they can’t make more of it. “I regard it as almost insane to buy this stuff or to trade in it. “I just avoid it as if it were an open sewer, full of malicious organisms. I just totally avoid and recommended everybody else follow my example.” There are certainly many people who would beg to differ with Mr. Munger on his point of view. The robust trading environment for cryptocurrencies is evidence of that. But the idea that crypto is "an investment in nothing” should at least cause us to pause and reflect before buying in.
Thing Two More On Charlie Munger Given the reference in Thing One, a brief Charlie Munger bio is in order:
As vice chairman of famed holding company Berkshire Hathaway, he is Warren Buffett's right-hand man.
He was born in 1924 in Omaha, Nebraska.
He left the Univ. of Michigan to become an Army meteorologist during World War II.
He later earned a degree from Harvard Law School and met Buffett at a dinner party in 1959.
He is also chairman of publisher newspaper publisher Daily Journal Corp. and sits on the board of retailer Costco.
Like Buffett, he's a pragmatic investor and an active philanthropist, who has given millions to universities.
With that out of the way, here are his ten rules for investment success: 1. Measure risk: All investment evaluations should begin by measuring risk, especially reputational. 2. Be independent: Only in fairy tales are emperors told they're naked. 3. Prepare ahead: The only way to win is to work, work, work, and hope to have a few insights. 4. Have intellectual humility: Acknowledging what you don't know is the dawning of wisdom. 5. Analyze rigorously: Use effective checklists to minimize errors and omissions. 6. Allocate assets wisely: Proper allocation of capital is an investor's No. 1 job. 7. Have patience: Resist the natural human bias to act. 8. Be decisive: When proper circumstances present themselves, act with decisiveness and conviction. 9. Be ready for change: Accept unremovable complexity. 10. Stay focused: Keep it simple and remember what you set out to do. We’re with Charlie 100%. Hopefully, you're with us.
Thing Three Just A Thought “It always seems impossible until it’s done.” – Nelson Mandela