Introduction:
The 2022 Daily Journal Corporation Annual Shareholder Meeting was held virtually due to health and safety concerns. Stephen Michael Jones, the new chairman and interim CEO, presided over the meeting. Charles T. Munger, the legendary investor and former chairman, joined the meeting as a director.

Formal Business:
Election of Directors: Four directors were elected: Charles T. Munger, Mary Conlon, John B. Frank, and Stephen Michael Jones. Ratification of Independent Registered Public Accounting Firm: Baker Tilly U.S. LLP was ratified as the independent auditor for the fiscal year. Advisory Vote on Executive Compensation: Shareholders approved the advisory note on executive compensation. Advisory Vote on Frequency of Advisory Vote on Executive Compensation: Shareholders elected to hold the vote on executive compensation once every three years.

Q&A Session:
Becky Quick, from CNBC, moderated the Q&A session, with most questions directed to Charles T. Munger. Questions covered a wide range of topics, including investing, psychology, and the future.

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Questions from Shareholders:
CEO Selection: Ryan Fusaro inquired about the performance of interim CEO Stephen Myhill Jones and when a decision on a permanent CEO will be made.

Response from Stephen Myhill Jones:
Jones explained that he initially had reservations about being the long-term CEO due to his limited experience in publishing and the legal sector. However, after gaining a better understanding of the company, he believes he can add value and enjoys the business and its potential. He expects clarity on the long-term approach, including the possibility of hiring someone better suited or promoting from within, later this year.

Questions from Shareholders:
Capital Allocation: Paul Pham asked whether the technology business is a natural area for allocating excess capital for the best return on equity.

Response from Charlie Munger:
Munger explained that the company made significant profits from the publishing business during the foreclosure boom, but the rise of the internet led to a decline in circulation and revenue. He sees the future of the company in Journal Technologies, which operates in a large market where courts worldwide are still in the Stone Age regarding automation. Munger acknowledged that it is a slow and difficult process to penetrate the market due to bureaucracies and RFPs but believes that the company is well-positioned in a vast and growing market. He compared the challenges faced by newspapers, such as Gannett, to the opportunities in the technology sector, emphasizing the importance of adapting to technological changes.

Slow and Steady Progress:
Charlie Munger emphasizes the gradual nature of digitizing court systems due to complexity, risk, and bureaucracy. Despite this, Berkshire Hathaway has accumulated marketable securities due to strong investment performance and a preference for them over cash in an inflationary environment.

Journal Technology as the Future:
Munger acknowledges that while the company has survived and achieved surplus wealth, the main focus for the future lies in journal technologies.

Addressing Shareholder Concerns:
Gareth Moore raises concerns about the longevity of journal technology solutions and the risk of disruption by newer technologies in the fast-paced software innovation landscape.

Steve’s Perspective:
Steve acknowledges the absence of guarantees but draws on his experience in managing technology change at his previous company for 19 years. He highlights the importance of leveraging technology change for the benefit of the company and its customers rather than allowing it to be a hindrance.

Planning for Change:
Advanced planning and investment are essential to engineer software that can accommodate changes over time and is inherently upgradable.

Financial Sustainability:
Establishing a sufficient licensee base is crucial to fund proactive R&D, ensuring the evolution of products in a way that manages technology change.

Ongoing Process Mindset:
Enterprise software development and customer deployments should be viewed as ongoing processes rather than one-time events.

Munger’s Views on Daily Journal Stock:
Despite Daily Journal’s stock price being below the price he would pay for new shares, Munger believes the valuation is reasonable given current market conditions. He emphasizes the need for surplus wealth to attack the large market opportunity and attract courts to RFP contracts. Munger does not actively buy or sell the stock and sees no compelling reason to do so at the current price.

Bank Stocks and Tax Considerations:
Munger explains Berkshire’s decision to hold bank stocks, despite unloading them at Berkshire Hathaway. Tax considerations in California make it disadvantageous to sell the bank stocks due to high state and federal taxes on capital gains. The dividends from these stocks are almost tax-free, making it a favorable option for Berkshire.

Daily Journal Board Governance:
Munger addresses concerns about the Daily Journal board’s ownership structure, with three out of five directors owning zero shares and one owning only 100 shares. He explains the historical context, with Guerin and Munger being the previous major shareholders who did not take fees or expenses. Munger emphasizes that the new directors are intelligent, wealthy, and share a capitalist mindset, similar to Berkshire Hathaway’s board.

Equity Participation for Newcomers:
Munger acknowledges a question about the timing of equity participation for newer shareholders. He indicates that this aspect will be worked out in the future.

Business Strategy and Market Position: Charlie Munger emphasizes his commitment and responsibility in leading the business, highlighting the trust placed in him by Mr. Munger and the board. He discusses the company’s niche in a large, complex market, particularly focusing on its unique approach to handling consulting contracts. This sets the company apart from its competitors, who generally prefer easier, repetitive tasks over the challenging projects his company takes on. This strategy has allowed them to operate with fewer competitors.

Reflections on Partnership and Loss: Munger shares personal reflections on his long-standing partnership with Rick Aaron, noting the deep bond formed through years of collaboration from their early, struggling days. He speaks to the strength of their relationship, developed through shared experiences of poverty and success, and expresses the profound sense of loss following Aaron’s passing.

Perspective on AI and Business Impact: Addressing the topic of artificial intelligence, Munger provides a balanced view. He acknowledges the significance of AI, while also cautioning against the hype surrounding it. He believes that AI won’t be a panacea for all problems, such as curing cancer, and views it as a mixed blessing. Munger points out that while AI has been effectively used in certain areas like insurance underwriting, its application in other fields, like real estate, may be overestimated.

AI’s Role in the Daily Journal Corporation: From the perspective of the Daily Journal Corporation, AI’s impact is discussed in the context of journalism. The company has experimented with AI for writing certain types of articles. While acknowledging the potential for AI to disrupt routine tasks, Munger notes the long road ahead for AI in handling more complex work.

Dealing with Mental Biases: Finally, Munger responds to a question generated by ChatGPT about overcoming mental biases in decision-making. He acknowledges the challenge of bias but doesn’t provide a specific answer on how he personally guards against it. His response indicates an awareness of the complexities involved in decision-making processes and the importance of recognizing and addressing biases.

Denial as a Major Factor in Human Bad Decisions:
Charlie Munger asserts that denial is the primary factor contributing to poor human choices. When confronted with unpleasant truths, the mind plays tricks, causing individuals to believe that the situation is not as dire as it actually is.

The Impact of Denial on Business:
Denial leads to businesses continuously investing in outdated practices despite their ineffectiveness in the current market landscape. Munger cites investment management as an example of denial’s harmful effects.

Challenges in Investment Management:
Munger estimates that only around 5% of investment managers consistently outperform the indexes after considering all costs. The majority of managers operate in a state of denial, continuing to charge substantial fees for services that do not benefit their clients.

Moral Depravity in Investment Management:
Munger considers it morally wrong for investment managers to charge high fees to widows and provide them with worthless advice. This practice is prevalent throughout the investment management industry, leading to widespread denial.

Quoting Demosthenes on Belief and Desire:
Munger emphasizes the significance of Demosthenes’ quote, “what people wish is what they believe.” This quote highlights the extent to which people tend to believe what they want to be true, even when evidence suggests otherwise.

Agency Costs and Denial in Money Management:
Munger highlights the enormous agency costs in money management, which run into billions of dollars. The industry’s denial prevents individuals from confronting these costs and acknowledging their negative impact.

Self-Interest over Client Well-being:
Munger observes that many investment managers prioritize their own financial interests over the well-being of their clients. This leads to practices that benefit the managers but harm the clients, such as charging excessive fees for subpar advice.

BYD’s Success and Competition with Tesla:
BYD’s exceptional performance in China, making over $2 billion in after-tax profits in the auto business last year, surpasses even Tesla’s achievements. Despite Tesla’s price cuts in China, BYD increased its prices, reflecting its strong position in the market. BYD’s manufacturing capabilities dwarf Tesla’s, with its facilities in China covering a vast area comparable to Manhattan Island.

BYD’s Remarkable Growth and Munger’s Role:
Munger highlights the remarkable rise of BYD, which initially focused on cell phones and then ventured into the auto industry against the advice of Munger and Li Lu. BYD’s success underscores the element of chance in life, as its foray into the auto business proved to be a resounding triumph.

Leverage in Investing:
Munger acknowledges using leverage in recent investments due to exceptional opportunities, despite his and Warren Buffett’s preference for operating without leverage. He emphasizes the importance of carefully evaluating the potential returns and risks associated with leverage, suggesting that it may be appropriate in certain circumstances. Munger recalls using leverage early in his career and draws parallels to Buffett’s past practices, such as borrowing stocks for event arbitrage.

Geopolitical Events and Investment in China:
Munger comments on Jack Ma’s public criticism of the Chinese Communist Party, leading to his disappearance and departure from BYD. He views Alibaba as a retailer facing competition in the internet space, cautioning against the assumption that it will be an easy success. In response to questions about China’s investment viability, Munger suggests that the chances of a major confrontation from China have decreased due to the events in Ukraine.

China’s Leader and Taiwan:
Charlie Munger believes the Chinese leader is intelligent and practical, which may have influenced China’s decision not to invade Taiwan. This decision could positively impact investors’ prospects in China.

Investment Opportunities in China:
Munger highlights that China offers better investment opportunities compared to the United States. Investors can acquire stronger companies at cheaper valuations in China, making it a worthwhile risk due to the additional value.

Political Events in China:
Munger expresses optimism about China’s leader and acknowledges his achievements, including an anti-corruption drive. He emphasizes that no government is perfect and mistakes are inevitable, comparing it to the imperfections of democracies.

Navigating Imperfections:
Munger advises investors to focus on investing in individuals with good judgment rather than expecting infallibility. He acknowledges that life is filled with errors and imperfections, and investors should adapt accordingly.

The Semiconductor Industry:
Charlie Munger expresses skepticism about the semiconductor industry due to its requirement for constant reinvestment of profits to stay competitive. He acknowledges the success of Taiwan Semiconductor and the potential for significant rewards but emphasizes the challenges and risks involved. Munger questions the long-term dominance of Intel, highlighting their current struggles in keeping up with the industry’s advancements.

Chips and Science Act:
Munger acknowledges the potential benefits of incentives to build semiconductor plants in the United States but emphasizes that companies are still borrowing money for these projects. He doubts government forgiveness of these loans, unlike previous business loans during the pandemic.

Government Conditions on Semiconductor Loans:
Munger expresses concern about the potential for government conditions on companies using semiconductor loans, given the intertwined nature of government policies in China and the United States. He admires Taiwan Semiconductor’s strength but acknowledges that his personal preferences and age may influence his investment decisions.

Cryptocurrencies:
Munger strongly opposes cryptocurrencies, referring to them as “Crypto Crapo” or “Crypto Shit.” He believes they are worthless, harmful, and antisocial, and criticizes governments for allowing their existence. Munger praises the Chinese leader’s decision to ban cryptocurrencies in China.

Stating Arguments Against One’s Position:
Munger maintains his stance that one should be able to state arguments against one’s position, but he doesn’t believe there are any valid arguments against his position on cryptocurrencies. He considers cryptocurrencies to be so harmful that there is no room for rational debate.

Gambling:
Munger distinguishes between modest betting on events like the Super Bowl and the rampant speculation and cheating involved in cryptocurrencies. He views moderate gambling as acceptable, especially when done with friends rather than through bookies.

Gambling:
Munger disapproves of gambling and urges against betting against the odds.

Shorting:
Munger rarely shorts stocks and has only done so three times in his life, all more than 30 years ago. He views shorting as a high-stress and irritating endeavor, despite making a million dollars from a currency bet.

Costco:
Munger highly values Costco’s strong culture and low markup policy. He believes Costco has a marvelous future and is a total addict of the company. Despite its high valuation, Munger sees no reason for Costco to stop performing well as long as it maintains its current culture.

Stock Buybacks:
Munger does not provide a direct opinion on the proposed increase in the tax on stock buybacks.

Opposition to Stock Buybacks:
Charlie Munger strongly opposes stock buybacks when a company could use its money to buy back its own stock at a more advantageous price, as it is akin to stealing from shareholders.

Encouraging Morality and Honor:
Munger believes in fostering a culture of morality, decency, and honor, especially when dealing with people for whom one is a fiduciary.

Disagreement with the President:
While Munger agrees with the president on some issues, he vehemently disagrees with the president’s stance on stock buybacks.

Stock Buybacks at Berkshire Hathaway:
Berkshire Hathaway’s share repurchases slowed from $3 billion in Q1 2022 to $1 billion in Q2 and Q3, despite a decline in the stock price. Munger approves of Berkshire’s buyback strategy and considers it beneficial for shareholders. He criticizes the government’s taxation of stock buybacks, as it penalizes companies for doing something good for their shareholders.

Stock Compensation and Wealth Distribution:
Munger acknowledges that many executives are paid with stock compensation and that this can lead to increased compensation through stock buybacks. He understands the president’s sympathy for employees and the need to distribute wealth fairly but does not have a definitive opinion on how wealth should be distributed. Munger believes that a capitalistic system is essential for economic productivity and societal advancement.

Reassurance to Shareholders:
Munger reassures shareholders that Berkshire Hathaway’s current structure and philosophies will be preserved after Warren Buffett and his departure. He dismisses the idea of breaking up the company, emphasizing that the company’s strength lies in its entirety and the ability of its divisions to support each other.

Berkshire Hathaway’s Future Outlook:
Charlie Munger believes Berkshire Hathaway (BRK) is a solid long-term investment and unlikely to be broken up due to the value of its assets and tax implications. He views the company’s share buyback strategy as beneficial for shareholders and believes that BRK’s performance over the next 20 years will be positive.

Investment Environment:
Munger predicts that the investment environment will become more challenging in the future due to higher valuations and government hostility toward businesses. He anticipates increased taxes and anti-business sentiment in major democracies, leading to a tougher period for investors.

Personal Habits and Longevity:
Munger attributes his longevity to a lack of exercise throughout his life, except for mandatory military training. He believes in adapting to limitations as one ages and emphasizes the importance of shrewdness in managing age-related decline.

Mental Acuity and Aging:
Munger acknowledges that mental acuity declines with age but highlights the ability of some individuals to adapt and maintain sound judgment. He believes that, despite experiencing some decline, he remains capable of handling it effectively, leading to positive outcomes in his old age.

Interest Rate Environment and Investment Strategy:
Munger recognizes that rising interest rates negatively impact stock prices but considers it a factor to adapt to in investment life. He emphasizes the need to own stocks instead of government bonds due to the inflationary nature of democratic politics, which leads to more printing and spending of money.

Debt Limit and Political Implications:
Munger views the debt limit as a necessary mechanism to prevent excessive spending and avoid economic disasters like the Great Depression. He cites the rise of dictatorships and Adolf Hitler as consequences of economic crises and highlights the importance of preventing such outcomes.

Munger’s Admiration for Post-World War II U.S. Policy:
Munger expressed his pride in the U.S. government’s handling of the aftermath of World War II. He commended the bipartisan effort to rebuild Germany and Japan, transforming them into allies instead of punishing them. This magnanimous act reflected well on the U.S. and demonstrated the country’s capacity for generosity and foresight.

Munger’s Perspective on Inflation and the Federal Reserve:
Munger acknowledged the likelihood of future inflation, similar to the waves experienced before Volcker’s intervention in the 1970s. However, he declined to make short-term predictions, stating that his expertise lies in long-term expectations rather than short-term fluctuations. Regarding Jay Powell’s handling of the current economic situation, Munger expressed confidence in Powell’s competence, intelligence, and commitment to doing his best.

Munger’s Concerns about Index Funds and Corporate Governance:
Munger raised concerns about the growing concentration of voting power in the hands of a few index funds, describing it as an alarming trend. He criticized the notion that index funds should attempt to influence corporate policies and politics, arguing that their role should be limited to improving investment management for their clients. Munger expressed his hope that Vanguard and Larry Fink’s operation would retreat from their attempts to influence corporate governance, acknowledging that they lack special expertise in running American corporations.

Munger’s Views on Stock-Based Compensation:
Munger acknowledged the prevalence of good, liberal, and negligent incentive systems in American corporations, reflecting the diversity of human nature. He criticized the excessive use of stock-based compensation in some companies, where it distorts earnings and leads to a competition for higher compensation packages. Munger highlighted Costco as an example of a near-perfect compensation system, where stock issuance is balanced by stock buybacks, avoiding net dilution. He observed that excessive executive compensation has become a significant issue in recent decades, contrasting it with the absence of such complaints during his youth.

Elon Musk and Twitter:
Charlie Munger refrains from commenting on Elon Musk’s ownership of Twitter due to his limited Twitter usage. He acknowledges Musk’s talent but considers him a peculiar individual and avoids buying or selling his stocks.

Missouri Court Verdict:
Munger expresses doubt about the Missouri court’s $5.2 million verdict against Berkshire subsidiary Geico for an STD infection in an insured car. He acknowledges the potential for occasional outrageous verdicts and the role of appellate courts in addressing them.

3G Partnership and Private Equity:
Munger acknowledges that some deals with 3G, like the Kraft Heinz transaction, have not performed as well as expected. He emphasizes the challenges and variability in the private equity business, where not all deals are successful.

Disney’s Investment Potential:
Munger clarifies that Berkshire Hathaway has never owned Disney shares, contrary to the assumption in the question. He observes that Disney’s businesses have faced increased competition, making them less lucrative compared to their past successes.

Kodak’s Downfall and Disney’s Future:
Munger cites Kodak’s decline as an example of how dominant companies can be disrupted by technological changes. He expresses uncertainty about Disney’s future trajectory, given the challenges it faces in various businesses, including ESPN and movies.

Charlie Munger on Hollywood:
Munger dislikes the culture of the film industry and finds it challenging for investors to make money.

Population Growth and Malthusian Predictions:
Munger believes that the doomsday predictions of population growth, as propounded by Paul Ehrlich, have been proven wrong. As countries prosper, the birth rate tends to decline, leading to a self-limiting population in developed nations.

Business Mistakes and Lessons Learned:
Munger highlights the rise and fall of IBM as an example of how even successful companies can struggle to adapt to disruptive technologies. He emphasizes the importance of recognizing and embracing change in the face of new competitive realities.

Systemic Racism in the United States:
Munger acknowledges the existence of systemic racism in the United States but believes that it has improved significantly during his lifetime.

Climate Change and Insurance Industry Impact:
Munger expresses uncertainty about the extent of climate change’s impact on the insurance industry but suggests that it may not be as severe as some predict.

Teaching Personal and Corporate Finance to Undergraduates:
Munger stresses the importance of good judgment in financial decision-making, which is developed over time through experience. He advises focusing on teaching those who are receptive to learning and not wasting time on those who are not.

Secret to a Happy Life: Low Expectations and Under-promising:
Munger advocates for setting low expectations and working hard to achieve them, rather than making unrealistic promises and disappointing others.

Advice to Elders During the Pandemic:
Munger shares his experience of contracting COVID-19 after vaccination, resulting in only mild symptoms. He emphasizes the importance of caution to prevent falls, especially for seniors, and shares his personal use of a walker and wheelchair to maintain safety.

Berkshire’s Position in Occidental and Chevron:
Occidental and Chevron are admirable companies with strong positions in the Permian Basin. Berkshire’s large investment in these two companies is likely to be a good long-term hold.

Ben Graham’s Investment Approach:
Ben Graham’s cigar-butt approach was successful during a time when there was plenty of undervalued, mediocre businesses. Graham made most of his money through a single stock, Geico, which was a great business. Graham himself evolved in his approach, recognizing the value of investing in great businesses.

Charlie Munger’s Willingness to Pay Up for Great Businesses:
Munger recognized the importance of investing in great businesses, even at a higher price. He believes that it is obvious that a great company is more likely to produce good results.

Evaluating a Company for Investment:
Munger emphasizes both the business and the management when evaluating a company. A great business with a great manager is ideal, but it’s rare to find both. Investing in great managers with lousy businesses has not been a successful strategy for Berkshire.

Coca-Cola Example:
Coca-Cola was once run by a manager with severe mental impairment for years. The business was so strong that it could still perform well despite poor management.

Importance of Diversification:
Munger views excessive diversification as an average return strategy. He prefers to focus on a few great businesses rather than diversifying widely.

Challenges in Identifying Great Businesses:
Finding great businesses before they become widely recognized is difficult. Many professional asset managers are not skilled enough to identify such opportunities.

Index Funds as a Default Investment Strategy:
Munger recommends index funds as a default investment strategy for most people. It’s a logical approach that requires minimal effort and provides reasonable returns.

Mistakes and Learning from Them:
Munger acknowledges that everyone makes mistakes, including himself. He emphasizes the importance of learning from mistakes and eliminating them. He shared an example of overestimating Alibaba’s future returns due to being charmed by online retailing.

Charlie Munger on Healthcare Systems:
Munger criticized the high costs of the American healthcare system. He compared the failure of the JPMorgan Chase, Amazon, and Berkshire Hathaway healthcare venture to a “tapeworm” winning.

Charlie Munger’s Daily Routine:
Munger follows a regular daily schedule and is a good sleeper.

Charlie Munger’s Thoughts on Presidential Politics:
Munger declined to endorse any presidential candidate for 2024, stating that he did not want to get involved in presidential politics.

Charlie Munger on the New Edition of Poor Charlie’s Almanac:
Munger confirmed that a new edition of Poor Charlie’s Almanac is in the works.

Charlie Munger’s Admiration for Benjamin Franklin:
Munger praised Benjamin Franklin as a genius who rose from poverty to become the best inventor, scientist, writer, and diplomat in the United States. He highlighted Franklin’s ability to learn and invent despite having limited formal education. Munger attributed Franklin’s success to his high IQ and pithy way of speaking. He mentioned Franklin’s inventions, such as the Franklin stove and bifocal glasses, as examples of his genius.

1. Ben Franklin: A Remarkable Polymath
Charlie Munger expresses admiration for Benjamin Franklin, emphasizing his exceptional abilities as a writer, scientist, inventor, and diplomat. Franklin’s accomplishments stand out as unique and remarkable in history.

2. New Edition of Poor Charlie’s Almanac
Munger mentions that an online edition of Poor Charlie’s Almanac is in the works. The Chinese edition of the book has sold more copies than the U.S. edition, attributed to the cultural significance of a wealthy elderly figure in China.

3. Delayed Gratification and Life Philosophy
Munger emphasizes the importance of delayed gratification, citing his own practice of deferring gratification in favor of long-term benefits. He highlights the connection between delayed gratification and life success, supported by studies on children’s marshmallow experiments. Munger’s approach to life involves finding opportunities for deferred gratification, contrasting with others who prioritize immediate enjoyment.

4. Warren Buffett’s Qualities as an Investor
Munger credits Warren Buffett’s success to his strong fiduciary gene, demonstrating genuine concern for shareholders’ well-being. Their early shareholders’ trust in them during their younger, less reputable years has fostered a deep sense of loyalty. This loyalty to shareholders continues to guide their decision-making at Berkshire Hathaway.

5. Self-Insurance and Avoiding Waste
Munger advocates for self-insurance in many aspects of life, except for medical expenses. He believes it is unnecessary to carry insurance for risks that one can afford to bear, avoiding the complexities and inefficiencies of the claims process. Munger criticizes the high costs of American medical care and insurance, contrasting them with Singapore’s more efficient and affordable healthcare system.

Greg Abel’s Remarkable Qualities:
Greg Abel is an exceptional business leader, combining exceptional thinking and execution skills. He excels in achieving results smoothly through others, making him an asset to Berkshire Hathaway. Abel possesses an incredible capacity for learning, comparable to Warren Buffett’s.

Warren Buffett’s Trust in Greg Abel:
Buffett recognizes Abel’s strengths and assigns him tasks that align with his expertise, maximizing his contributions to Berkshire Hathaway.

Abel’s Approach to Utility Regulation:
Abel approaches utility regulation with a unique perspective, envisioning himself as the regulator and striving to run utilities accordingly. This approach demonstrates his commitment to fairness and integrity in business dealings.

The Golden Rule in Business:
Munger emphasizes the effectiveness of treating others the way one wants to be treated, aligning with the Golden Rule. This approach fosters positive relationships and leads to successful business outcomes.

Social Security Considerations for Retirees:
The decision to take Social Security at age 67 or 70 depends on individual circumstances and life expectancy. Those with a shorter life expectancy may prefer to receive more money sooner, while those expecting a longer life may benefit from deferring Social Security for increased monthly payments. Munger suggests that healthy individuals with a good life expectancy should generally defer Social Security to receive more money later.

Private Property and Economic Growth:
Munger emphasizes the importance of private property for economic growth. He argues that most decisions should be made by the owners of the property, leading to a more efficient system and higher GDP per capita.

The Inevitability of Death in the Business World:
Munger compares the business world to the physical world, where animals die to allow other species to thrive. Similarly, businesses inevitably die to make way for others. Kodak, Xerox, and IBM are examples of once-dominant companies that declined or disappeared.

Jim Senegal and Greg Abel as Exemplary Business Leaders:
Munger praises Jim Senegal, former CEO of Costco, for his exceptional leadership and understanding of the business. He also admires Greg Abel, CEO of Berkshire Hathaway Energy, for his ability to manage people and solve problems.

Rationality as the Most Important Quality:
Munger believes that rationality is the most important quality for success in life. Avoiding irrationality gives a significant advantage over most people and, when combined with patience, gratification deferral, and commitment fulfillment, leads to improved life chances.

The Challenges of Holding on to Rationality:
Munger acknowledges that maintaining rationality is difficult, but it improves with practice. However, success, age, and wealth can make it more challenging.

The Impact of Age and Wealth on Behavior:
Munger observes that people tend to become more pronounced in their characteristics as they age and accumulate wealth. Habits, such as economizing, become ingrained and difficult to change.

Daily Journal Technologies and BYD Comparison:
Munger acknowledges that Daily Journal Technologies will not achieve the same level of success as BYD, a Chinese electric car company. BYD’s success is attributed to the exceptional qualities of its founder, Wang Chunfu, who transformed a bankrupt auto company into a global leader in electric vehicles.

BYD Investment:
Berkshire Hathaway’s investment in BYD, initiated by Charlie Munger, has been remarkably successful. The initial $270,000 investment has grown to approximately $8-9 billion, demonstrating an exceptional rate of return.

Ajit Jain Investment:
Charlie Munger considers the recruitment of Ajit Jain as Berkshire’s best investment. Jain’s contributions have far outweighed the cost of hiring an executive recruiter, making it a highly profitable move.

Conclusion:
Charlie Munger’s investment acumen is evident in his success with BYD and the recruitment of Ajit Jain. These investments highlight his ability to identify and capitalize on exceptional opportunities.