Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Berkshire Hathaway's Charlie Munger Isn't Worried About Inflation: 'I'm Always Aware Of It, But It Doesn't Stop Me From Operating'

Published 29/07/2022, 18:54
© Reuters.  Berkshire Hathaway's Charlie Munger Isn't Worried About Inflation: 'I'm Always Aware Of It, But It Doesn't Stop Me From Operating'
BERK
-
IX
-

Charlie Munger, one half of the dynamic duo that transformed then-dying textile business, Berkshire Hathaway (NYSE:BRKa) Inc (NYSE: BRK.A) (NYSE: BRK.B), into one of the world’s most profitable and lucrative holding companies said he’s not worried about macroeconomic trends and ignores them like the weather.

What Happened: Munger, from the library of his Los Angeles home, was part of a Zoom Video Communications Inc (NASDAQ: ZM) meeting with Charles Jennings of Stonehouse Corporation, a Berkshire Hathaway-style investment company to which Munger entrusted a stake of his personal wealth, to discuss a wide array of topics — mostly paying homage to Jennings’ Warren Buffet-Munger style of investing.

“I’m always aware of [inflation], but it doesn’t stop me from operating," Munger said. "I’m 98½ years of age, and I’ve seen a lot of inflation. I intend to live through inflation. I’ve lived through a lot of it already in my long life. It doesn’t discourage.”

Ignoring macroeconomic trends has been a forbearance of Berkshire’s strategy since Buffett took control of the company in 1965.

"I don’t pay much attention to macroeconomic trends. Like the weather, I just ignore the weather. I just try to invest whatever capital I have as best I can and take the results as they fall. I just seize whatever opportunities I can and I hope I get my share."

This can be illustrated most recently in Berkshire’s multiple share purchases of Occidental Petroleum Corporation (NYSE: NYSE:OXY), an oil and gas exploration company that has quite an exposure to the macroeconomic trends including geopolitical tensions, supply chain constraints and the wild price action in crude oil that affects the stock’s price.

Munger and Buffett have been quietly increasing their stake in OXY — the pair owns a staggering 18.7% of the company, with Munger saying oil and fossil fuels aren’t going away anytime soon.

“I think we’re going to be using fossil fuels for a long time ahead because we have to,” Munger said. “If you stop to think about it, the present population of the world couldn’t eat if we didn’t use natural gas to create nitrogen fixer fertilizer — we’re not going to get rid of fossil fuels, we’re just going to use less of them,” Munger noted.

Photo: Kent Sievers via Shutterstock

Original publication: July 19, 2022.

© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Read at Benzinga

Read the original article on Benzinga

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.