Charlie Munger (Audio)

1. DRDavid Rosenthal0:00

   Ben, when we teased this episode in the email about the Jensen episode that we just released, the guesses that we were getting from folks were amazing!

2. BGBen Gilbert0:10

   I mean, people were like, "It's Charlie, it's Warren, or it's Taylor Swift," and a lot of people were right.

3. DRDavid Rosenthal0:14

   Hey, Taylor, you know where to find us: acquiredfm@gmail.com.

4. BGBen Gilbert0:18

   If you are looking to get more publicity, we're open.

5. DRDavid Rosenthal0:21

   Have Travis get in touch. [laughing]

6. BGBen Gilbert0:22

   [laughing] All right, let's do it.

7. SPSpeaker0:25

   Who got the truth? Is it you, is it you, is it you? Who got the truth now? Hmm. Is it you, is it you, is it you? Sit me down, say it straight, another story on the way. Who got the truth?

8. BGBen Gilbert0:42

   Welcome to this episode of Acquired, the podcast about great technology companies and the stories and playbooks behind them. I'm Ben Gilbert.

9. DRDavid Rosenthal0:49

   I'm David Rosenthal.

10. BGBen Gilbert0:50

    And we are your hosts. This episode is a very unique one for David and I. Good friend of the show, Andrew Marks, organized a little dinner for us with Charlie Munger and a few other folks at Charlie's home in Los Angeles. You can hear Andrew a few times in the background asking Charlie questions. We are pretty sure that this is the only podcast that Charlie has ever done. Charlie, aside from being one of the most prolific investors of all time, alongside his partner Warren Buffett, is 99 years old. He will turn 100 on January 1st. Of course, our conversation was interesting because he's freaking Charlie Munger, but also because it was interesting to get the perspective of someone who has seen the last 99 years of human history. We talked with Charlie, of course, about Costco, his history investing in retailers over the last 50 years. We also got to hear his views on what it takes to build a great partnership, what's gone wrong in the global securities markets these days, the concept of investing versus gambling, and where investment opportunities remain in the world today.

11. DRDavid Rosenthal1:53

    Yeah. Ben, this was such a special life experience for you and me, and you and me together to do this, and the fact that we got to record it and now share it with the world for posterity, just icing on the cake, and the whole thing was unbelievable.

12. BGBen Gilbert2:07

    Yeah, listeners, we knew we were gonna have dinner. We were not sure whether we were gonna be able to record it, and now we get to share it with all of you. With that, join the Slack. There is awesome discussion of every episode and the news of the day at acquired.fm/slack. If you sign up for Acquired emails, you will get episode corrections and follow-up from previous episodes, plus hints at what the next episode will be. That's acquired.fm/email, and we have only one sponsor for this interview.

13. DRDavid Rosenthal2:34

    Yes, a special conversation deserves a special sponsorship, and longtime listeners will know there's only one company in the Acquired universe that is truly appropriate, because everything they do is modeled after Charlie and Warren, and that's Tiny.

14. BGBen Gilbert2:47

    Yep. Tiny is the Berkshire Hathaway of the internet. Literally, they are such huge fans that they started a company that makes bronze busts of Buffett and Munger themselves, but more on that in a minute.

15. DRDavid Rosenthal2:58

    Yeah. So Berkshire, as we know, started as a textile mill in Massachusetts nearly 200 years ago, and almost 20 years ago, Tiny founders Andrew Wilkinson and his partner Chris, took their version of an internet textile mill, the premier design agency Metalab, which designed the UIs for Slack, Uber, Tinder, Headspace, Coinbase, and others, and they asked themselves: What would Charlie and Warren do if they were us? And that led to the realization that just like Berkshire discovered in the physical world, the internet also has wonderful niche businesses with great cash flows. In fact, they tend to be even better than the old days of See's Candies and Blue Chip Stamps, because they require zero capital reinvestment, have software margins, and can build global brands much faster than the, what, 50-some odd years it took See's to expand around the world.

16. BGBen Gilbert3:48

    Yep. So Andrew and Chris took the extra cash flow from Metalab and their other businesses and created Tiny, the world's first and best permanent holding company for wonderful internet businesses, and boy, did it work.

17. DRDavid Rosenthal3:59

    Yeah. Fast-forward to today, and thanks to Tiny's success, this opportunity is no longer a secret. Many people have caught on to the idea that this can really work. But just like Berkshire itself, no one else has the combination of experience, temperament, access to capital, and frankly, reputation that Andrew and Chris have built over the past two decades. We're investors in Tiny ourselves, alongside Bill Ackman and Howard Marks, and just like the two of them, Tiny is really the long-term buyer of choice in their niche. Anyone who's looking for a permanent home for their profitable internet business or who needs a capital partner for a co-founder or VC cap table buyout would be lucky to work with Tiny.

18. BGBen Gilbert4:37

    Yep. For instance, they just bought the premier social network for film buffs, Letterboxd, which has been the founder's baby for 12 years and will stay so within Tiny. And this really reflects Tiny's whole ethos: Work with only the best internet businesses, commit to simple diligence, 30-day deals, and leave the business alone, either for you to operate or bring in new long-term-oriented management. Up to you.

19. DRDavid Rosenthal4:58

    So thanks to Tiny, this is the only sponsor, as Ben said, that you'll hear on this episode, and just like Berkshire, it'll be here in perpetuity. Tiny just became a public company earlier this year, and they can now do deals ranging anywhere from $1 million all the way up to $250 million. So if you wanna get in touch, just shoot them a note at hi@tiny.com and just tell them that Ben and David sent you.

20. BGBen Gilbert5:20

    Oh, and one more thing: the bronze Charlie busts, the perfect daily reminder in your workspace to ask, "What would Charlie do?" Just head on over to berkshirenerds.store to buy your own, and they also have plenty of some guy named Warren, too. Okay, now, without further ado, this is not investment advice. David and I may have investments in the companies we discuss, and this show is for informational and entertainment purposes only, and on to Charlie Munger. Charlie, I was watching the NFL games last weekend, and it seems like every advertisement now is a sports betting advertisement. Is this good for America?

21. CMCharlie Munger5:55

    No, of course not.

22. BGBen Gilbert5:56

    [laughing]

23. CMCharlie Munger5:58

    Are the dog tracks and race tracks of America and the casinos good for America? Of course not.

24. BGBen Gilbert6:04

    [laughing]

25. CMCharlie Munger6:05

    They're just very popular.

26. DRDavid Rosenthal6:07

    But that's how Warren got his start, though, right? At the racetrack.

27. CMCharlie Munger6:09

    ... Well, but Warren never gambled heavily as a patron of a- Warren wanted the odds in his favor, not somebody else.

28. BGBen Gilbert6:16

    Right.

29. CMCharlie Munger6:17

    It's just so simple if you're Warren. You want the house, you wanna be the house, not the punter.

30. BGBen Gilbert6:23

    Listeners, the next topic that came up was retail stock trading, and the idea that for many Americans, this is akin to gambling.

Episode duration: 1:06:54