Munger's Unpopular Contrarian Ideas | Generated by AI
Question: What are unpopular ideas from Charles Munger?
Answer:
Charles Munger, the late vice chairman of Berkshire Hathaway and a renowned investor, was known for his contrarian thinking and blunt opinions that often challenged popular views. Here are some of his most notable unpopular or controversial ideas:
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Strong opposition to cryptocurrency: Munger repeatedly called Bitcoin “rat poison squared,” “disgusting and contrary to the interests of civilization,” and “noxious poison.” He praised China’s ban on crypto as wiser than the U.S. approach, arguing it enabled crime like kidnapping and extortion, had no intrinsic value, and was essentially gambling. He wished it had never been invented and predicted it would go to zero.
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Criticism of excessive diversification in investing: Contrary to the widespread advice to broadly diversify portfolios, Munger advocated concentrated investing in a few high-quality opportunities when confident, viewing over-diversification as unnecessary for skilled investors.
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Skepticism toward modern academic economics: Munger frequently mocked economists and economic theories, arguing the field ignored real-world complexities, second- and third-order consequences, and insights from other disciplines like psychology. He believed it oversimplified problems and produced fragile models.
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Admiration for certain aspects of China’s economic policies: Despite preferring U.S. conditions overall, Munger said China was “wiser” in handling economic booms by intervening early (e.g., cracking down on bubbles or figures like Jack Ma) rather than waiting for busts, contrasting with U.S. tolerance of excesses.
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Avoidance of certain “sin” businesses on moral grounds: While Berkshire invested in companies selling tobacco or alcohol indirectly, Munger and Warren Buffett refused direct ownership of producers like chewing tobacco companies, viewing them as morally problematic despite profitability.
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Embracing temporary unpopularity for better decisions: Munger often said to acquire wisdom and adjust behavior accordingly, even if it causes “temporary unpopularity with your peer group—then to hell with them.” He encouraged contrarian thinking over following the crowd.
These views stemmed from Munger’s emphasis on multidisciplinary thinking, rationality, and long-term consequences, often making him outspoken against trendy or speculative ideas.
References:
- https://www.benzinga.com/general/entertainment/24/04/38457934/charlie-munger-was-known-to-always-speak-his-mind-these-were-his-5-most-controversial-takes
- https://www.investopedia.com/why-charlie-munger-hated-crypto-11758832
- https://fortune.com/2021/12/03/charlie-munger-criticizes-crypto-china/
- https://pictureperfectportfolios.com/charlie-mungers-philosophy-on-diversification-in-investing/
- https://fs.blog/great-talks/academic-economics-charlie-munger/
- https://www.cnn.com/2021/11/03/business/munger-china-economy/index.html
- https://acquirersmultiple.com/2018/11/charlie-munger-moral-investing-we-could-see-it-was-like-putting-100-million-in-a-bushel-basket-and-setting-it-on-fire-as-we-walked-away/
- https://www.goodreads.com/author/quotes/236437.Charles_T_Munger