Charlie Munger bemoaned not investing in Amazon early, and wished he bet bigger on Apple.
Warren Buffett’s late sidekick, who passed on Tesla, said Elon Musk is talented but takes big risks.
If Buffett and Munger invested $50 billion in Apple, they would have a $280 billion stake today.
The late Charlie Munger regretted not backing Amazon or buying more Apple stock, and viewed Elon Musk as exceptional but too risk-loving for his liking.
Warren Buffett’s longtime business partner and Berkshire Hathaway’s vice chairman, who died aged 99 last week, voiced those comments in a September interview with The Wall Street Journal’s Gregory Zuckerman.
Zuckerman, author of books about elite investors including John Paulson and Jim Simons, shared some highlights from their conversation in a recent article.
Munger said he was a fan of Amazon’s founder, Jeff Bezos, but failed to invest in the e-commerce titan early on. That’s not surprising given he prized predictability, profitability, and a good price, none of which Amazon offered for a long time. Buffett has even joked that if Bezos stopped in his hometown of Omaha on his way from New York to Seattle to start Amazon, he would have said, “Good luck, Jeff.”
Buffett’s late right-hand man also bemoaned not taking a larger stake in Apple. That’s striking as Berkshire poured a massive $30 billion into the iPhone maker between 2016 and 2018, and its position has ballooned in value to $156 billion today — nearly half of its $318 billion stock portfolio as of September 30. Indeed, the conglomerate’s Apple stake is worth about as much as its entire pile of cash and liquid assets, which totaled $157 billion at the end of last quarter.
If Berkshire had plowed $50 billion into Apple at an average price of $34 (about the price it paid for its existing stake), and never sold a share, its position would be worth roughly $280 billion today, all other things being equal. In that scenario, its holdings of a single stock would be worth more than Adobe, Chevron, or Costco, which each have market capitalizations between $265 billion and $275 billion.
Munger was far less bothered by the fact he passed on Tesla early on. He had the chance to buy in at roughly a $200 million valuation in 2008, or less than 0.1% of the electric-vehicle maker’s market cap today, Elon Musk has said.
The legendary investor told Zuckerman that Musk was an “extreme talent” but the opposite of cautious or conservative.
“I would go crazy if I took the risks he did,” Munger said. He made a similar point during Berkshire’s annual meeting in May, when he said that Musk tries to achieve the impossible, whereas he and Buffett looked for easy things to do.
“We don’t want that much failure,” Munger said at the time. Buffett echoed that point, saying that tackling brutal challenges “would be torturous to me or Charlie.”
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