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TAKING STOCK: Charlie Munger, the Magnificent 7, and What Lies Ahead By Evan Anderson _____ Why Read: This week's issue takes a look at the Magnificent 7 tech companies and their stock values through the lens of the late Charlie Munger. The Berkshire Hathaway great may seem an odd pick for the topic of tech investment, but the December Fed minutes and other factors appear to be pushing us into "greed" territory. An excellent time to reevaluate investing choices with a conservative eye. _____ You will be much more in control if you realize how much you are not in control. - Benjamin Graham Acquire worldly wisdom and adjust your behavior accordingly. If your new behavior gives you a little temporary unpopularity with your peer group . . . then to hell with them. - Charlie Munger
For the bookworms among us, each holiday-season break presents an opportunity to catch up on whatever tomes we've been carefully (or not so carefully) stacking by our bedsides during more hectic months. This year, after the passing of Berkshire Hathaway visionary Charlie Munger, I picked up the latest edition of Poor Charlie's Almanac. The book - an amalgam of stories, quotes, and speeches from and about Charlie, his life, and his life philosophies) - is entertaining, to say the least. The no-nonsense, carefully considered buy-and-hold strategy of Munger and Warren Buffet is famous for the two men's dry wit as much as for their investment returns. But the funny, curmudgeonly quotes, like the one above, also serve as a strong reminder of how much the philosophy on investing at Berkshire rhymes with the philosophy of SNS on business and global economics in general. Meanwhile, as global uncertainty from war, pandemic, and climate change wears on, we have completed another dance around the sun with a hard-to-predict set of market factors affecting our innovation economy. As a technology-focused publication, we are always trying to understand what you, our readers, need to know about the coming year as well as to make accurate predictions to serve those needs. This always ranges from personal to business, and the two are deeply intertwined. Being able to accurately predict global economic dynamics can serve you in your own investment portfolio as much as at your corporate corner office. (Mark Anderson's annual predictions, which he will release on January 24 in a free webinar open to SNS members and a few other select groups, will include his traditional guidance and things to watch out for in 2024. Register here; see details in "Upcoming Events.") What better way to kick off our New Year in the Global Report than to mix these two philosophies and focus areas together, in classic Munger style? To take a look at the world of tech equities for the past and coming year through the prism of a man who (mostly) didn't invest in technology? In a 1994 speech, Munger noted, conservatively: "Warren and I don't feel like we have any great advantage in the high-tech sector." It may sound funny, but at a time when the market is roaring and greed is high, in many ways it makes all the sense in the world to view it through a slow, disciplined, value-investing lens-. First, let's take a look at some marginalia from my reading of the Almanac.
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