Taking this quote out of context is impressively dishonest. It would be incredibly inaccurate to describe Elon's history of winning big as "occasional", and for that same reason it would be incredibly surprising if Charlie Munger described Elon's career this way with no qualifiers.

Not surprisingly, he didn't. This quote is the end of a much more nuanced statement to conclude the point that he generally prefers to invest in operators who take less risk.

Regardless of your opinion on Elon, this sort of manipulation of reality damages the discourse. It's not helping anyone.

The quote speaks for itself. Please do not stoop to ad hominems.

We can listen to the quote here, and it's not about Elon at all.

https://www.youtube.com/watch?v=X1Oi3esiry8&feature=youtu.be...

And to me, he is only attributing a quote to Elon, nothing else, but the audience takes it a different way. Regardless the quote above is not about Elon.

A guy who consistently founds or joins successful companies is not someone I would call “who happen occasionally to win big”. He founded Zip2 that was acquired by AltaVista, he joined PayPal that was acquired by eBay, he joined Tesla, he founded SpaceX. His record is stellar.

Of course it is understandable that Berkshire Hathaway wouldn’t hire anyone like Musk. They are as far from tech and VC as any investor could ever be. I admire Buffet and Munger, but the guys are 90 years old, I honestly couldn’t care less what they think about IT industry.

> I admire Buffet and Munger, but the guys are 90 years old,

Well, then you need to tell me your age, to know whether I should care about what you have written above.

Not OP, but mid 30s and I’m getting a bit tired of folks who are out of touch because of their age believing their past experience can extrapolate a future they don’t understand (Buffett in particular has done a very poor job understanding and investing in tech).

It’s terribly ironic that they think Musk is just lucky considering Munger and Buffett were able to invest during one of the most prosperous times in American history.

Admit you’re passed your prime and move on. Make way for innovators instead of valuing reading a 10-K and preferring conservative companies you believe are undervalued, or distressed companies you’re going to try to twist their arm into a deal (as Buffett did during the GFC with banks).

Your comment and OP's comment are a bit silly given the context. Munger didn't say anything controversial here. He was asked a question about Elon and answered by saying he prefers less risk. He specifically pointed out that Elon shouldn't be underestimated while saying it.

Elon doesn't just like to take risks, he would probably agree with being described as "risk obsessed". If your investment strategy is risk aversion and stability, you should avoid Elon. That isn't an outdated perspective, nor is it arrogant in any way - Elon would probably agree with it. The last sentence was an exaggeration of his bias when evaluating any operator to drive his point home clearly.

It's fairly difficult to imagine that Charlie Munger thinks Elon Musk has just gotten lucky for his entire career, and unsurprisingly he isn't saying that in this example. I'm all for fairly criticizing out-of-touch arrogance, but I can't see it being the case here.

"Admit you’re passed your prime and move on." sounds like something a junior programmer would say before suggesting something hip but incredibly stupid.

Like reimplementing a distributed multithreaded C++ processing cluster in NodeJS to make the codebase more accessible.

Or like those fashionable people that try to replace a grep shell script with a multi-node ElasticSearch cluster in the cloud, at only 100x the operating costs.

The knowledge that novel does not equal unquestionably good ages extremely well. The "innovator" of today may well be a "debunked hype" by tomorrow.

I'm mid-30s and I'm equally tired of people without a whole lot of experience assuming they understand more about the world than they do.

We'll have to see how many tech companies survive the coming depression before we can determine whether the long game at Berkshire is wrong or not :)

Indeed, we'll see if Tesla survives, not only the coincidental depression, but also the multi-hundred-billion-dollar war chest being leveraged against them by the other car companies with a century more experience each, more connections, and broader reach.

It's a bit early to be calling the game is all.

Well said. I'm a huge fan of Elon and Tesla and am optimistic about their future, but Munger's approach here is incredibly reasonable. I would love to see Tesla succeed, but I also know that I'd hesitate quite a bit to bet billions of dollars on their success.

I recently listened to a podcast and it had an interesting thought that has kept me wondering.

https://en.wikipedia.org/wiki/Wikipedia:Chesterton%27s_fence

(this page seems a little more biased than I remember in favor of a conservative viewpoint)

I wonder if in 6 months opening a business quickly will seem prescient, or will it have been a disaster?

What I actually think Musk should do is do what he's done well before, "science the shit out of it". Figure out how to move forward without killing someone (in a rocket accident or a covid accident)

> believing their past experience can extrapolate a future they don’t understand

Imagine thinking anyone knows what will happen in the future.

I think that’s the point of having a brain at all — to predict the future better than a dice roll would’ve.

I wouldn't call guessing with slightly better odds than a coin flip "extrapolating the future".

Do continue ignoring all the massive failures and continuous capital / opportunity these supposed kingmakers have.

If two chess players of equal skill play a match, the result is a coin flip. That doesn’t mean they don’t know what they’re doing.

With one exception that I know of, share prices are the average over all estimates of future earnings.

The exception is: When investors just follow the leader instead of producing their own price estimates, you get bubbles.

> If two chess players of equal skill play a match, the result is a coin flip. That doesn’t mean they don’t know what they’re doing.

No, but it does mean they aren't any more skilled than anyone else on the same level. They surely cannot know what will happen next any better.

Warren Buffett's stance on technology companies has historically been that he doesn't understand them, and thus he doesn't invest in them. Where are you getting this idea that he thinks he knows them better than other people?

> successful companies

How's the Boring Company? Hyperloop? Funny thing is ~all of his companies involve heavy government subsidies.

The PayPal board fired him as CEO because the engineering department was mutinying against him. You forgot that part.

And from the same article

"is bold and brilliant, and he swings for the fences."

and ...

"People like that get some remarkable results,” Munger continued. “Sometimes they get some quick failures. I haven’t the faintest idea how Elon Musk will turn out, but he has a considerable chance of success and considerable chance of failure. He seems to like it that way."

> but he has a considerable chance of success...

Wait a second, by all measures this billionaire is _already_ successful, no? How could anyone claim the contrary?

Money on that scale is of a very different character to money as normal people understand it.

It’s more like being a medieval king: to the extent that you’re the shareholder, your wealth is the “nation’s” wealth; your guards are paid for out of your pocket; and you can be drawn into conflicts that lead to you losing everything.

It’s that latter part that I’d be worried about with Musk. He took a very big gamble with SpaceX, and if one more launch had failed in the early years, he would’ve become a mere footnote on someone else’s Wikipedia page. The concern is he might make similar gambles in future.

Depending on how it ends.

Will he be reduced to a mad man shouting on twitter, with nothing left to his name but failed enterprises?

Or will he carve the moon in his image?

The success he's referring to could be the success of Elon's vision, rather than Elon himself.

This is the same Charlie Munger who backed airline stocks when everyone else was dumping them, outside only to finally realize how terrible they were far too late and finally dump them weeks after the rest of the market did.

His opinion is absolutely valid, but it’s not like his track record is any more exceptional than Musk’s.

> It’s not like his track record is any more exceptional than Musk’s.

Everyone makes mistakes, but to conclude that Berkshire Hathaways' track record is "not ... more exceptional than Musk's" is beyond folly. Their success over decades is unparalleled.

Furthermore, Berkshire on principle plays the long game. They rarely act on short-term events.

Tesla was also badly affected by the Covid-19 measures. The Fremont plant is still closed. You would have expected Munger to dump airlines sooner; but would you also have expected Musk to dump his TSLA stock, too?

For some people, being an investor means looking at a time horizon of decades, not months.

> a bunch of guys who are living in a state of delusion

Sounds like the politicians and assorted apparatchiks who still think, or claim to think, that this virus is orders of magnitude worse than it actually is.