As their idol sat on stage in a conference room adjacent to Los Angeles’ landmark Cathedral of Our Lady of the Angels, the investors who had flown in from all over the U.S. to hear the gospel according to Charlie Munger found that he had little good news to offer them.
Munger is most famous as Warren Buffett’s right-hand man at the sprawling investment conglomerate Berkshire Hathaway, but on Wednesday, the 96-year-old was conducting annual shareholder business on behalf of California legal news provider the Daily Journal, of which he is the chairman.
Known for his pithy one liners, Munger was exacting about the future of the news business, including the prospects for his own company and for the scores of titles that Berkshire is offloading. That deal — where Lee Enterprises is paying $140 million for all of Berkshire’s newspapers, including Buffett’s hometown title the Omaha World Herald — is a rare example of the two men selling one of their businesses.
It’s not a good thing in America that we lose Newsweek, Time magazine and all our daily newspapers and get back Rush Limbaugh
Charlie Munger, vice chairman of Berkshire Hathaway
“Technological change is destroying daily newspapers in America including the little ones like ours,” Mr Munger told Daily Journal investors. “The revenue goes away and the expenses remain and they’re all dying. Berkshire owns about 100 of them and it doesn’t matter because they’re all going to die. There’s nothing that can be done.”
National U.S. newspapers such as The New York Times and The Wall Street Journal would survive, he predicted, but smaller publications would not share the same fate. He warned Daily Journal shareholders that they, too, were “in for a long difficult ride” even as the company attempts to shift its business.
The observations came with a historical perspective.
“It’s a sad thing because those newspapers were an accidental part of the government: they called them the fourth estate . . . It’s not a good thing in America that we lose Newsweek, Time magazine and all our daily newspapers and get back Rush Limbaugh,” he said, referring to the conservative talk-radio host recently honoured by President Donald Trump.
“Think how different television is, [Walter] Cronkite is gone. We have all these clowns on the opinion service lying to us . . . and they’re really good at it,” he added. “The ability to mislead people is greatly underestimated.”
Munger uses a wheelchair these days and turned 96 at the beginning of the year, but took questions from shareholders over the course of two hours.
He railed against the private equity and venture capital industries as well as what he saw as “wretched excesses” in the world. In response to a question on the electric car maker Tesla, Munger said he would neither buy nor short the stock. Elon Musk, the carmaker’s founder, may be “peculiar”, he said, “but he may not be wrong all the time.”
Some attendees, including several students, wanted to know what life advice Munger would impart to them.
“This modern world is radically different and I’m not sure if I were starting out in your world how well I would do,” he said. “It would be a lot harder than it was to get ahead in the world the way it was when I came up. My best advice, I think you would be happier if you reduced your expectations.”
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