Yeah, so the usual mo is, i come up with really good content and then find a title that would induce people to actually click on it. But this time i didn't have to do that, because charlie munger actually had an even worse title and for fear of censoring this video i had to dumb this title down to uh. Ah s-h-i world war ii disaster is coming now. Let's break this down a little bit because charlie wenger had some interesting things to say today, uh - and this was the daily journal annual meeting and i'm gon na get right into what some of the rough things were remember by the way, charlie munger is one who's Got some kind of uh reputation out there, obviously famous for his work at berkshire hathaway partner of warren buffett, elon musk decried that in 2009, charlie munger told him all the ways that tesla was going to fail and elon said he was probably right.

Tesla would probably fail, but he was going to try anyway. Obviously here we are 13 years later and uh tesla is one of the most phenomenal and valuable companies in the world. Then uh you've got other people who have some choice, things to say about charlie munger as well, especially since it was just last year that charlie munger, although many of us watching this might agree, complained that robin hood is basically a company that offers gambling services and That brokerages, like robin hood, are a quote dirty way to make money because they pry on people on wanting to trade and get rich quickly. Anyway, all right, let's get into this unusual situation that charlie munger describes charlie munger says we are facing an unusual situation of a lot of monetary stimulus that is a lot of fiscal money, printing or not fiscal money, federal reserve money printing, rather, which we've seen we've Seen the money printers essentially blow up our uh, our federal reserve's balance sheet to 8.9 trillion dollars.

This is the largest amount that we've ever had. It's quite incredible. In fact, if you want to see it, you could look at the st louis fred website and you can just look at the total assets that the federal reserve holds and look at this boom. Here i mean markets freaked out when we were at four and a half trillion dollars and we started running off the balance sheet in 2018 markets freaked out, and it wasn't until the federal reserve u-turned.

That market started getting a little bit more comfortable and they basically had to turn the money printer on again now. We know that this is digital money. Printing, we're not gon na, have a fight again about whether there's actually running the press. Okay, this is this.

We're beyond that at this point in this channel, but anyway this is pretty unprecedented. I mean we're at 8.9 trillion dollars on the balance sheet and obviously the federal reserve is talking about running this off again now, but charlie munger tells us that we we've actually seen this kind of money printing go well before and he kind of paints. This scenario, this sort of two-folded scenario for our future. He says well uh.

This kind of money printing has worked out before in places like japan, because you've been able to print money like crazy without seeing rampant or lasting and persistent inflation. Now nobody really likes comparing to japan because take a look at this folks. It took 30 years for the japanese stock market to get back to 1991 levels in 2021. So i don't know if the best analogy or hope for america is that hey, maybe we'll be like japan.

Maybe all this money, printing will just work out and things will be fine. I mean take a look at this. If you invested in 1991 and you just kept buying the dip and dollar cost averaging, you would have just kept losing and losing and losing money all the way through 2012, when the market finally started rotating back to the upside kind of. While japan has been a pretty interesting case, so it's quite interesting for charlie munger to talk about uh japan as hopefully we'll end up like japan.

Basically, in fact he says quote he hopes to god. Then, when we've printed the money that we have, we could end up without rampant inflation like japan. He also says that he certainly - and this is the other scenario - so one scenario is japan, okay, the other one's, not so great, the other one he says. Hopefully we will not go back to the 1970s again.

He says i would not predict that our modern politicians would be willing to permit a new paul volcker to get that tough on the economy and bring on that kind of recession. Now that sounds optimistic because it's like basically saying i don't think politically, it would be popular to have a paul, volcker, style character. To say we need to deal with inflation. We are going to raise rates as much as we need to to stamp out inflation, even if that brings on a volcker style recession like we don't you know, those are some of the bad memories of the 70s is how we got vulcared.

Basically, right - and those were some of the reasons why we actually saw the stock market go up today, because the federal reserve minutes were like okay, we got to be careful, we don't want to over tighten you know, we want to be careful and that gave the Markets optimism that we weren't going to get rug pulled like paul, volcker in the 70s, but then charlie monger goes on to say, however quote you may wish you had a volcker style recession. I don't know what you're going to get then he goes on to say he doesn't know exactly what's going to happen, obviously, but he says that we are quote flirting with some serious trouble. He says that some of our earlier fears were overblown, though - and this is referencing march of 2020, like when they dump the airlines at the bottom right things like this, but he does say. Ultimately, you might have to choose between the least bad options and remember the options he's giving right now he's giving a japan style a response to inflation, where markets are kind of meh for quite a while, and we don't see high inflation or persistent inflation.

It goes away and markets just trade sideways or even slightly down for quite a while uh. The other option is a volcker style recession which he doesn't think would be politically popular, but the problem is, he says that if we don't have a volcker style recession, this is what what he says. The market right now is quote like a bunch of people getting drunk at the party, and everyone is having so much fun that they don't think about the consequences. The excesses - and this is the comparison - the excess of the 1920s - gave us the great depression and the great depression gave us hitler and therefore world war ii.

So he's really drawing like these three kind of nasty scenarios. Here i don't really like these at all. Maybe charlie munger's just lost his mind or something like that uh. But you know this is a big big notable person here, he's basically saying number one uh, japan style, which is basically we end up with some kind of soft landing.

We maybe have a stagnant stock market and you get something known as lower liquidity. This was actually something that was very important that he talked about talked about having a lower liquidity stock market, which is good because he believes that means you'll have less excess in the stock market, and this is kind of, in my opinion, an allusion to the fact That all of a sudden, you could see shopify dropped, 20 percent or uh doordash go up 30 or upstart go up 30 percent, while you know uh something like facebook, plummets, 20 or fastly plummets. 20. You know like this.

This insane left and right of the stock market he thinks is just too much liquidity and it leads to too much speculation and excess. But anyway, he's kind of talking about maybe scenario. One is that japanese style soft landing scenario number two is a vulca style recession, which is where you have the fed act, very hawkishly, essentially and crimped down on the market leading to a recession which keep in mind. Recessions, aren't necessarily bad in the sense that they could stamp out inflation, but they do tend to lead to job loss and bankruptcies, which is not good and defaults right.

It can ruin people's lives. It's terrible recessions. Aren't that aren't good in that sense, they're good. In the sense that they can get rid of inflation, because people stop spending aggregate demand goes down right uh, so so this is obviously the best case scenario which there are some problems associated with monger's best case scenario, vulgar style, recession's, not good, but it's the less Bad option is number two compared to number three, which would be uh literally having potentially a great depression and then out of a great depression, potentially a world war which is i don't i don't know.

This just sounds just like a lot of fear-mongering to some degree. It's what charlie munger said, though, okay so just reporting what charlie munger said now he did have some other choice, things to say, especially about excess. He believes uh that there are substantial excesses in bitcoin. Obviously the bitcoin maxies are like.

We don't care about you anymore. Bunger you're dead to us that sounds terrible to say, but that's basically what the bitcoin community is saying to him, but he also - and this is an interesting one - points out - that there are a lot of excesses in venture capital and he's comparing the stock market today To the roaring 20s and warned that the stock market needs to relax, otherwise we are flirting with too much danger venture capital by the way. Remember private equity guess who thinks it's a good idea to go into private equity right now: kathy, wood, okay! This is this is, and i've talked about this in the kathy wood video. I don't understand when venture capital prices are high and stock prices have fallen like 50.

In many cases. Why do you want to invest here instead of here like if you're gon na pick? One, why are you going to the expensive one? I don't know that one blows my mind, but whatever i ain't cathy wood, so i can't tell you uh so then he also says that spax, like unfortunately matterport sofi excel fleet, all these the sparks of the world. Uh uh even open door to some degree, just all spacks. He says he believes, are wretched excesses, which matter reports down ten percent.

I don't think it's because of monger either then uh. It was actually because their eps miss was like. Oh my gosh. What happened? I still haven't quite figured out why their why their net came in so terribly low.

Their services went up nicely. Their product sales declined as expected. Their services and subscriptions were great. I just don't know what happened to the bottom line.

I think it had something to do with warrants, but i have not gone through it. Yet. I've had only about two minutes to look at their earnings and i quickly looked at their income statement so i'll have to you know tbd that one but anyway, another thing he mentioned is he says quote: inflation is really dangerous and can affect democracy. If you overdo it, you can ruin your civilization, so it's a long-range danger.

Now i kind of thought i don't know. This was like a throwback to playing like civilization, like civilization, 2 or like age of empires, but he literally just means that inflation is really bad, but one thing that he he did say - and i thought this was actually kind of a good good news thing. Is he thinks that an inflation danger is not something? That's really a short-term risk, it's more of a longer-term risk, so something that we could face kind of like japan over the next decade is trying to get rid of this inflation that things don't necessarily have to move very quickly. I disagree with him on that because i do think the fed is more likely to vulcarus than let inflation last because, even though politically it might not be popular to have a vulca, it's also very politically unpopular to have inflation crush people who have a lot of Student loan or credit card debt and consumer debt, especially poorer people.

This is something the federal reserve has already made right, really really clear. Then he does also talk about valuation measures. He says that old school evaluation measures and the way he does valuations are not dead. He says the best way to invest is getting more value than what you pay for that's what an investment is.

If you want to be successful, you have to get more value than you're paying for now that sounded a lot like wedge deals to me, which i teach you exactly how to get wedge deals in real estate in the real estate, investing course link down below use That coupon code link down below you get lifetime access to the program. So when i update content on real estate or my thoughts on what's going on real estate, the best way to get deals goes in there at no extra charge so check that out. You also get access to those course. Member live streams we do every day and that the market opens up.

We basically do the market open, live stream together. As a small group which is nice because then i can answer questions more but anyway he does talk a little bit about china. He didn't really provide reasons for investing in alibaba, but he thinks that china has been a good place to invest because they'd uh. He believes that he could get better deals on companies in china.

However, warren buffett is not as comfortable as he is with investing in china, and he does, though, believe that politically and just in general, it's massively stupid that china and the us have let tensions get so high between them, uh and that uh yeah. Let's see here and that's it so there you have it check out the program linked down below. Let me know which of the three scenarios you think charlie munger is right about. Can we possibly turn into japan without having that kind of crazy drop in a stock market for like two decades before recovering in the last decade? Hopefully, but anyway, let me know which of those scenarios, you think is most likely scenario number one again being the japanese scenario, uh of some kind of soft landing, but maybe a sideways trading stock market with reduced liquidity, vulcar style recession or a great depression.

What are we heading towards one, two or three? Let me know in the comments down below. Thank you so much for watching and folks until next time.