According to Charlie Munger, many public companies are now significantly overvalued, and the madness in the markets is greater than during the Internet bubble. A longtime associate of Warren Buffett also stated that he would prefer cryptocurrencies not exist, adding that he admires the Chinese who simply banned them.
“I find this era even crazier than the dot-com era,” the 97-year-old said at Friday’s conference in Sydney. “Some of the valuations we saw during the Internet bubble were higher, but overall I think the situation is even crazier now than during that boom that ended with the bursting of the bubble in 2000,” said Munger, quoted by The Australian Financial Review.
For many companies listed on Wall Street, the P / E ratio is above 35, which the billionaire believes makes it increasingly difficult to achieve good investment results. In recent years, Berkshire Hathaway, of which Munger is vice president, has been investing money in the market very carefully, amassing huge amounts of cash. Meanwhile, the S & P500 has already doubled in value from the pandemic low.
Munger also spoke critically about cryptocurrencies once again. In his opinion, they should never be created. “I admire the Chinese, I think they made the right decision by simply banning them,” he said. In turn, the US makes the mistake of not doing the same, the billionaire believes. “I can’t stand participating in these crazy booms,” he stressed. “I want to earn money by selling people what is good for them, not what is bad for them,” he added. In his opinion, cryptocurrency providers “think only of themselves,” quotes The Australian Financial Review.
The billionaire also spoke about the energy transformation. “I like the fact that we are rapidly reducing the combustion of coal and gasoline and diesel,” he said. “I think it’s wise and it would be wise even in the absence of global warming,” said Munger.