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Charlie Munger praises China, laments dying newspapers, won't buy or short Tesla

Published 02/12/2020, 03:30 PM
© Reuters.  Charlie Munger praises China, laments dying newspapers, won't buy or short Tesla
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By Jonathan Stempel

(Reuters) - Charlie Munger, the longtime business partner of Warren Buffett, on Wednesday said Chinese companies are stronger than American companies, lamented a "dying" newspaper industry, and offered passing praise for Tesla Inc's (O:TSLA) Elon Musk though he would never invest in his company.

Munger, 96, spoke at the annual meeting of Daily Journal Corp (O:DJCO), the Los Angeles newspaper publishing company he chairs.

He remains better known for having since 1978 been a vice chairman at Buffett's Berkshire Hathaway Inc (N:BRKa).

Munger showed no sign of wavering in his longstanding admiration for China and its economy, even as officials combat the coronavirus outbreak whose epicenter is in that country's Hubei province.

"The strongest companies are not in America," he said. "The Chinese companies are stronger than ours, and are growing faster."

Munger also appeared to admonish both countries' leaders to work out their economic differences.

"The United States ought to get along with China, and China ought to get along with the United States," he said.

Wednesday's meeting was webcast by CNBC.

Munger spoke two weeks after Berkshire threw in the towel on its newspaper empire, agreeing to sell 80 daily and weekly papers including its hometown Omaha World-Herald in Nebraska to Lee Enterprises Inc (N:LEE) for $140 million.

He echoed Buffett's sentiment that only a few newspapers, such as the New York Times and Wall Street Journal, may survive the shakeout as the Internet and changing reader preferences cause advertising revenue to plummet.

"What's happened is that technological change is destroying daily newspapers in America," Munger said. "They're all dying."

That's not how many investors feel about Tesla, Musk's electric car company, whose share price has more than quadrupled since June, punishing short-sellers betting it would fall.

"I would never buy it, and I would never sell short," Munger said, prompting laughter.

"Elon Musk is peculiar," he added. "He may overestimate himself, but he may not be wrong all the time."

Munger is Berkshire's chief supporter of that company's investment in Chinese electric car company BYD Co (SZ:002594), which began in 2008.

With U.S. stocks at record highs, Munger also cautioned investment managers to "prepare for tougher times ahead," echoed the billionaire Buffett's recommendation that many investors are better off in index funds.

"There are wretched excesses in a lot of well-paid hedge fund and private equity businesses," Munger said.

Munger also made many several references to his age, but offered no explanation of how he got there.

"I don't think I deserve any credit for longevity," he said. "It just happened."

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