2022: What's Munger's current opinion on China?
BECKY QUICK: This question comes from Steve Blackmore in Bozeman, Montana. This is to Charlie. He says, “In the past you’ve made favorable statements about investing in China, in part based upon valuation metrics. What is your opinion now, and how much weight do you put on the actions of the government in your analysis?”
BECKY QUICK: “Do the recent communist party activities in China, including human rights violations, blatant cyber theft from U.S. companies and others, crackdowns on speech from business and media, et cetera, cause you to change your opinion on investing in China? And how do you evaluate the clear dangers of investing under authoritarian regimes, as recently evidenced by Russian atrocities in Ukraine?”
CHARLIE MUNGER: Well, those are good questions, and there’s no question about the fact that the government of China has worried the investors from the United States who invest in China. More in recent months and years than they did in the earlier periods. So there’s been some tension.
And it’s affected the prices of some of the Chinese stocks, particularly internet stocks. Just in the last day or two, the Chinese leader has sort of reversed course on that, and said he went too far and he’s going to pull way back and so on and so on. So we’re having some hopeful signs.
But yes, there are more difficulties investing in, I mean, dealing with a regime in China than there are in the United States. And it’s different. It’s a long way away, and they’ve got their own culture and their own loyalties and so on and so on.
And the reason that I invested in China is I could get so much better companies at so much lower prices, and I was willing to take a little bit of a risk to get into the better companies at the lower prices. Other people might reach the opposite conclusion. And everybody is more worried about China now than they were two or three years ago. So that’s just the way it is.
WARREN BUFFETT: I have nothing to add. (Laughter) (Applause)