Skip to main content

Charlie Munger's Comments Raise Eyebrows

Charlie Munger took center stage recently to share his views and insights on the state of the global economy.
  • Author:
  • Publish date:

NEW YORK (TheStreet) -- Warren Buffett managed to earn a few headlines this week after Forbes reported that he earned the number two spot among the United States' richest individuals. Microsoft (MSFT) - Get Microsoft Corporation Report founder and friend, Bill Gates topped the list. Additionally he sat down with CNBC's, Becky Quick and once again explained that, while he feels that we remain in a recession, he expects things will get better for the nation in the coming future.

While Buffett was certainly in the news, the famous financier's second in command generated far more press this week as market commentators dug into some of the more controversial comments that came from his speech at the University of Michigan that took place earlier in the month.

Although he is often seen playing second fiddle to Buffett, fellow Omaha Nebraska native, chairman of

Wesco Financial

(WSC) - Get WillScot Mobile Mini Holdings Corp. Class A Report


Berkshire Hathaway

(BRK.A) - Get Berkshire Hathaway Inc. Class A Report


Charlie Munger

took center stage recently to share his views and insights on the state of the global economy. As I highlighted last week, his views of the recovery are far less bullish than his business partner's. While the Oracle of Omaha continues to sing the nation's praises, insisting that the U.S. is not in any way threatened by a double-dip recession, Munger has been far less optimistic in his forecasts, claiming that the job market is still "lousy" and that even more pain lies ahead.

His outlook for the U.S. economy however, is not the only utterance to come out of the 86-year-old's mouth which has managed to raise eyebrows. Rather, the newswires and blogs have been on fire recently, bringing to light a number of his other controversial comments.

>>>Charlie Munger Stocks for 2010

Speaking on philanthropy, Munger explained that he felt private investment is more beneficial than charity. "I believe that


(COST) - Get Costco Wholesale Corporation Report

TheStreet Recommends

does more for civilization than the Rockefeller Foundation." This appears to directly contrast the views of Buffett, who has not only pledged to give away the entirety of his wealth, but has taken to the streets with "the giving pledge," an effort aimed at getting fellow billionaires to follow his charitable lead. In coming days, Buffett will head to China in hopes of promoting charitable actions overseas.

Munger also received a lot of flack for his comments regarding the 2008 financial industry bailout.

In his speech, Munger said that people should, "thank God" for the bank bailouts. He went on to say that the Washington efforts were required to save the U.S. and prevented the nation from facing a situation similar to the one Germany was forced to deal with after World War 1.

When one questioner asked if Washington should have bailed out homeowners instead of banks, Munger did not sugar coat his answer. To the group he explained that the government cannot just bail out everyone. He went on to say that, at some point the government has to say, "suck it in and cope."

Munger's views of the bailout reflect those of Warren Buffett. Buffett has long been a proponent of Washington's decision to save the financial industry, saying that, while controversial, they were ultimately the right thing to do. Considering the stakes Berkshire Hathaway had in Wall Street giants such as

Goldman Sachs

(GS) - Get Goldman Sachs Group, Inc. Report


Wells Fargo

(WFC) - Get Wells Fargo & Company Report

at the time, it is not surprising that this opinion has been met with a substantial amount of controversy.

Munger obviously has strong views on these issues and is not one to pull punches. How did Munger's comments sit with you? Do you feel that they were too extreme? Feel free to comment in the space below.

Readers Also Like:

>>5 Best Fast-Growth Stocks to Buy

Don Dion is president and founder of

Dion Money Management

, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Mass., Dion Money Management manages assets for clients in 49 states and 11 countries. Dion is a licensed attorney in Massachusetts and Maine and has more than 25 years' experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management.

Dion also is publisher of the Fidelity Independent Adviser family of newsletters, which provides to a broad range of investors his commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With more than 100,000 subscribers in the U.S. and 29 other countries, Fidelity Independent Adviser publishes six monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers.