Charlie Munger is still alive and still dropping market truth bombs whenever he speaks.
At the Sohn conference in Sydney on Friday, The Australian Financial Review reports that the 97-year-old curmudgeon exclaimed that markets are wildly overvalued in places and that the current environment is “even crazier” than the dotcom boom of the late 1990s that subsequently led to a bust.
“I consider this era an even crazier era than the dotcom era,” he warned.
He is not wrong...
Investor demand for U.S. technology stocks amid the pandemic has taken the Nasdaq 100 to a relative record against the Dow Jones Industrial Average. The ratio between the two gauges has exceeded a peak set during the dot-com bubble.
On an absolute basis, US stocks have never been more expensive relative to sales...
...and never been more expensive relative to the nation's GDP...
Of course, it would not be Charlie Munger without his now ubiquitous rage against cryptocurrencies wishing they didn’t exist, and praised China for taking action to ban their use.
“I wish they’d never been invented,” he said.
“And again I admire the Chinese, I think they made the correct decision, which was to simply ban them. In my country, English-speaking civilization has made the wrong decision, I just can’t stand participating in these insane booms, one way or another.”
As Bloomberg reports, while the S&P has more than doubled since the pandemic lows of March last year, Bitcoin is up over 1000%. But, investors have poured almost $900 billion into equity funds in 2021 - exceeding the combined total from the past 19 years - according to data from Bank of America Corp. and EPFR Global.
Finally, it appears Munger missed the outcome of COP26 as he explained hos bullish he is on renewable energy:
“I love the fact that we’re rapidly reducing the burning of coal and the burning of gasoline and diesel,” he said.
“I think that’s a smart thing for the world to be doing and it would be smart even if there were no global warming.”
We will forgive the almost-centenarian for missing the facts on this one.