A Quote by Charlie Munger
Where you have complexity, by nature you can have fraud and mistakes. You'll have more of that than in a company that shovels sand from a river and sells it. This will always be true of financial companies, including ones run by governments. If you want accurate numbers from financial companies, you're in the wrong world.
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Trust-me companies are companies whose financial results gallop ahead of their businesses, companies with seemingly perfect control over their quarterly sales and profits. Companies whose financial statements are loaded with footnotes: companies that short-sellers often attack but rarely dent.
The industry financial advisers, on average about 85% male, tends to be a more mature financial adviser - so I think in their 50s, really. For so many companies, in their 60s. In fact, there is one company that was telling me they had more financial advisers over the age of 80 than under the age of 30.
Forgive me, I must start by pointing out that three years after our horrific financial crisis caused by financial fraud, not a single financial executive has gone to jail, and that's wrong.
The only thing I have no control over is the politics that goes on within the record company. It's always been the same, but it's far tougher now, because record companies are run by financial people; before, they were run by creative people.
The heart of the 2008 financial crisis was a coterie of reckless financial executives, working for too-big-to-fail financial companies, who were handsomely compensated for taking risks that almost ruined the economy when they failed.
Many financial and industrial companies have been bailed out with the public's money, but very few of those who had run those companies have been punished for their failures. Yes, the top managers of those companies have lost their jobs - but with a fat pension and mostly with a handsome severance payment.
We have full disclosure in transparency of our audited, our financial audits. It's on our Web site. It is, I think 16 or 20- something pages, which most public companies or private companies and most ministries don't disclose. So we have always operated with financial integrity and full transparency.
When private industry makes a mistake, it gets corrected and goes away. As governments make mistakes, it gets bigger, bigger and bigger and they make more, more and more because as they run out of money, they just ask for more and so they get rewarded for making mistakes. In the meantime that is exactly what we are doing by subsidizing companies which are failing, we have a reverse Darwinism, we've got survival of the unfittest, the companies and people that have made terrible mistakes are being rewarded and other people are being punished and being taxed.
Both companies have product ranges with world-class brands that complement each other perfectly. Our companies share a common culture and mission. By realizing synergies and with our combined financial and strategic strengths, we will be ideally positioned in tomorrow's marketplace.
A young financial writer once brought ridicule upon himself by stating that a certain company had nothing to commend it except excellent earnings. Well, there are companies whose earnings are excellent but whose stocks I would never recommend. In selecting investments, I attach prime importance to the men behind them. I'd rather buy brains and character than earnings. Earnings can be good one year and poor the next. But if you put your money into securities run by men combining conspicuous brains and unimpeachable character, the likelihood is that the financial results will prove satisfactory.
Apparently modern financial regulators are vastly more sophisticated than we were as financial regulators 25 years ago - because we had never figured out that the key to financial stability was leaving felons in charge of the largest financial institutions in the world.
The financial time frame always has been short-term. Projects with long-term paybacks are cut back, because CEOs and financial managers simply want to take their money and run. That is the financial mentality.
Companies want to innovate. Companies that don't innovate wither on the vine. The connection between STEM fields (science, technology, engineering, and mathematics) and the financial stability of a nation is what needs to established.
When we first started our internet company, 'China Pages', in 1995, and we were just making home pages for a lot of Chinese companies. We went to the big owners, the big companies, and they didn't want to do it. We go to state-owned companies, and they didn't want to do it. Only the small and medium companies really want to do it.
In Europe, we don't only take offence when one company is treating another company in a way that's illegal. We also look at if governments are joining up with companies that makes it more difficult for other companies. We also see that sometimes government actions can make it very difficult for businesses to compete on their merits.
Booksellers are tied to publishing - they need conventional publishing models to continue - but for those companies, that's not the case. Amazon is an infrastructure company; Apple sells hardware; Google is really an advertising company. You can't afford as a publisher to have those companies control your route to market.
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