Charlie Munger Once Mocked Jim Cramer For 'Pretending' To 'Know Everything' Then Explained Why Doing Less Made Him Billions

Speaking at the Daily Journal Annual Meeting in 2019, Charlie Munger, the late vice-chairman of Berkshire Hathaway Inc and Warren Buffett's longtime partner, stated in clear terms why their investment track record outperformed the rest. During his remarks, in his trademark humorous manner, he took a jibe at CNBC's Jim Cramer.

What Happened: Munger credited Berkshire Hathaway's success to doing less, not more. "We never had the illusion we could just hire a bunch of bright young people and they would know more than anybody about canned soup and aerospace and utilities," he said. "We never thought we could get really useful information on all subjects — like Jim Cramer tends to pretend to have."

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Instead, Munger and Buffett stuck with a few key investments. "If we worked very hard, we could find a few things where we were right. And the few things were enough."

He shared that he bought Berkshire Hathaway stock in 1966 and made his first investment in Costco in 1997, holding onto both positions with minimal selling over the years.

"I don't like even looking for exits. I'm looking for holds," he said, adding "I practically never have a transaction. And the answer is: I'm right, and they're wrong."

Why It Matters: For Munger, the winning strategy was realism, not hype. "My advice for a seeker of compound interest that works ideally is to reduce your expectations," he said, warning that future returns could be far lower than the historic 7% real gains from stocks. "It could well be three percent or two percent in real terms… and if that happens, I can have a happy life."

He urged investors not to chase unrealistic returns. "If it gets you 6% for a lifetime of work instead of five, you should be cheerful about it. You want to hit it out of the park easily — you should talk to Jim Cramer."

While Cramer has never publicly acknowledged Munger's taunts, in 2022, he said that Buffett and Munger were "out of touch" when it came to cryptocurrency, referring to their famous distaste for it.

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