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Feb. 15, 2020, 3:36 p.m. EST

Berkshire Hathaway’s Charlie Munger warns of ‘wretched excess,’ says Tesla’s Elon Musk ‘may overestimate himself’

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By Shawn Langlois, MarketWatch


Getty Images
Warren Buffett and Berkshire-Hathaway partner Charlie Munger

‘I think there are lots of troubles coming... There’s too much wretched excess.’

That’s Charlie Munger, vice chairman of Berkshire Hathaway /zigman2/quotes/208872451/composite BRK.A +2.24%  , sharing his thoughts on the current climate at the Daily Journal annual shareholder meeting on Wednesday.

Munger, who serves as chairman for the Daily Journal along with his Berkshire role, cited the increasing use of EBITDA — earnings before interest, taxes, depreciation and amortization — as an example of that excess.

“I don’t like when investment bankers talk about EBITDA, which I call ‘bulls**t earnings,’” Munger, 96 years old, explained. “It’s ridiculous. Think of the basic intellectual dishonesty that comes when you start talking about adjusted EBITDA. You’re almost announcing you’re a flake.”

Munger was also asked about Tesla /zigman2/quotes/203558040/composite TSLA -2.48% and had some interesting, if unsurprising, things to say regarding the stock’s recent surge.

“I think Elon Musk is peculiar and he may overestimate himself, but he may not be wrong all the time... Tesla sales went up because Elon has convinced people he can cure cancer,” he said. “I would never buy it, and I would never sell it short.”

Tesla shares rebounded nicely from early declines on Thursday, after the company announced plans to offer about $2 billion of common stock in an underwritten deal. At last check, the stock was up almost 3%.

Furthermore, Munger called out investors in China for how they play the game.

“They love to gamble in stocks. This is really stupid,” he said. “It’s hard to imagine anything dumber than the way the Chinese hold stocks.”

Watch his full presentation, courtesy of CNBC:

Munger, with an estimated net worth of about $2 billion, has long been a business partner of Warren Buffett. The two first met more than 60 years ago.

As for trouble ahead, the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.17% was down more than 200 points in Thursday trading while the S&P 500 /zigman2/quotes/210599714/realtime SPX +0.06% and Nasdaq Composite /zigman2/quotes/210598365/realtime COMP -0.87% also fell.

/zigman2/quotes/208872451/composite
US : U.S.: NYSE
$ 314,334
+6,879 +2.24%
Volume: 444.00
Aug. 7, 2020 4:01p
P/E Ratio
52.54
Dividend Yield
N/A
Market Cap
$509.12 billion
Rev. per Employee
$637,113
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/zigman2/quotes/203558040/composite
US : U.S.: Nasdaq
$ 1,452.71
-36.87 -2.48%
Volume: 8.90M
Aug. 7, 2020 4:00p
P/E Ratio
756.03
Dividend Yield
N/A
Market Cap
$270.73 billion
Rev. per Employee
$439,627
loading...
/zigman2/quotes/210598065/realtime
US : Dow Jones Global
27,433.48
+46.50 +0.17%
Volume: 324.93M
Aug. 7, 2020 5:10p
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
3,351.28
+2.12 +0.06%
Volume: 2.28B
Aug. 7, 2020 5:10p
loading...
/zigman2/quotes/210598365/realtime
US : U.S.: Nasdaq
11,010.98
-97.09 -0.87%
Volume: 3.85M
Aug. 7, 2020 5:16p
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Shawn Langlois is an editor and writer for MarketWatch in Los Angeles. Follow him on Twitter @slangwise.

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