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XMFSinchiruna (28.52)

Take it Back, Mr. Munger

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September 29, 2010 – Comments (11) | RELATED TICKERS: BRK-B , CEF , BHP

An Open Letter to Charlie Munger

http://www.fool.com/investing/general/2010/09/29/take-it-back-mr-munger.aspx

Dear Mr. Munger,

Please feel free to retract at your earliest opportunity your recent comments disparaging gold investors. Aside from lacking merit, or basis in logic, I feel they were in extremely poor taste.  

"Let's work our way backwards through your statement, starting with your vilification of the character of individuals based upon their investment decisions. I happen to be a nice guy if you'd take a moment to know me, but your statement suggests you would have no interest in looking beyond the shares of gold and silver bullion proxy Central Fund of Canada (AMEX: CEF) that I hold steadfastly in my investment portfolio."

"I am particularly mystified by your attempt to relate the decision by investors to save capital in gold, rather than in rapidly depreciating U.S. dollars, to your moral imperative to understand what does or does not work in human systems. Could not this entire post-Bretton Woods experiment with unbacked fiat currency prove the ultimate example of what does not work in human systems?"

"If you have no interest whatsoever in gold, I am not here to attempt to change your opinion. What I do seek is your recognition that the people bear the ultimate burden of the persistent currency devaluation and reckless fiscal policies that carry sustainable recovery further from our grasp. They include many millions of struggling individuals with nary a minute fraction of your financial resources, and those which see gold as a means of protection from further losses deserve far better than to become the subject of your misplaced ire."

We, the gold-holding citizens of the world who refuse to be victimized by competitive global currency debasement, kindly await your apology. 

Sincerely,

Christopher Barker

11 Comments – Post Your Own

#1) On September 29, 2010 at 11:26 AM, vriguy (82.12) wrote:

Charlie Munger may have made some insensitive comments recently that he should apologize for, but I fail to understand why he should apologize for his views on gold as an investment. 

Either events will prove him right, no apology needed; or prove him wrong, in which case he will lose monetarily (in gold and $ terms) which is the price of error in a capitalist world.  Heaping scorn on people who do not agree with you is a widespread human trait, so we should not be too harsh on him for doing that.  So far, you are winning the gold argument where it counts.  Isn't that enough?

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#2) On September 29, 2010 at 11:31 AM, mtf00l (47.15) wrote:

As to waiting for Mr. Munger's apology...eh, don't hold your breath. I suspect Mr. Munger is upset because Joe Investor is driving up the price he has to pay for gold and he want's it "cheap". =)

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#3) On September 29, 2010 at 11:38 AM, XMFSinchiruna (28.52) wrote:

vriguy

I would never ask anyone to apologize for their views on a particular investment or asset class. What he most certainly needs to apologize for is his direct, personal, and completely unwarranted attack against gold investors.

As for forgiving his comments simply because they exhibit a "widespread human trait", that's like giving your students all "A"s because the entire class failed to study. That is an example of an approach that I think can be shown not to work in human systems.

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#4) On September 29, 2010 at 3:04 PM, masterN17 (< 20) wrote:

Regarding his ad hominem, I think he would ask you to "suck it in and cope buddy"

- N 

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#5) On September 30, 2010 at 12:00 PM, silverminer (38.68) wrote:

Are you guys following these comments to the article?

So far, we've had TMFBent chime in with some unflattering remarks for all of you gold proponents here in CAPS, and a priceless statement that the "tone" of my article supports Munger's thesis. You can't make this stuff up. The ire that's out there directed at investors in gold remains as palpable as it has ever been ... perhaps more so now that so many who have eschewed gold exposure may in fact be regretting the missed opportunity.

I try to make light of it, but truthfully I am exhausted by the relentless and misdirected negativity.

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#6) On September 30, 2010 at 12:58 PM, masterN17 (< 20) wrote:

If you don't take it so personally, Bent's remark is actually quite funny, mostly because it points to an underlying generality: anonymous Internet users tend to be assholes.

The comedian holds up a mirror, only the dour feel insulted.

Do what you do Sinch, you're good at it. No need to engage the haters - just disprove by example. And don't take things personally - its bad for your health.

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#7) On September 30, 2010 at 3:58 PM, XMFSinchiruna (28.52) wrote:

masterN17

I appreciate the encouragement, but you'll understand if I stop short of classifying Bent's comment as anything even approximating comedy. During my subsequnt correspondence with him, he provided no indication whatsoever that the comment was intended with levity.

For those who did not see his comment, he wrote:

"If Munger thinks gold bugs are jerks now, he should spend a few days reading blog posts in Caps."

It's an unwarranted slur based upon a malicious stereotype.

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#8) On September 30, 2010 at 4:05 PM, Mstinterestinman (35.26) wrote:

Gold bugs arent jerks do I think they are making an investment mistake especially those buying after 1200 probably but eh if i'm right no sense in being an ass about it. In my opinion this last year was the stock buying opportunity of a lifetime or at the very least thelast couple decades. When the dow hits 12000 and keeps marching you can buy all the gold and can goods you want if I want tangible I'll Oil and gas or real estate just my opinion of course.

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#9) On September 30, 2010 at 4:32 PM, XMFSinchiruna (28.52) wrote:

Mstinterestinman

Absolutely ... that's the attitude I would love to see more of. Disagreement without character judgement. Thank you for sharing your thoughts! I certainly hope you are right about the Dow, as another round of weakness like the one I sense looming is not what this country needs.

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#10) On October 01, 2010 at 3:29 PM, rhallbick (99.73) wrote:

Sinch,

I couldn’t help but give this some thought ever since I heard Munger make that comment (I watched the interview and he wasn’t kidding).  Unfortunately, he didn’t explain his position well enough that I have high confidence in my perception of what his position actually might be.  Your moral obligation to become rational is not compatible with owning gold?  I’m left with the impression that I am not sure about what his position was because he didn’t want me to understand.  It was an ambiguous statement that he didn’t really want to explain, possibly because it would involve saying things that the general public shouldn’t be told or possibly he just didn’t feel like explaining it at the time.

I guess the remark stood out for both its rudeness and the contrast it posed with his other remarks where he politely half-excused some of those who played a role in creating the current crisis.  For example, business leaders who drove their companies bankrupt through rashness and greed, just needed to be reigned in by the accountants?  But they’re not jerks?

This much I am sure of:  He is not going to retract his position and if he said, “jerk” for the psychological effect, then he won’t retract that either.  If he does not want to discuss the issue because of public confidence risks, then he may never go into it in more detail.

I am also sure that arguing with him about whether owning gold is currently a prudent path for protecting your personal savings is a waste of time.  He has already conceded that you will probably be right.  His position is somehow tied to what he perceives is best for our social institutions, even if it means, as an individual, you will lose what you saved.

Old parable:  You work hard in the fields all year and set aside a full storehouse of food to carry you through the winter.  Others in your community spent the summer frolicking, laughing and dancing the days away.  Winter comes and the frivolous are now starving.  Do you have a moral obligation to open your storehouse to those now in need?  Is the preservation of the community more important than the sanctity of your personal savings?

While this might not be anything like what is in Munger’s mind, he will be coming at the issue from a societal angle like this.

If I’m anywhere near the right track on his thinking, then he might propose that instead of people placing their savings into precious metals, they should be investing that capital into productivity-enhancement, production of exportable goods, development of new worthwhile products, solutions for future energy needs, medical breakthroughs and the like.  And if this is correct, then he could discuss this aspect of it in the future, without bringing up the monetary issues.

At the beginning of the first Great Depression (and Munger is a child of the Depression), uncollectable loans started to cause the failure of some of the banks and savings and loan institutions.  These failures caused many people great concern and there began to be an increasing withdrawal of personal savings from the remaining institutions.  What’s interesting here is that, in the early 1930’s, people who withdrew their cash from the banks and placed it somewhere else, presumably somewhere safe and accessible, were called “hoarders” in the press.  And at the time, they received much of the blame for the continuing depression.  The people, who did not withdraw their savings in time, generally either lost it or lost access to it.

RH 

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#11) On October 02, 2010 at 9:39 AM, catoismymotor (71.79) wrote:

Chris,

Let them say what they want. I am not concerned with those that marginalize those that put their money into PM. Those that fool themselves into thinking they know all forget they still have volumes to learn.

Cato

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