December 2023

“I never thought it was such a bad little tree. It's not bad at all, really. Maybe it just needs a little love.”

 -Linus Van Pelt

Charlie Munger just died. For those who don’t know, Mr. Munger was Warren Buffet’s long time business partner. Since their primary business is investing, he was Warren’s partner in shaping an incredible long term investment track record and an understanding of business and wealth creation. If you read a lot or study successful people, you will quickly find that behind the name you know there is a key supportive person, a spouse or a partner, that fills in their gaps and weak spots making their success possible. You may hear from me in Brien’s Bits or on the radio, but not only do I have a fantastic business partner who keeps setting me up to succeed as a leader, I have an incredible wife and a powerful team at Collins and Krank working together to support you, our clients, making Collins and Krank a leader in wealth management. 

Charlie was this support for Warren Buffet. Over the years I have seen many clips and quotes from Charlie. You won’t find a lot of long interviews or speeches. He just was not that type of guy. I saw him speak once when my boys and I attended the Berkshire Hathaway annual shareholder meeting. He sat up on the stage beside Warren, mostly silent, eating See’s Candies. Occasionally, he would add to what Warren was saying or answer a question from the shareholders, mostly with a well-crafted and witty one sentence response. He was famous for them. Over the next several weeks you are likely to see many one liners and quotes from Charlie Munger.

When he was younger, unlike Warren, Charlie did not study investing. He did his graduate work at Cal Tech becoming a mathematician. Eventually he ended up with Warren, who as many know, studied investment and finance under Professor Ben Graham, the father of value investing. It is Charlie, after getting together with Warren Buffet, who is probably most responsible for changing Warren from a value investor in the style of Graham to what he is today. Therefore, Charlie may be the person most responsible for Warren Buffet’s success. In fact, Charlie looked at the math and ratio analysis that Wall Street was doing on companies and said it was all wrong. It did not take into account accurately all of the power of the brand, innovation of the companies’ creative minds, or the savvy stewardship of good management. As can be witnessed by comparing companies, the math alone and various ratios are not enough to differentiate between good companies and bad. Charlie explained this saying, “It is better to pay a fair price for a good company, than to pay a good price for a fair company.”

Many of you know of our fondness for See’s Candies and how we like to share them. Part of why we like them is because they are a fantastic, sweet treat that is hard to match. What you may not know is that See’s Candies is a Warren and Charlie company. See’s Candies is owned by their company Berkshire Hathaway. I guess that makes me part owner as well. When we were at the annual meeting with Warren and Charlie, I already mentioned that Warren did most of the talking. Another memory I will cherish is how for four hours Charlie Munger sat on stage next to Warren, eating one See’s candy after another. Somebody would ask a question. Warren would start to speak, and Charlie would put a See’s candy in his mouth and begin chewing. We lost track of how many, but afterward Harrison speculated he must have gone through a dozen boxes of candy that day.

Christmas gifts from the President. After being thwarted by the Supreme Court on his initial attempt to forgive student loan debt as unconstitutional, President Biden tried it again with a different approach. This time he was successful and was able cancel $470,000,000,000 in student loan debt. While this was not for all students, it was a big number, and many will benefit. Hopefully they will remember to write a thank you card. If you wonder what your part will be in this, on average each taxpayer will be paying $1,800. 

"And there were in the same country shepherds abiding in the field, keeping watch over their flock by night. And lo, the angel of the Lord came upon them, and the glory of the Lord shone round about them: and they were sore afraid. And the angel said unto them, 'Fear not:"

Linus drops his security blanket on purpose

"for behold, I bring unto you good tidings of great joy, which shall be to all people. For unto you is born this day in the City of David a Savior, which is Christ the Lord. And this shall be a sign unto you; Ye shall find the babe wrapped in swaddling clothes, lying in a manger.' And suddenly there was with the angel a multitude of the heavenly host, praising God, and saying, 'Glory to God in the highest, and on earth peace, good will toward men.'" - Linus Van Pelt from LUKE 2: 8-14

Sincerely,

Brien Krank
Financial Advisor, RJFS
Senior Portfolio Manager
Managing Partner – Collins and Krank

Hear me on the radio Wednesday mornings from 7:35am to 8:55am on 1100am The Flag and 970 WDAY.

Any opinions are those of Brien Krank and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. Past performance does not guarantee future results. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Individual investor’s results will vary. Raymond James is not affiliated with Nick Murray, Federated Hermes, or First Trust. Neither Raymond James Financial Services nor any Raymond James Financial Advisor renders advice on tax or legal issues, these matters should be discussed with the appropriate professional. The information contained in this letter does not purport to be a complete description of the securities, markets, or developments referred to in this material and does not constitute a recommendation.