Famed Climatologist Charlie Munger

The technology which solved that great environmental problem in the early 1900s is the one that created today’s environmental problem, the internal combustion engine. Munger would argue that something in new technology will come along by virtue of a profit-seeking capitalist (think Henry Ford or Elon Musk) and solve the problem. Charlie said the academics “think more and more about less and less”, and must realize that electricity is created from something and most of the ways it was created in the past have been rejected (hydro, nuclear, coal).

Contrast this with the opinions of media in general, the academic community, and political leaders, who recommend doing enormously expensive and economically disruptive things today.

Most of this relies on the academic community (which of course is always completely objective, has no ax to grind, and includes Caltech). You could almost see the gentleman from Caltech conducting the interview gasp when Charlie gave his answer. Remember, Charlie will always remind people that he is a big fan of interdisciplinary education, which he referred to as liberal arts education.

In other words, many investors and intellectuals are in an environmental echo chamber that lacks the incorporation of other disciplines. Think of the top scientists at our best universities like you would think about an accountant. The academic specialist tells you what makes their discipline add the most value and what keeps them awake at night. The accountant recommends taking tax losses on losing stock positions in December because they can demonstrate saving you tax dollars by April. Unfortunately, it might be walking into what is called the ‘January Effect’. It is proven that the best-performing stocks in January come from the ones sold late in the prior year due to tax selling.

Contrast what Charlie Munger said about climate change with this December 16, 2020 article in The Wall Street Journal:

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Disclosure: This article contains information and opinions based on data obtained from reliable sources, which is current as of the publication date, and does not constitute a recommendation ...

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Old Time Investor 2 months ago Member's comment

Fascinating.