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Munger's Mantras UPDATE June 1 2025

Famous investor Warren Buffett and his company Berkshire Hathaway have been in business making investors rich since 1965.  Although Berkshire was founded in 1839, it was a much different company. The company buys other companies by investing directly in them or buying their stock. As any stock, Berkshire has it risks, and as part of the stock market, may go down in market crashes.

Although Buffett’s name is the one most often tossed around when mentioning Berkshire Hathaway, he had a right hand man named Charlie Munger. Having met at a party in 1959, they haD been together as business partners up until Munger’s death and both steered the company to legendary greatness.

Munger passed in 2023 at age 99 and worked as vice chairman up until the day he died.

Both Munger and Buffett shunned things they didn’t understand and had more of a general macro view when deciding what companies to buy.

Munger’s approach on how to invest were simple and straight forward and unlike any I have ever heard of before or since.

  1. Inversion: Solve a problem from the back end forward. As a weather forecaster in the air corps, instead of opinionating on what weather was good to fly in, he instead thought of what weather would instead might kill pilots and simply avoided that. When investing, consider not only what you could make but what you could lose.
  2. Opportunity cost: Could you make more money elsewhere. Should you invest in that dividend stock paying 3% when you could buy a CD paying 4%?
  3. Circle of Competence: Admit what you don’t know and stick within the circle of what you do know. Stay within your limits of what you know and don’t guess.
  4. Confirmation Bias: Avoid leaning into what you BELIEVE should happen and instead only focus only on what IS happening. We often look through rose colored glasses and see only what we want to see.
  5. The Lollapalooza Effect: Multiple positive factors can amplify gains many times over. When all things align and are positive, gains can explode.
  6. Second Order thinking: Considering the many possible outcomes now and farther down the road instead of just considering the initial idea, concept or possible expected outcome. Consider all possibilities that can occur now AND later.
  7. The Map is not the Territory: All economic or investing theories are just theories only. Consider they are not absolute predictors of what will happen. Nothing is cast in stone.
  8. Mr. Market: The market is a fickle beast and an emotional one. It may not always be logical or rational and in actuality, seldom is.
  9. Social Proof: Avoid jumping o bandwagons or following the mob. Stay rational. When everyone is thinking the same thing, nobody’s thinking.
  10. Occam’s Razor: The most logical and obvious answer often is the correct one. Consider all possibilities, but the most obvious answer more often than not is the right one.

 

In conclusion, Munger and Buffett used common sense to steer their company Berkshire Hathaway. Buying iconic brands like Coca-Cola, Wells Fargo and See’s Candies, among others, the reason for buying companies were not complexed.

It’s just a good business!

“Watching the markets so you don’t have to”    

(end)    As mentioned please use the below disclaimer exactly THANKS   (Regulations)    

You can sign up for his Investing class at Placer School for Adults (530) 885.8585. This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, and California Insurance License #0L34249 His insurance agency is BAP INC. insurance services.  Email: news@moneymanagementradio.com.

 

 


 

STOCK PE AND VALUE UPDATE MAY 31 2025

 

CAN YOUR STOCK GUSH PROFITS?

 

When investors hear about how expensive stocks are, some might think it refers to a high stock price. For example, if someone compares a stock that costs a buck a share, and then looks at a stock that has a $900 price tag, they may think the $900 stock is more expensive.

On one hand, they would be right if it pertained to how we shop for most things.

After all, if we see a dress priced at $20 bucks and one priced at $2,000, in a certain sense, the $2,000 dress is indeed more expensive.

But what if the $20 dress is made from cotton and the $2,000 dress is made from gold thread and has $5,000 worth of diamonds on it?

The $2,000 dress with $5,000 worth of diamonds and woven in gold thread certainly is a better value as for $2000 you are getting over $5,000 worth of diamonds plus the gold thread and hence, could be said to be a better value than the $20 dress.

The same can be said about the comparative price of stocks.

Many investors may only look at the price of a stock when deciding what to buy instead of looking for the better “value”.

Although there are many intangibles and ways to evaluate the value of a stock, the most basic method that almost any investor can use is what is called the “Price to earnings ratio” (PE).

The PE is a common published figure on almost all stock screeners and it represents how much you are paying in company earnings per each share of stock you buy.

The PE is calculated by dividing the price of a share of the stock by the earnings per share.

For example, if a stock is priced at ten dollars and the company annually earns one dollar per share, then $10 (price per share) divided by $1 (earnings per share), the PE ratio for this stock is 10.

If the company earned $2 per share, then $10 divided by $2 is 5.

Now suppose you were looking at buying a grocery store and between the two stores you were looking at, grocery store A had two owners and earned two bucks a year. Each owner would get one buck a year in earnings. Its PE would be 5.  (10 divided by 2).

Grocery store B also had two owners but earned only one buck a year. Each owner would get .50 cents a year. Its PE is 10.  (10 divided by 1)

If both stores were priced for sale at the same price, Grocery store A, having a lower PE, would be the better value as each owner gets more money per year than grocery store B, which subsequently has a higher PE. 

The PE therefore tells you what company is costing you more as it pertains to earnings. The higher the PE, the more expensive the stock relative to another with a lower PE.

This simplistic mindset can be one of many considerations an investor can look at when deciding what stock might be a better value.

Seasoned investors know that there are many more metrics one can look at when considering what stock to buy

Of course, a knowledgeable financial professional can always assist you when wading through a company’s financial vitals, but understanding even a small amount of how to evaluate a stock can begin to open the eyes of even the most beginning of investors.

After all, what is more simplistic in deciding what company to invest in then just seeing which company makes more money?

Although comparing PE is only one of many metrics that should be used, and its best to only consider companies in the same industry when using the PE comparison methodology, this common sense approach can start the mom and pop investor down the road of knowing a little bit more about the world of investing.

Education is the cornerstone of progress, and when it comes to your money, the more knowledge you have, the better you and your money will be.

  “Watching the markets so you don’t have to”    

(end)    

(As mentioned please use the below disclaimer exactly) THANKS   (Regulations)    

This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, and California Insurance License #0L34249 His insurance agency is BAP INC. insurance services.  Email: news@moneymanagementradio.com

 

 

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Update Gold and silver prices An opportunity? May 24 2025

 

 

Historical Precedent spells opportunity?

 

I have covered gold here in Money Matters on numerous occasions and the price of gold certainly has been on a tear as of late. Up from the few hundred bucks an ounce in the 1970’s, it has recently reached new high after new high, blasting through the $3,000/ounce level last month and now stands 10% higher in the $3,300/ounce range.

Gold is thought of by many investors to be an inflation hedge. Monetary authorities throughout the world also pay attention to, and acquire the yellow metal for their sovereign investments. This means that certain countries may buy gold for their own government accounts using their “central banks” to do so. A central bank is a “country’s official government bank” sort of speak, and these banks control the supply and issuance of each countries respective currency.

Not talked about as much however, is golds cousin, silver. Silver may also be thought of as a possible inflation hedge, and is sometimes called the “poor man’s gold”.

It is called that as silver is a heck of a lot cheaper than gold, clocking in at $33/ounce as the time of this writing. With gold around $3,300/ounce, that makes the current price ratio of gold to silver about 100 to 1. This means one could buy either 100 ounces of silver or one ounce of gold.

This 100 to 1 ratio is, to say the least, more than out of skew with historical ratios of gold to silver.
 

Those living in Nevada County in Northern California might have heard of the 16 to 1 mine (16:1) located in Alleghany, California. The gold mine was shut down in 1965 and was named 16:1 to reflect the price ratio of silver to gold that existed many decades ago.

When I was growing up and through my teen years, because I had an interest in economics since my childhood (odd I know), I was familiar with this 16:1 ratio back then and indeed, throughout my entire life.

Over the decades since the 70’s, the ration of gold to silver has been on a seemingly relentless climb with only brief pullbacks. Having reached almost 100 to one way back in the 1940’s, it pulled back in the 16:1 range around 1968.

Needless to say, at a ratio of 100 to 1, the ratio has rarely been higher and when it reaches these levels, historically one of two things happens. Either the price of gold falls to bring the ratio more in line with the averages or the price of silver rises.

Although the ratio could go higher still, looking at a 100 year chart, we are definitely at the top of its ratio range.

Many of the newsletters and articles I see from within my circles have noticed the data and are calling for a spike in silver prices. I tend to agree and indeed, the price of silver has been rising.  Having sold at under $8 bucks/ounce in 2002 and almost cresting $50 bucks/ounce in 2011, it has visited the $20 range a few times since then. Only recently has it been rising past $30/ounce and some say it is destined for much higher prices.

Realizing the gold to silver ratio is almost as high as it’s ever been in the last hundred years or so, the recent rise in silver prices along with a very high gold to silver price ratio could mean the poor man’s gold (silver) is ready to run. Some analysts are calling for a $50/ounce price with a year and I have seen as high as $5,000/ounce may be in the cards sometime in the future.

That said, silver could reverse course and fall back to wherever, and gold could come crashing down, bringing the gold to silver ratio back to within normal range.

In conclusion, one can never tell if markets will stretch even more out of whack compared to historical precedents or be setting up to bring in enormous profits to those who notice such things.

In the end however, buyer beware is always in play. Markets have risk and investors can lose some or all of their money playing them. It is always wise to seek out the help of an investment professional to better understand markets and their movements. Either that or contain your investing to FDIC insured products which may protect your principal no matter what happens.

“Watching the markets so you don’t have to”    

(end)    

(As mentioned please use the below disclaimer exactly) THANKS   (Regulations)    

This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, and California Insurance License #0L34249 His insurance agency is BAP INC. insurance services.  Email: news@moneymanagementradio.com

 

 

Vision and Healthcare find !    I found lower cost coverages and switched.   
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Update Economic Turmoil May 22 1955

 

Gremlins in the markets  Pulling to and fro

 

 

Well, I guess economic fireworks is an appropriate term for the last few months here in America. And what happens in America definitely does not stay in America.

At least in the case of what we do economically. 

Operating under the belief that the U.S. has been taken advantage of for years if not decades as it pertains to imports and exports, Trump took office and immediately went about attempting to remedy the shortfalls by implementing tariffs on a variety of trade partners, goods and services.

Exports are products we sell to other countries and imports are goods and services we buy from other countries.

Tariffs are just a tax on things coming into a country from another country.

One would think country A just sells to country B for whatever the price is and be done with it.

If you don’t like the price, don’t buy. Its not rocket science.

But in the grand wisdom of the bureaucrats, and for a variety of debatable reasons, a government will put a tax on incoming (imported) goods.

Whether it be to garner more money for the government or make stuff made overseas more expensive so people will buy things made locally, the tariff money all goes to the government and not to the people.

Economically speaking, tax credits to local businesses, instead of tariffs, is the better way to go and has been argued by this analyst many times over. Tariffs just make things more expensive to all concerned.

Then you get into the tit for tat tariff wars that are plaguing us now. Country A taxes country B’s products, then country B retaliates and taxes Country A’s stuff.

Ad nauseam, rinse and repeat.

It can turn out to be a game of chicken as to who blinks first and the person with the biggest cojones usually wins those types of contests.

Meanwhile, as the game escalates to its conclusion, the consumer pays the price.

Literally.

The goal, theoretically, is to level the playing field and bring more into balance the trade between the two countries.

That’s assuming there was an imbalance in the first place.

Whether it has been because of decades of bad decisions or just the natural progression of trade between economically different countries, it has been argued the playing field has been notably unbalanced for the United States for many years and that Trump is simply trying to level it to the benefit of American companies and the American consumer.

We may never know the details of such arguments and will only find out sometime later if the end result has the desired effect, which is to make life better and more affordable for the rest of us.

For now however, I am of the opinion this is just another in a long line of reasons inflation is not going to go away any time soon.

That, in turn means interest rates will remain elevated and the markets will continue to be turbulent, directionless and unpredictable.

“Watching the markets so you don’t have to”    

(end)    

(As mentioned please use the below disclaimer exactly) THANKS   (Regulations)    

This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, and California Insurance License #0L34249 His insurance agency is BAP INC. insurance services.  Email: news@moneymanagementradio.com

 

 


 

Gold and Silver update April 27 2025

 

Humm, what should I do?

Historical Precedent spells opportunity

 

I have covered gold here in Money Matters on numerous occasions and the price of gold certainly has been on a tear as of late. Up from the few hundred bucks an ounce in the 1970’s, it has recently reached new high after new high, blasting through the $3,000/ounce level last month and now stands 10% higher in the $3,300/ounce range.

Gold is thought of by many investors to be an inflation hedge. Monetary authorities throughout the world also pay attention to, and acquire the yellow metal for their sovereign investments. This means that certain countries may buy gold for their own government accounts using their “central banks” to do so. A central bank is a “country’s official government bank” sort of speak, and these banks control the supply and issuance of each countries respective currency.

Not talked about as much however, is golds cousin, silver. Silver may also be thought of as a possible inflation hedge, and is sometimes called the “poor man’s gold”.

It is called that as silver is a heck of a lot cheaper than gold, clocking in at $33/ounce as the time of this writing. With gold around $3,300/ounce, that makes the current price ratio of gold to silver about 100 to 1. This means one could buy either 100 ounces of silver or one ounce of gold.

This 100 to 1 ratio is, to say the least, more than out of skew with historical ratios of gold to silver.
 

Those living in Nevada County in Northern California might have heard of the 16 to 1 mine (16:1) located in Alleghany, California. The gold mine was shut down in 1965 and was named 16:1 to reflect the price ratio of silver to gold that existed many decades ago.

When I was growing up and through my teen years, because I had an interest in economics since my childhood (odd I know), I was familiar with this 16:1 ratio back then and indeed, throughout my entire life.

Over the decades since the 70’s, the ration of gold to silver has been on a seemingly relentless climb with only brief pullbacks. Having reached almost 100 to one way back in the 1940’s, it pulled back in the 16:1 range around 1968.

Needless to say, at a ratio of 100 to 1, the ratio has rarely been higher and when it reaches these levels, historically one of two things happens. Either the price of gold falls to bring the ratio more in line with the averages or the price of silver rises.

Although the ratio could go higher still, looking at a 100 year chart, we are definitely at the top of its ratio range.

Many of the newsletters and articles I see from within my circles have noticed the data and are calling for a spike in silver prices. I tend to agree and indeed, the price of silver has been rising.  Having sold at under $8 bucks/ounce in 2002 and almost cresting $50 bucks/ounce in 2011, it has visited the $20 range a few times since then. Only recently has it been rising past $30/ounce and some say it is destined for much higher prices.

Realizing the gold to silver ratio is almost as high as it’s ever been in the last hundred years or so, the recent rise in silver prices along with a very high gold to silver price ratio could mean the poor man’s gold (silver) is ready to run. Some analysts are calling for a $50/ounce price with a year and I have seen as high as $5,000/ounce may be in the cards sometime in the future.

That said, silver could reverse course and fall back to wherever, and gold could come crashing down, bringing the gold to silver ratio back to within normal range.

In conclusion, one can never tell if markets will stretch even more out of whack compared to historical precedents or be setting up to bring in enormous profits to those who notice such things.

In the end however, buyer beware is always in play. Markets have risk and investors can lose some or all of their money playing them. It is always wise to seek out the help of an investment professional to better understand markets and their movements. Either that or contain your investing to FDIC insured products which may protect your principal no matter what happens.

“Watching the markets so you don’t have to”    

(end)    

(As mentioned please use the below disclaimer exactly) THANKS   (Regulations)    

This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, and California Insurance License #0L34249 His insurance agency is BAP INC. insurance services.  Email: news@moneymanagementradio.com

 

 

 

We also can buy GOLD MINER STOCKS.  See me for details if you have questions

marc

 


 
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