Tuesday, July 5, 2011

Charlie Munger on Accountants & High-Speed Traders

More From Charlie Munger at what was effectively the final Wesco Financial annual meeting.

Charlie has had a loyal following to this event for years but Wesco is no longer publicly traded after Berkshire Hathaway (BRK-A) acquired the remaining shares of the company last month.

With Wesco no longer a public company the gathering was given the title: "A Morning With Charlie".

The conference was promised to investors as a replacement for the annual shareholder meeting and paid for by Charlie himself.

From this The Motley Fool article:

Charlie Munger's Thoughts on the World: Part 1

On Accountants
"The medical profession wants to eradicate epidemics. Accountants feel no similar responsibility toward their field. They feel no embarrassment about it. They just want to get the job done. It's contemptible behavior. At the top of an idiot boom, a bank's allowance for bad debt goes to zero. That's the accounting rule. What kind of maniac thinks this is good? A certified public accountant, that's who."

On High-Speed Traders
"Fancy computers are engaging in legalized front-running. The profits are clearly coming from the rest of us -- our college endowments and our pensions. Why is this legal? What the hell is the government thinking? It's like letting rats into a restaurant."

Well said, Mr. Munger.

So the maniac accountants are not, well, accountable enough and the idea of allowing high speed traders in the market is equivalent to letting rats in a restaurant.

Just the kind of blunt commentary most who've followed Charlie Munger have come to expect.

Adam

Long BRKb

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