U.S. Markets closed

Charlie Munger says Chinese stocks look cheap, but you can't invest like he does

·Senior Markets Editor

At the Berkshire Hathaway (BRK-A, BRK-B) annual meeting on Saturday, vice chair Charlie Munger said he liked the Chinese stock market better than the U.S.

In an interview with Yahoo Finance editor-in-chief Andy Serwer, Munger expanded on this idea and, in doing so, outlined quite simply why you — the average investor — will never be Charlie Munger.

“One of the things we got into [in China] was the Shanghai airport, the main airport in China, with no debt net,” Munger said. “How can you lose owning the main airport in China?”

When asked how one gets into that kind of investing opportunity, Munger said, “I have a very nice young Chinese-American who helps me. He speaks the language and goes over there all the time… It takes extra work. But why should it be easy to get rich?”

Berkshire Hathaway vice chairman Charlie Munger.
Berkshire Hathaway vice chairman Charlie Munger.

So there you have it: as long as you already have millions in the bank — Munger’s net worth is estimated at $1.4 billion — and personal connections to invest not in publicly-traded securities markets but private entities backing physical infrastructure in the world’s second-largest economy, you’re all set.

And while the Berkshire annual meeting is popular because listening to Warren Buffett and Munger opine on investing, business, and life is a learning experience in itself, too often their success is viewed as something repeatable or worth realistically aspiring to.

This year, Buffett talked at length about how most investors are better served in low-cost index funds rather than high-fee hedge fund investments. Buffett also explicitly praised Vanguard founder Jack Bogle for making this possible for most investors.

Now, there are no doubt many Buffett disciples and meeting attendees who believe they are the exception and will one day replicate the success of Buffett and Munger by emulating their strategies. No doubt, some will.

But if there’s a message Buffett made explicitly on Saturday and Munger made implicitly when talking about China, it is that their success is both the combination of good judgement and good luck. Neither can be counted on.

“I think a shrewd person can find more bargain stocks in China than he can find in the United States,” Munger said. “That’s all. That’s all I meant. It was a happier hunting ground for the value investor.”

“I didn’t say it was easy,” Munger added. “But if you work at it, you can find more [attractive investment opportunities]. And better.”

Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland

More on Warren Buffett and Berkshire Hathaway: