Warren Buffett And Charlie Munger Say Elon Musk Still ‘Overestimates’ Himself, But That His Dreams Have ‘A Foundation’

Written by B. Carlisle on updated
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When it comes to the billionaires club, the differences between Warren Buffett, Charlie Munger, and Elon Musk are perhaps best illustrated with an old fashion joke.

Let’s tee it up:

Warren Buffett, Charlie Munger, and Elon Musk walk into a bar. Warren Buffett orders a Coca-Cola, Charlie Munger asks for a root beer, and Elon Musk orders a Mars-gherita.

Or….

Warren Buffett and Charlie Munger order their usuals, while Elon Musk tries to reinvent the concept of a “drink” by launching a rocket-powered cocktail shaker.

Cue the drum crash.

Billionaires Warren Buffett and Charlie Munger are very different from Elon Musk

The point is clear: While both Buffett and Munger have both accomplished big times in their own accord, they couldn’t possibly be more different.

Warren Buffett and his Berkshire Hathaway vice chairman, Charlie Munger, are undoubtedly two of the most successful investors of all time, with a combined net worth of over $150 billion. They are known for their conservative investment approach, their focus on long-term value, and their aversion to risky bets.

Related: Charlie Munger Thinks This Is The Single Hardest Part Of Building Wealth

Berkshire Hathaway’s five largest positions are businesses used by the masses every day, without fail: Apple Inc., Bank of America, Chevron, The Coca-Cola Company, and American Express. This simple strategy has worked over the years; Berkshire Hathaway stock has continued to boom, growing by over 50,000% since going public in 1983.

Elon Musk, meanwhile, has a penchant for digging in the weeds as the leader of his pursuits, along with big ideas that innovate and disrupt the status quo. His companies Tesla, SpaceX, Starlink, and Twitter are at the forefront of the electric car, communication, and space exploration industries.

Warren Buffett and Charlie Munger on Elon Musk over the years

Warren Buffett and Charlie Munger have expressed mixed opinions about Elon Musk and his business ventures over the years.

When asked about his thoughts on Elon Musk and Tesla in early 2020, Charlie Munger offered a couple of comments. Firstly, he stated that he would neither buy nor sell Tesla stock short. Secondly, he said: “Never underestimate the man who overestimates himself.” Munger acknowledged that Musk may overestimate himself at times, but he also recognized that Musk’s approach has been successful on numerous occasions.

“I think Elon Musk is peculiar and he may overestimate himself, but he may not be wrong all the time,” said Munger at the time.

Related: Here Are 4 Ways Warren Buffett Spends Less Money That Everyone Should Try

Munger had previously shared similar thoughts about Musk in 2019. He said he prefers someone who understands their limitations, but added that “weird guys who overestimate themselves occasionally knock it right out of the park.”

“I don’t want my personal life to be [around] a bunch of guys who are living in a state of delusion, who happen occasionally to win big. I want the prudent person,” Munger explained.

Warren Buffett has previously said he’s not interested in invested in Tesla, with the two trading jabs over their investment approaches over the years.

Elon Musk, meanwhile, has said that Buffett should run the U.S. Treasury, saying that he could do it in “less than an hour’s time each week.” He’s also chided Buffett for not investing in Tesla when it was a $200 million market cap company.

What do Warren Buffett and Charlie Munger still think about Elon Musk?

At the 2023’s annual Berkshire Hathaway meeting in Ohama, Nebraska, Warren Buffett and Charlie Munger were asked a question about their previous comments on Elon Musk. A member of the audience asked if they still believe the Twitter CEO and Tesla CEO overestimates himself.

It’s ripe timing, with Musk often in the headlines for his no-holds-bar takeover of Twitter.

The billionaire investors said they do still this he overestimates himself, but they note Elon’s big dreams have “a foundation”. They also note they wouldn’t want to be in each others shoes.

Here’s an edited transcript of their remarks:

Charlie Munger: Well, yes, I think, Elon Musk overestimates himself, but he is very talented. So he’s overestimating somebody who doesn’t need to overestimate to be very talented.

Warren Buffett: There’s a Bill Maher program about a week old, maybe two weeks old, but, he interviews Elon and Elon does a terrific job going toe to toe with Bill Maher. It’s worth watching. And Elon is a brilliant, brilliant guy and I would say that he might score over 170. He dreams about things, and his dreams have got a foundation.

Charlie Munger:  He would not have achieved what he has in life if he hadn’t tried for unreasonably extreme objectives. He likes taking on the impossible job and doing it. We’re different. Warren and I are looking for the easy job that we can identify.

Warren Buffett: Yeah, if we can do it playing tic-tac-toe, we’ll do it.

Charlie Munger: We have a wholly different way of going about it.

Warren Buffet: A different whole way. But we don’t want to compete with Elon in a lot of things.

Charlie Munger: We don’t want that much failure.

Warren Buffett: It takes over your life in a way that it just doesn’t fit us. But there are going to be, well there have been important things done by Elon already and it requires – fanaticism isn’t the word…

Charlie Munger: Yeah, it is the word.

Warren Buffett: Well, it isn’t quite the word, but it’s a dedication to solving the impossible, and every now and then he’ll do it. But it would be torturous to me and Charlie. And I like the way I’m living. I wouldn’t enjoy being in his shoes, but he wouldn’t enjoy being in my shoes either. Watch the Bill Maher interview.

Here’s the video. It’s a fascinating exchange and illustrated what two of the most successful investors of all time think about one of the great innovators of our era.

 

Author
B. Carlisle

Contributing editor at Wealth Gang. An entrepreneur at heart, he's passionate about meaningful ways to leverage technology and social media for business opportunities and side hustles.