The CIO Brief: You Can't Argue with Crazy

Avoid crazy at all costs. - Charlie Munger

This is one of an endless string of Munger quotes I plan to drill into my kids until it sticks.

That means readers of these notes will get more than their fair share as well - sorry in advance.

But this one is always worth repeating.

It was a throwaway line in Charlie’s last interview with CNBC’s Becky Quick (one of the few respectable “financial journalists”) shortly before he passed away.

It has so many applications:

• don’t be erratic

• don’t make crazy bets

• don’t use crazy leverage

• don’t date crazy women, etc., etc.

Speaking of crazy….

Evergreen Signals

This is one of the wildest stock charts I’ve ever seen.

I want to meet the man who held through this volatility.

I’m sure there are more but they probably held the stock in a brokerage account they forgot they owned.

That, or they’re deceased.

HOW else could someone have held through this insanity? The chart (not the company) reminds me of the few brave investors that held Amazon through its ~95% drawdown in 2001.

I won’t opine on whether Carvana is overvalued or not (although at a ~100 P/E multiple you can guess which way I’m leaning).

However, I am a happy customer.

I just sold my second car to Carvana, which was the catalyst for me looking up the stock (and then falling out of my chair when I saw it had surged back to $390).

In Carvana’s defense, it is a dramatically better sales process vs. the old-school approach, which involved posting your used car on Craigslist, meeting the buyer at some random parking lot, and then hoping they wouldn’t rob you at gunpoint.

I don’t know what this says about today’s market. Plenty of meme, retail-favorite stocks like Carvana seem to be booming as of late.

Generally not the best of signs, but don’t forget:

Out of the Woods

When I was young and broke, I too ate at Chipotle 75+ times in one year.

But I didn’t have a convenient “research” excuse.

This analyst might be crazy - or he might be a genius. It’s a fine line.

Brad Johnson

Managing Partner & CIO

​Evergreen Capital​

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