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Munger Cautions About Upcoming Stock Market Returns (2021-2031)

munger-cautions-about-upcoming-stock-market-returns-2021-2031


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Since the last market crash in 2008, the stock market has been booming. The next decade we may not see the same returns, Charlie Munger certainly doesn’t think so. Let’s dig deeper into his stock market predictions for the next decade (2021-2031).

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One of the things that we all know about Charlie Munger is he’s not afraid to express his opinion. If he has something on his mind, something that he wants to tell you, he won’t mince words, he’ll say it upfront… So he got asked recently what his thoughts were on the stock market returns over the next decade. Here’s what he said…

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Ok, I want to try and explain that for those who don’t fully understand what he’s talking about. The first thing that he mentions is the fact that everyone’s looking to invest in the stock market…

What’s happened over the past decade in stocks we’ve seen unprecedented growth. Since the end of the last market crash 11 years ago, the stock market is up over 400%. Aka over 5 times in price…

Now what this does is it makes everyone flock into the market. What you put your money in a decade ago and now you have 5 times the amount? I want to do the same. And then what happens is you get the cook, the cleaner, the sports coach, they all want to put their money in the stock market and prices get higher and higher.

It’s kind of similar as to what was going on in the 1920’s in the stock market. So the 1920’s was known as the roaring 20’s. Back then the Ford Model T’s were being sold, the economy was firing and everyone wanted to invest…

And they made a lot of money with this, that was until 1929 came along. The market was clearly overpriced, people realized they didn’t understand their investments and it crashed. It only recovered 30 years later in 1959…

And that’s the thing, a lot of people who are currently in the stock market, don’t know a thing about market history, about previous lost decades in the market, or anything like that. All they see is their neighbors and friends getting rich through investing, so they want to join in on the party.

But as Munger thinks there’s only so long, that the party can go on. As much as we would like to believe, you can’t just keep making infinite returns in the market, eventually things have to simmer down. And if you look at history you will see that. You will see periods where the market went boom. And you’ll see periods just like from 1929 to 1959 where the market went no where…

The other thing I don’t know if you picked it up, was that Munger said “I think the returns will go down. Real Returns will be lower”.

So why did he specifically point out real returns? In-fact what I should probably ask you first is do you know what real returns are? Real return is what is earned on an investment after accounting for taxes and inflation. Real returns are lower than nominal returns, which do not subtract taxes and inflation.

So Munger has put a specific focus in that inflation and or taxes are probably going to be higher over the next decade.

Let’s start by looking at taxes…Unless you’ve been living under a rock, I’m sure you guys know we have a new president in 2021. His name is Joe Biden who has taken over from Donald Trump.

Now Trump was not a big fan of the old taxes. In-fact one of the major moves that he made when he came to power was to majorly cut taxes. Especially the corporate tax rate which he lowered from 35% to 15%… Biden is going to be doing the opposite, raising taxes, particularly on the wealthy, on corporations and and on estates aka higher taxes for investors and businesses…

So that’s something that we’re going to have to watch out for over the next decade, higher taxes. But arguably even more important than this is inflation…

For those who don’t know inflation is simply the rise in the prices of goods and services. For example did you grandma ever tell you of how she used to buy a loaf of bread for 10 cents and now it’s a rip off it’s $3. Why’s that the case, it’s inflation. The increase of prices…

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DISCLAIMER: It’s important to note that I am not a financial adviser and you should do your own research when picking stocks to invest in. This video was made for educational and entertainment purposes only. Consult your financial adviser. * Some of the links on this webpage are affiliate links. This means at no additional cost to you, we earn a commission if you click through and make a purchase and/or subscribe. This has no impact on my opinions, facts or style of video.

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48 Comments

  1. M. Al Sabah
    July 21, 2021 at 1:11 am

    So if we pull out of the stock market, where do people invest? Where will all the money that is being made and has been made in the last decade be? Seems to me that there is more money in the global economy than ever before as nations advance and populations multiple and people need goods and services. Seems like there is an endless need for production- business- for employment and enjoyment, so I can't see how the growth trend will stop… There isn't going to be less people needing less phones, food, medical supplies, housing and luxury items. There is going to be more demand as societies modernise and populations expand.

  2. Wayne Filkins
    July 21, 2021 at 1:11 am

    Here's what this video doesn't account for. Every since the internet took off, things started moving faster. So what took a decade in the 20's will take a month, or a couple months, maybe even a year tops (unlikely). Everything moves FAST now. So what I see happening is a huge crash. Fast. Not unlike the Covid crash, but in more sectors rather than specific ones like travel etc. The next one will be HUGE and all over the market (idk exactly what sectors will be safe tbh). Everyone will think it's going to last years, or a decade, and they will bail. Fast. Bail on everything. HUUUUUUUGE bubble pop. That's where I will be calculating and looking to get in at the bottom, same way I got into airlines at the bottom. I got into UAL at literally something like $8 per share. I made a mistake and bought options, and it didn't bounce as fast as I expected, so I only made a couple thousand. If I had just bought normal shares I would have made a lot more.

  3. wthomas
    July 21, 2021 at 1:11 am

    I don't see how a lost decade can be avoided at this point. The stock market is a massive pyramid scheme.

  4. Mike Schmidt
    July 21, 2021 at 1:11 am

    I understood exactly what he was saying.

  5. mkg g
    July 21, 2021 at 1:11 am

    I wouldn't touch stock market "investing"with a ten foot pole. You are a fool if you think you will gain wealth in the stock market. In fact you are no different than those who go to the casino to raise money to pay the bills. It's laughably stupid.

  6. Vermilicious
    July 21, 2021 at 1:11 am

    I find it fairly easy to ignore the hypes, but I have a hard time finding the opportunities. It seems everything is overpriced.

  7. Abhay Bhatt
    July 21, 2021 at 1:11 am

    Everytime he says 'taxes', I hear 'texas'.

  8. Dom R
    July 21, 2021 at 1:11 am

    Gay bear

  9. Tim W
    July 21, 2021 at 1:11 am

    I have to agree with alot what he has to say Equity markets are severely distorted.

  10. Gorilla VICK
    July 21, 2021 at 1:11 am

    I honestly think it’s all these new “investors” dumping money in anything that goes up making it shoot over its value, I have been investing in the $SPY since 2018 and I’m worried that when the market crashes the world will go to s***.
    Covid made people buy toilet paper, the market crash will make people buy ammo. Am I wrong?

  11. Wilfred Ruffian
    July 21, 2021 at 1:11 am

    Predicting a collapse of stocks is easy, you'll eventually be right. predicting when is hard.

  12. Jeff Dunlap
    July 21, 2021 at 1:11 am

    When people are curled up in bed in the fetal position, believing the world is coming to an end, Buy. When people are dancing in the streets believing the party is never going to end, SELL.

  13. Barrison Carter✅
    July 21, 2021 at 1:11 am

    Trusting these YouTubers can be risky a times, coupled with the rate of scam these days And Bots in the comments sessions only few are lucky to find a true Expert in trading forex and I’m glad to be one of those lucky ones, y’all watch out for the bots here trade safely..

  14. pcdubya
    July 21, 2021 at 1:11 am

    "a mans got to know his limitations" Harry Callahan

  15. Dumuzi Shepherd
    July 21, 2021 at 1:11 am

    Uugh. Printing doesnt mena inflation. Freaking idiots,man. There's so many people saying things that really sound crazy

  16. naz
    July 21, 2021 at 1:11 am

    with intrest rates in saving bank accounts being basically 0 its still better too have ur money in stocks because at least you still get dividens, right now saving cash is so shit, you basically losing money because the intrest rates are so far below inflation lol

  17. Peter Norman
    July 21, 2021 at 1:11 am

    Well let's say he knows what he is talking about but this has come with age and experience !

  18. syh478
    July 21, 2021 at 1:11 am

    But if you leave money in a low interest bank then with inflation, you've actually "lost" money

  19. Ethan James
    July 21, 2021 at 1:11 am

    Bitcoin should be transparent and it isn't as easy as people thinks it is, there are so many strategies to be learnt and unfolded about Bitcoin trading

  20. Al Bongo
    July 21, 2021 at 1:11 am

    Great breakdown

  21. M K
    July 21, 2021 at 1:11 am

    Stock market is rat poison squared for old people.

  22. bngh12ful
    July 21, 2021 at 1:11 am

    They were bailed out twice, and can be many times more.

  23. Andrew H
    July 21, 2021 at 1:11 am

    ''In real terms''. That's an interesting statement.

  24. Craig Ross
    July 21, 2021 at 1:11 am

    4:30 A US loaf of bread is a rip-off at $3. I don't know what the hell is wrong, but there's something badly amiss. In the UK I pay 49p (68 cents) for a really great 800g wholemeal loaf. You can get white bread better than the terrible US bread for 36p. You're being ripped off.

  25. Casey Hill
    July 21, 2021 at 1:11 am

    real returns are just related to inflation, not taxes…even though they affect returns in general

  26. Biggs Dubowski
    July 21, 2021 at 1:11 am

    Inflation is NOT the rise in prices. Inflation is the decrease in the value of money. Prices don't rise. Money gets less valuable.

  27. Elisa Taylor
    July 21, 2021 at 1:11 am

    I think Investing in crypto will be the wisest thing to do at this very point of time. I've been in search of a professional forex/Bitcoin trader who can manage my trading account and generate profits for me, any recomendations?

  28. Laura Ward
    July 21, 2021 at 1:11 am

    <<🌘 I admire the efforts u put in your videos mate, digital currencies continues to reshape the world globally, its hard for for anyone going against them these days, though from a trader's perspective i feel we really need more experts in the field updating newbies / lnvesttors on how the community works. crypto currencies are gradually moving towards something big and the price surge over the past few months is just the beginning of greater things to come. lots of persons are skeptical on when to buy-in the market and whether it isn't too late to buy an asset, when you're hodling, it could be but when trading its never too late to buy. a trader with the right strategy and indicators earns big regardless of market price (bulls or bears). I trade using signals from trade expert Mrs. Lyra Holt Dean with her guide and signal service i 've made over 27B TC worth of crypto assets over some months. only for crypto inclined issues ,, connect her @ (contact@lyraholtdean, CM)

  29. Crypto Worldwide
    July 21, 2021 at 1:11 am

    Successful people don't become that way overnight. What most people see at a glance wealth, a great career, purpose is the result of hard work and hustle over time. I pray that anyone who reads this will be successful in life.

  30. LeRoy Morris
    July 21, 2021 at 1:11 am

    If the American people continue to vote liberal we will destroy ourselves financially…

  31. Andy Moore
    July 21, 2021 at 1:11 am

    I have learnt so much through the internet than I actually did in school.

  32. Cisco Philip Coman
    July 21, 2021 at 1:11 am

    Trade with Mr Greg T Martin be sure of a great and better result, and do remember to always share your testimony with others

  33. Alice Raymond
    July 21, 2021 at 1:11 am

    What is this Crypto and why
    are people investing money in it..?

  34. FRANK
    July 21, 2021 at 1:11 am

    Most people venture into Crypto currency to be a millionaire meanwhile i just want to be debt free and live comfortably

  35. Clint Fletcher
    July 21, 2021 at 1:11 am

    I have been watching some videos and I was thinking about investing in bitcoin or forex , but still don't know where to start from, any recommendation?

  36. Matthew Stewart
    July 21, 2021 at 1:11 am

    We can make sure this is the best Decade ever if We elect leadership. Elect me as President I'll lead us all to the Vision our Founding Fathers had for all AMERICANS. All Mankind Equal Religion Intelligence Color Age Name Se

  37. Mohan Greg
    July 21, 2021 at 1:11 am

    Making money is the plan and with forex your plans can be fulfilled. .

  38. Andrew
    July 21, 2021 at 1:11 am

    In my opinion majority of printed money land in cryptocurrency markets. Till people believe in crypto there won't be a sky-rocket inflation.

  39. Mike Plazek
    July 21, 2021 at 1:11 am

    All I hear is a great buying opportunity for long term investing. Buy cheaper and hold for 20-30 years. Reinvest the dividends.

  40. Martins Luther
    July 21, 2021 at 1:11 am

    Hello, I'm new to forex trade And have been making huge losses but I recently see a lot of people earning from it. Can someone please tell me what I'm doing wrong

  41. dgmoocher D r
    July 21, 2021 at 1:11 am

    Don't jump in and out of the markets. You'll be fine.

  42. 기분좋아,4eternity
    July 21, 2021 at 1:11 am

    Be smart there is always something going up. or inverse. but I do believe too it's coming.

  43. Fleck Smugbrother
    July 21, 2021 at 1:11 am

    Pyramid scheme to be sure….

  44. Marcelo Stewart
    July 21, 2021 at 1:11 am

    In a few months or no time people we definitely be kicking themselves regret for missing the opportunity to buy bitcoin or invest in any cryptocurrency they known such as BITCOIN LITECOIN ETHEREUM TETHER DOGECOIN CARDONA XRP BINANCE COINS

  45. Ronny Cookson
    July 21, 2021 at 1:11 am

    Lack of trading discipline is the primary reason for intraday trading losses it is estimated that nearly 80-85% of intraday traders end up losing money in the stock market Experiencing loss is also part of the game but that don't mean you should give up.

  46. david skalski
    July 21, 2021 at 1:11 am

    Things will go down, mainly due to decreasing actual wages, and people's inability to purchase things, like homes.

  47. Called Out
    July 21, 2021 at 1:11 am

    More reason to get good at day trading.

  48. Grayson Jaxon
    July 21, 2021 at 1:11 am

    Love this video and the information given always learning and growing is the only way we can hone our skills and build ourselves. Most interesting thing is that the rich get Richer because the poor thinks that every opportunity is a scam Especially investment like bitcoin, dogecoin, safemoon, gold, silver, crude oil ethereum,litecoin,bitcoin cash, cardano, polkadot, stellar, chainlink, binance coin (BNB)etc has been able to represents legion of adventures and entrepreneur most especially risk taking, investors and problems solver