UK shop price inflation has eased to its lowest rate in more than a year as retailers compete to bring prices down for customers ahead of Christmas, raising hopes of some support for festive sales. Despite warnings that falling food inflation risks rising again next year as increases in the national living wage and business rates eat into margins, a recent survey suggests that consumer confidence is actually starting to improve. That said, markets more generally remain fixated on the path for interest rates and I can’t be the only one fed up with trying to predict what central banks are likely to do next. As such, I’m going to take a break this week and offer a few thoughts on the death last week of Berkshire Hathaway’s Vice Chairman Charlie Munger.
Alongside his investment partner Warren Buffet, Munger built the US conglomerate into one of the world’s most valuable companies. He was also instrumental in changing Buffet’s initial strategy of buying struggling companies cheaply regardless of their prospects, to instead buying wonderful businesses at fair prices. He mused earlier this year that you might only get a handful of long-term opportunities to buy great companies, so when offered the chance, he and Buffet would often back themselves heavily. I think we would all do well to remember that just because something looks cheap, it doesn’t always mean that it offers good value.
Munger also told attendees at the most recent Berkshire annual meeting, attended by over 30,000 shareholders, that the ‘best road to human happiness is to expect less. I think it’s going to get tougher.’ There is little doubt that 2023 has been another difficult year for investors, so I hope for all our sakes that on this point, at least in the short term, he will prove to be mistaken.
