What Would Charlie Munger Say About SpaceX?
I really like Charlie Munger's talk The Psychology of Human Misjudgment. I've also been following the SpaceX story, before/during/after the IPO, and I can't help but imagine what Munger would think about this. It's safe to say he wouldn't be a buyer. Anyway, I thought it would be interesting to go down his list of 25 human misjudgments in that talk and see how many might apply to the SpaceX IPO.
Excluding the lollapalooza compounding effect, I came up with seven (well really six, plus two more that I thought half-applied). They are:
- Liking/loving tendency (1/2)
- Envy/jealousy tendency
- Influence-from-mere-association tendency
- Overoptimism tendency
- Social-proof tendency
- Contrast-misreaction tendency
- Availability-misweighing tendency
- Authority-misinfluence tendency (1/2)
- Lollapalooza tendency
Would be curious to hear what others think too.
I wrote a longer article going into detail on all this too. If you want to read, you can find it here.
Importantly, Munger's talk doesn't discuss other aspects like greed, simple speculative risk-taking, or fear of missing out. He describes these elsewhere in his writings/talks, just not in this article. It's definitely the case that those are all at play with SpaceX too.
