Did Charlie Munger's stance on TMT investments ever change?

Okay, let's talk about this topic.

Charlie Munger on TMT: Not a Revolution, but an Evolution with the Times

Simply put, the answer is: Yes, his views have clearly evolved, but this is not a betrayal of his past principles; it's the application of his investment wisdom to a new era.

We can understand his perspective more clearly by dividing it into two phases.

Phase One: The Classic "Old-School" Munger (Approx. Pre-2010)

For a long time, Munger and Buffett maintained a "respectful distance" from tech stocks (the core of TMT). Imagine a seasoned carpenter being asked to evaluate the latest AI chip; he might shake his head and say, "This thing is too complex, I don't understand it, I won't touch it."

Munger avoided tech stocks back then for several key reasons:

Too Fast-Changing, Future Unclear: The tech industry moves incredibly fast; today's leader could be disrupted tomorrow (e.g., Nokia, Yahoo). This didn't fit Munger's "buy-and-hold-forever" philosophy. He preferred companies with business models stable for decades, like Coca-Cola – it's easy to imagine people still drinking Coke in 50 years, but hard to imagine what phone they'll be using.
Outside His "Circle of Competence": Munger famously advocates staying within one's "circle of competence" – investing only in businesses one thoroughly understands. He admitted he didn't understand the technology or business models of many high-tech companies. For him, it was wiser to pass than pretend to understand.
Valuation Too "Ethereal": Many tech companies, even in their early or middle stages, lacked stable profits. Their stock prices were often propped up by "price-to-dream ratios" (dreams of the future). To Munger, who valued tangible cash flow and profits, this felt like gambling.

So, during this phase, if you asked Munger about tech stocks, he'd likely say: "Too hard. We pass. We look for easier things to do."

Phase Two: The Evolving "New" Munger (Approx. Post-2010)

Over time, things changed. It wasn't that Munger changed; rather, some tech companies evolved into the kind of businesses Munger liked.

His evolving views are mainly reflected in these points:

1. Some Tech Companies Are No Longer Purely "Tech Stocks"

The prime example is Apple.

When Berkshire Hathaway (Munger and Buffett's company) made Apple a major holding, many were stunned. But Munger later explained that they saw Apple not just as a tech company, but more like a consumer products company with a top-tier brand.

Powerful "Economic Moat": Apple's iOS ecosystem (App Store, iCloud, etc.) created a massive "economic moat." Once users were in, it was hard to leave. This user stickiness was similar to the "razor-and-blades" model he admired in companies like Gillette.
Power of the Brand: The Apple brand held a place in consumers' minds like Coca-Cola – a symbol of identity and quality.
Enhanced Predictability: Apple's business became more predictable. It wasn't just betting on the next iPhone hit; it made money from services tied to its vast user base.

So, Munger didn't suddenly fall in love with "tech." He recognized that Apple possessed the traits he always sought: a powerful brand, a wide economic moat, and a relatively predictable future.

2. He Focused on the "Business Essence" Behind the Technology

Another prime example is BYD, an investment Munger strongly advocated for.

BYD is undeniably a technology-driven company. But what Munger valued wasn't just its battery or EV technology. He focused on:

Founder Wang Chuanfu: Munger described Wang as a "combination of Thomas Edison and Jack Welch" (GE's legendary CEO) – a business genius excelling in both technology and management. This is core to Munger's philosophy: investing in exceptional managers.
Engineering Culture: BYD's strong engineering capabilities and execution in solving practical problems represented, in Munger's view, a very deep "economic moat."

His investment in BYD was more about backing a powerful organization led by geniuses capable of solving complex technical problems, rather than betting on a single technology.

3. Acknowledging a Changed World: New Forms of Moats

Munger and Buffett have publicly admitted missing out on Google and Amazon. They later realized that in the internet age, "network effects" and "platform scale" could create economic moats wider than those in traditional industries.

Once everyone uses Google Search, competitors have little chance. Once Amazon's e-commerce platform and logistics network are established, catching up is extremely difficult. These technology-built barriers can be even more formidable than traditional brand moats.

To Summarize

So, to answer your question: Charlie Munger's investment views on the TMT sector have indeed changed, but what changed was the "object of observation," not the "criteria for observation."

His core investment philosophy – investing in excellent businesses he understands, possessing wide economic moats, and run by outstanding managers – has never wavered.

What changed is that, over time, some companies within the TMT sector evolved and successfully entered this "framework of criteria."

Think of him as a master fisherman who used to only fish in familiar rivers. Later, he saw some fish in the ocean (like the "big whale" Apple) swimming steadily and growing large, and he understood their patterns. So, he was willing to venture out to sea. But he used the same time-tested, ancestral fishing techniques; he didn't change his approach.