Charlie Munger, the legendary investor, said that levels of excess in the stock market are worse now than they were during the dotcom era, as he reiterated his contempt for cryptocurrencies while praising China's efforts to kerb excessive speculation.

The 97-year-old investor and polymath who has been Warren Buffett's trusted sidekick for decades discussed markets, investing, and geopolitics during a wide-ranging interview broadcast as part of the Sohn Hearts & Minds Investment Conference.

He stated that the current environment was "more extreme" than any he had previously encountered.

"The dotcom boom had even crazier valuations than we have now, but I consider this era to be even crazier than the dotcom era," he said.

"You have to pay a premium for good companies, which reduces your future returns," he explained to Dr Mark Nelson of Sydney hedge fund Caledonia, who interviewed him for the charity conference.

The United States is inferior to China

Mr Munger stated that China was behaving maturely with its policy changes, despite investor anxiety over impending property defaults and stock price declines for Alibaba, Tencent, and Didi.

"They are correct to step out, to step hard on booms, and to avoid allowing them to travel too far. To the extent that my country does not do so, we fall short of China."

"They're behaving more maturely," he observed. "They were correct to take such a strong stance against corruption."

Mr Munger also defended China's stance on cryptocurrencies, which he wishes had never been invented.

"The Chinese made the correct decision in banning them," he said.

Millennials are 'extremely peculiar.'

"I want to earn money by selling people healthy products, not unhealthy ones."

"Believe me, those who invest in cryptocurrencies do not think about the customer; they think about themselves. Simply observe them. I'd prefer that none of them marry into my family."

Mr Munger, who is renowned for his candour and candour, explained to Dr Nelson that the world was very different from the one he was accustomed to and that he thought American Millennials were "very peculiar."

"I'm not sure how they are in Australia, but they are very peculiar here: extremely self centered and leftist," he explained.

Bezos vs. Musk

Mr Munger expressed admiration for Tesla CEO Elon Musk, whom he described as gifted and aggressive.

"He believes he is more capable than he is, and that has aided him," Mr Munger advised Dr Nelson, advising him to "never underestimate the man who overestimates himself."

Mr Musk has surpassed Warren Buffett and Amazon founder Jeff Bezos in terms of wealth. Mr Munger praised Mr Bezos for his brilliance, diligence, and fanaticism, but he warned that Amazon faced a threat from what appears to be his favourite company: big box retailer Costco.

"Amazon may have more to fear from Costco than Costco has from Amazon in terms of retailing.

"Costco will eventually be a major player on the internet. The public trusts it, and they wield considerable purchasing power."

Currency distrust

Mr Munger will celebrate his 98th birthday on New Year's Day. He has served on the Berkshire Hathaway board of directors since 1978, during which time the company's assets have increased from $US220 million to $US460 billion. He was persuaded to take part in the Sohn Hearts & Minds event due to its commitment to medical research.

Mr Munger admitted that he was unsuited to venture capital investing and could never have replicated the success of firms such as Sequoia Capital, which he described as having one of the best investment track records in the world.

"I have no idea how they do it. "I consider it a minor miracle," he explained.

Mr Munger was also questioned about his views on inflation, and he stated that over the next 100 years, almost any currency's value would be worthless.

"For the first time in over a century, I have lost faith in any currency issued anywhere in the world. It is natural for currency's purchasing power to decline. If you're a government, your best hope is for slow inflation."

Mr Munger stated that he had always sought value in businesses but had shifted his focus to "the great companies."

"That is especially difficult for me because great companies come at a high cost.

"You want companies with a high return on capital and a sustainable competitive advantage, and if you can add that they have good management rather than bad management, that's an added bonus."

"However, you'll discover that the world's great companies have been discovered. They're prohibitively expensive to purchase."

The high valuations of good companies meant that the cost of making mistakes had increased, as evidenced by Kodak's demise.

"Kodak was an exemplary company that dominated the world for a long period of time. In essence, your shareholders' claims have been cancelled.

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