‘Never Underestimate the Man Who Overestimates Himself’

Elon Musk shared a throwback on X, recalling a 2009 lunch where legendary investor Charlie Munger told a table full of people that Tesla was destined to fail. Musk, always blunt about Tesla’s early struggles, admitted at the time that the odds were stacked against the company.

But despite Munger’s doubts, Musk pushed forward. Years later, even Munger had to admit that Tesla’s success was nothing short of a “minor miracle.”

Yet, for all his skepticism about Tesla, Munger wasn’t against all electric vehicles. In fact, he was one of the biggest advocates for BYD, a Chinese EV and battery manufacturer that Berkshire Hathaway backed. Munger raved about BYD’s achievements, calling it his “best investment” shortly before his death in 2023.

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Munger’s views on Musk were always a mix of admiration and caution. At the 2014 Daily Journal shareholders meeting, he acknowledged Musk’s intelligence but also pointed out his tendency to push the limits of reality.

“He’s a genius, and I don’t use that word lightly,” Munger said. “He’s also one of the boldest men who ever came down the pike. So put me down as saying I’ve always been afraid of the guy whose IQ is 190 and he thinks it’s 250.” He elaborated,  “I like to think there’s a little of that risk with Elon. He is a certified genius.”

By 2020, Munger hadn’t changed his stance much. At the Daily Journal shareholders meeting that year, he made it clear that while he wouldn’t bet against Musk, he wasn’t buying Tesla stock either. “My thoughts are two,” Munger said. “I would never buy [Tesla], and I would never sell it short.”

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Then came his now-famous warning: “Never underestimate the man who overestimates himself.”

Munger acknowledged that Musk’s confidence bordered on delusion—but sometimes, those delusional thinkers change the world.

If Munger was so skeptical of Tesla, why was he all-in on BYD? In short, he saw BYD as a company with strong fundamentals, disciplined leadership, and a clear business strategy.