OMAHA, Neb. (AP) — Charlie Munger, who helped Warren Buffett turn Berkshire Hathaway into an investment powerhouse, has died in a California hospital. He was 99.
Berkshire Hathaway said in a statement that Munger’s family had informed the company that he died in the hospital Tuesday morning, just over a month shy of his 100th birthday.
“Berkshire Hathaway could not have been built to its current status without Charlie’s inspiration, wisdom and involvement,” Buffett said in a statement. The famous investor also dedicated a portion of his annual letter to Berkshire shareholders earlier this year to a tribute to Munger.
Munger served as a catalyst for Buffett’s investments and business decisions, helping Berkshire for more than five decades and serving as its longtime vice chairman.
Munger had been using a wheelchair to get around for several years, but he remained mentally fit. That was evident when he spoke at the annual meetings of Berkshire and the Daily Journal Corp. Answering hours of questions earlier this year and in recent interviews on an investment podcast and with the Wall Street Journal and CNBC.
Munger preferred to stay in the background and let Buffett be the face of Berkshire, and he often downplayed his contribution to the company’s remarkable success.
But Buffett always praised Munger for pushing him beyond his initial value investing strategies to buy great companies at good prices like See’s Candy.
“Charlie taught me a lot about business appreciation and human nature,” Buffett said in 2008.
Buffett’s early successes were based on what he learned from former Columbia University professor Ben Graham. He bought shares of companies that were selling for less than their assets were worth and then sold the shares when the market price improved.
Munger and Buffett began buying Berkshire Hathaway stock in 1962 at $7 and $8 per share, respectively, and took control of the New England textile mill in 1965. Over time, the two men used the proceeds from their businesses to transform Berkshire into the conglomerate it is today, buying other companies like Geico Insurance and BNSF Railroad while maintaining a high-profile stock portfolio with large investments in Apple and Coca-Cola. Shares rose to $546,869 on Tuesday, with many investors getting rich by holding the stock.
Munger gave an extensive interview to CNBC earlier this month in preparation for his 100th birthday, and the business broadcaster showed excerpts from this Tuesday. In his characteristic self-deprecating style, Munger summed up Berkshire’s secret to success as avoiding mistakes and continuing to work well into his and Buffett’s 90s.
“We became a little less crazy than most people and a little less stupid than most people, and that really helped us,” Munger said. In a special letter he wrote in 2014 to mark his 50th year leading the company, he went into more detail about the reasons for Berkshire’s success.
Throughout their collaboration, Buffett and Munger lived more than 1,500 miles apart, but Buffett said he would call Munger in Los Angeles or Pasadena to consult on any major decision he made.
“He will be greatly missed by many, perhaps none more so than Mr. Buffett, who relied heavily on his wisdom and advice. I was jealous of their friendship. They challenged each other but really seemed to enjoy being in each other’s company,” said Jim Shanahan, an analyst at Edward Jones.
Berkshire will likely cope without Munger, said Cathy Seifert, an analyst at CFRA Research, but there is no way to replace the role he played. After all, Munger may have been one of the few people in the world willing to tell Buffett he was wrong about something.
“I think the most noticeable impact will be in the next few years when Buffett goes without him,” Seifert said.
Munger grew up in Omaha, Nebraska, about five blocks from Buffett’s current home, but because Munger is seven years older, the two men did not meet as children, even though both worked at the grocery store that Buffett’s grandfather and uncle ran.
When the two men met at a dinner party in Omaha in 1959, Munger was practicing law in Southern California and Buffett was running an investment partnership in Omaha.
Buffett and Munger hit it off at that first meeting and then remained in touch through frequent phone calls and long letters, according to the biography in the definitive book about Munger, “Poor Charlie’s Almanack: The Wit and Wisdom of Charles T. Munger.” .
The two men shared investment ideas and occasionally took stakes in the same companies in the 1960s and 1970s. They became the two largest shareholders in one of their joint investments, private label maker Blue Chip Stamp Co., thereby acquiring See’s Candy, Buffalo News and Wesco. Munger became vice chairman of Berkshire in 1978 and chairman and president of Wesco Financial in 1984.
Berkshire’s legions of devoted shareholders, who regularly packed the arena in Omaha to hear the two men speak, will remember the grumpy jokes Munger made as he answered questions alongside Buffett at annual shareholders’ meetings.
Munger was known to repeat, “I have nothing to add,” after many of Buffett’s lengthy answers at Berkshire meetings. But Munger also often delivered insightful answers that got to the heart of a problem, such as his 2012 advice on how to spot a good investment.
“If there’s a really high commission, don’t look at it,” he said.
Investor Whitney Tilson has attended Berkshire Hathaway’s annual meetings for the past 26 years to learn from Munger and Buffett, who shared life lessons as well as investing tips. Tilson said Munger said that after some success, “your whole approach to life should be don’t screw it up and don’t lose what you have,” because reputation and integrity are the most valuable assets, and both can be lost Heartbeat.
“It’s the same in the investment world as it is in your personal world. Your main goal should be to avoid catastrophic mistakes that could destroy an investment balance and a life,” Tilson said.
Munger famously humorously summarized this advice by saying, “I just want to know where I’m going to die so I never go there.”
Munger was known as a voracious reader and student of human behavior. To evaluate potential investments, he used various models from disciplines such as psychology, physics and mathematics.
Munger studied mathematics at the University of Michigan in the 1940s, but dropped out of college to serve as a meteorologist in the Army Air Corps during World War II.
He then earned a law degree from Harvard University in 1948, although he had not yet completed an undergraduate degree. He co-founded a Los Angeles law firm that still bears his name, but soon decided he preferred investing.
Munger once built a fortune worth more than $2 billion and secured a place on the list of the richest Americans. Munger’s wealth declined over time as he gave away more of his wealth, but the ever-increasing value of Berkshire’s shares kept him rich.
Munger has made significant donations to Harvard-Westlake, Stanford University Law School, the University of Michigan and the Huntington Library, and other charities. After his wife’s death in 2010, he also gave away a significant portion of his Berkshire shares to his eight children.
Munger also served on the boards of Good Samaritan Hospital and the private Harvard-Westlake School in Los Angeles. And Munger was on the board of Costco Wholesale Corp. and for years chairman of the Daily Journal Corp.
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