Charles Munger, the partner, friend and most loyal ally of investment guru Warren Buffett, died this Tuesday in a hospital in Santa Barbara (California), Berkshire Hathaway reported in a statement. The 99-year-old Munger lived in Los Angeles and was the company’s vice president, but he was much more than his right-hand man and number two in the company. “Without Charlie’s inspiration, wisdom and commitment, Berkshire Hathaway could not have achieved its current status,” Buffett said in the statement.
Munger, a joker and fan of playing cards, appeared every year with Buffet at Berkshire Hathaway’s annual meeting in Omaha, a city of 475,000 in the state of Nebraska, not far from the geographical center of the United States, which has been called the Woostock of capitalism. The meeting turned into a spectacle where they shared their investment and life philosophy with humor and without mincing words.
The last time the two were together was last May. Thousands of capitalism’s pilgrims came from all over the world to hear the teachings of the Oracle of Omaha, knowing full well that they did not have many options left. It remains to be seen whether Buffett will stick to these long question-and-answer sessions on a variety of topics that have excluded politics, or at least partisan politics.
At that last meeting in May, Buffett explained how to live by the obituary you want, or whether artificial intelligence will decide where you invest in the future, and he joked, as he always did, with his partner. “When I woke up this morning I realized there was a competing show somewhere in the United Kingdom,” Buffett said, referring to the coronation of Charles III, which took place that same day. “They celebrated a King Charles, and we have our own King Charles here today,” Buffett said, pointing to his partner and Berkshire Hathaway vice chairman Charlie Munger.
Plus, because of the banking crisis, they made another financier-only joke about his age. With a bit of black humor, a kind of identification mark was placed in front of it, which instead of the name said “available for sale” for Buffet and “held until maturity” for Munger. These are two key concepts in the recent banking crisis, and the word “maturity” also means “maturity” in English.
Until his death, Munger remained a director of Berkshire Hathaway, the company that over six decades helped him grow from a declining textile maker into an empire worth nearly $800 billion.
“It’s great to have a partner who tells you, ‘You’re not thinking clearly,'” Buffett said of Munger, sitting next to him at the 2002 Berkshire meeting, Bloomberg recalls. “That doesn’t happen very often,” Munger chimed in. Too many CEOs surround themselves with “a bunch of sycophants” who are reluctant to challenge their conclusions and biases, Buffett added. For his part, Munger said Buffett benefited from “having someone to talk to who knew something.” “And I think I was very useful in that regard,” he added.
Berkshire Hathaway Chairman Warren Buffett (left) and Vice Chairman Charlie Munger at the company’s 2019 shareholder meeting in Omaha, Nebraska. Scott Morgan (Portal)
At these meetings they sometimes seemed like children making jokes, sometimes sullen, always complicit and with their own criteria. They denigrated cryptocurrencies at the 2022 meeting before their bubble burst. They did not recommend any specific actions, but provided ideas and shared wisdom. They always came over with a Coca-Cola. The company’s vice president’s advice, called Mungerisms, has been collected and edited for years.
Munger was instrumental in changing Warren Buffett’s original investment philosophy, which was more geared toward bargain hunters. Although he continued to be guided by the philosophy of the company’s intrinsic value in relation to price, the approach became different thanks to his partner: “The model he gave me was simple: ‘Forget what you know about buying sensible companies at reasonable prices. Wonderful; Instead, it buys wonderful companies at reasonable prices,” Buffett acknowledged in a letter to shareholders on the 50th anniversary of his purchase of Berkshire Hathaway. The group owns companies such as insurance company Geico and is a leading shareholder in Apple, Coca-Cola, American Express, Bank of America, Chevron and many other companies.
The Berkshire Hathaway shareholders meeting in May 2015. Nati Harnik (AP)
A lawyer by training, Munger also worked with Buffett, seven years his junior, to develop a long-term investment philosophy in companies. Under his leadership, Berkshire averaged an annual gain of 20.1% between 1965 and 2021, almost twice as much as the S&P 500 index. Decades of overall profitability made the company one of the most profitable in the world and made the couple billionaires and heroes to the investors who adored them.
Munger was Berkshire’s vice chairman and one of its largest shareholders, whose shares were worth about $2.1 billion as of March 2, 2022. According to Bloomberg, his total net worth was about $2.5 billion as of early 2023.
He was born in Omaha on January 1, 1924, and as a teenager worked at Buffett & Son, a grocery store owned by Warren Buffett’s grandfather. After enrolling at the University of Michigan, where he chose mathematics because it seemed easy, he never returned to Omaha to live. In early 1943, at the age of 19, he left university to join the Air Force. He continued his studies at various universities and enrolled at Harvard Law School, where he graduated magna cum laude in 1948.
He moved to California to work at a law firm in Los Angeles, but when he realized he wouldn’t get rich there, he began working on construction projects and real estate ventures. He founded a new law firm, Munger, Tolles & Hills, and in 1962 founded an investment company, Wheeler, Munger & Co, inspired by those that Buffett had founded with his early investors in Omaha.
Munger and Buffett met in 1959 when the former visited Omaha. Buffett was 28 and Munger was 35. The doctor who introduced them thought they would get along well, and he was right. They hit it off immediately and began investing together, talking on the phone almost every day. His investments in Berkshire Hathaway began in 1962 when the company made linings for men’s suits in textile mills in Massachusetts. Buffett acquired majority ownership in 1965. Although the factories closed, Berkshire remained the corporate vehicle for Buffett’s growing business conglomerate.
“If you have attended our annual meetings, you know that Charlie has great brilliance, an amazing memory and some strong opinions,” Buffett said in 2015. “I’m not exactly a wavering man, and sometimes we disagree. However, in 56 years we have never argued. When we disagree, Charlie often ends the conversation by saying, “Warren, think about it and you’ll agree with me because you’re smart and I’m right.”
Follow all information Business And Business on Facebook and Xor in our weekly newsletter
The five-day agenda
The most important business quotes of the day, with the keys and context to understand their significance.
RECEIVE IT IN YOUR EMAIL