Charles Munger, who left a well-established law career to become Warren Buffett's partner and turned a New England textile company into an extraordinarily successful investment company, Berkshire Hathaway, died in California.
He was 99 years old. Munger's death in the hospital was announced by Berkshire Hathaway. Although overshadowed by the spotlight-loving Buffett, Munger, a billionaire in his own right, wielded far more influence at Berkshire than his vice-chairman title. Forbes estimates Munger's fortune at $2.6 billion.
Creator of Berkshire's investment approach
Buffett described him as the creator of Berkshire Hathaway's investment approach. "The plan he gave me was simple: Forget what you know about buying fair businesses at great prices; instead, buy great businesses at fair prices," Buffett said of Munger in an annual report. This investment strategy was a revelation for Buffett, who made his name buying troubled companies at deep discounts in the 1950s. At the time, Buffet called these companies "cigar butts" because he said investing in them was like "picking up a discarded cigar butt with only a breath left in it."
Charles Thomas Munger (January 1, 1924 – November 28, 2023) was an American businessman, investor, and philanthropist. He was vice chairman of Berkshire Hathaway, the conglomerate controlled by Warren Buffett; Buffett described Munger as his closest partner and right-hand man. Munger served as chairman of Wesco Financial Corporation from 1984 through 2011. He was also chairman of the Daily Journal Corporation, based in Los Angeles, California, and a director of Costco Wholesale Corporation.
Munger advised Buffett that if he wanted to build a large, sustainable company that would outperform other investors, he needed to buy solid brand companies. "He was the architect, I was the general contractor," Buffett said of their relationship. Over a period of more than 50 years, this partnership created one of the most successful and largest conglomerates in history. Headquartered in Nebraska, Berkshire owns insurance giant Geico and the Burlington Northern Santa Fe railroad, among other properties, and has stakes in Coca-Cola, American Express, IBM, Wells Fargo, and other heavyweights. As of 2022, it had approximately 372 thousand employees.
"Think again, you will agree with me"
Buffett and Munger talked on the phone for hours every day; Buffett from his office in Omaha, Munger from Los Angeles. "We never argued," Buffett said. Repeating one of Munger's favorite quotes, Buffett said that when they thought differently, Munger said, "Warren, think again and you'll agree with me because you're smart and I'm right."
Buffett and Munger were the faces of Berkshire's annual meeting in Omaha, known as the Woodstock of Capitalism. They would answer questions and impart investment wisdom for up to six hours in front of tens of thousands of curious Berkshire shareholders. "The problem with making all these statements is that people gradually start to think they know something. It's much better to think you're ignorant. If people weren't wrong so often, we wouldn't be so rich," Munger advised an audience in 2015.
"First trust, then talent"
Many of these listeners have become substantially richer by investing with Buffett and Munger. A thousand-dollar investment in Berkshire in 1964 is worth more than $10 million today. Munger is often seen as Berkshire Hathaway's moral compass, advising Buffett on personnel matters as well as investments. Recruitment policy: Trust first, talent second.
Son of a lawyer
Charles Thomas Munger was born on January 1, 1924, in Omaha, the son of attorney Alfred Case Munger and Florence (Russell) Munger. As a child, he worked Saturdays at a grocery store owned by Buffett's grandfather. Buffett also worked there for a while, but the two met much later. At 17, Charles went to the University of Michigan to study mathematics, but during his sophomore year, after the attack on Pearl Harbor, he enlisted in the Army Air Corps.
After being promoted to lieutenant, he was sent to the California Institute of Technology in Pasadena to train as a meteorologist. In Pasadena, he met Nancy Huggins, the daughter of a local shoe store owner, and they married when he was 21 and she was 19. They had three children. Munger was soon assigned to Alaska, where he honed his skills. Munger appeared in Janet Lowe's 2000 episode of Damn Right! "Playing poker in the army and as a young lawyer honed my business skills," he said in his book Behind the Scenes with Berkshire Hathaway Billionaire Charlie Munger. "What you have to learn is to fold early when the odds are against you," he said. "Or if you have a big advantage, do it strongly." back it up in some way, because it's not often you get a big advantage, so grab it when it comes.
Before being discharged from the army in 1946, Munger, who once said he had a black belt in arrogance, applied to his father's alma mater, Harvard Law School, despite his erratic study habits and lack of a bachelor's degree. It was accepted only after the intervention of Nebraskan Roscoe Pound, the retired dean of the school and a family friend. After graduating with honors, Munger returned to California and began practicing law. He eventually founded the law firm Munger, Tolles & Olson. However, his life also changed during the same period. He and his wife divorced; Their only son, Teddy, died of leukemia at age 9; and suffered financial setbacks.
He earned his first million dollars
Seeking to rebuild his life at the time, Munger began investing in stocks, businesses, and real estate, taking advantage of his supernatural mathematical skills. Munger said of this period, "I soon realized that I would rather be one of our rich and interesting clients than a lawyer." His investments brought in his first million dollars.
Munger married Nancy Barry Borthwick in 1956 and met Buffett by chance three years later. When Munger returned to Omaha to organize his recently deceased father's affairs, he was invited to lunch at the local Omaha Club. There he was introduced to Buffett by a mutual friend. Later that week, Munger attended a dinner party to which Buffett was also invited. They got along very well and spent the evening talking. Buffett describes what happened next with these words: He was rolling on the floor laughing at his own jokes, and I thought, 'That's my type.' I'm doing the same thing.
"The passion to be rich"
The two soon found themselves talking on the phone almost every day about investment strategies. Munger had previously described this period by saying, "It was clear that Warren had a better business model than I did," referring to his billing by the hour for legal services. “He kept telling me that I had a crazy way to make a living, that his way was better, and that I should do what he did,” Munger said.
Munger was convinced. In Roger Lowenstein's book Buffett: The Making of an American Capitalist (1995), Munger is quoted as saying, "Like Warren, I had a considerable ambition to be rich. Not because I wanted a Ferrari, but because I wanted independence. I wanted it desperately. I had to send bills to other people." "I thought it was humiliating to stay," he said.
Munger began investing alongside Buffett at companies such as Westco Financial and See's Candies before officially joining Buffett in the role of vice chairman. “I kept one foot in the law firm in case my capitalist career went into crisis,” he said of the first year. Together they built Berkshire into a juggernaut worth more than $500 billion, with its shares averaging 21.6 percent annual gains from 1965 to 2014, more than double the Standard & Poor's 500's 9.9 percent rise.
Buffett has continued to be a vocal advocate of philanthropy through the Giving Pledge, an organization he founded with Bill and Melinda Gates to persuade billionaires to donate at least half of their wealth. However, it was noteworthy that Munger was not included in the list. Stating that this was not about not wanting to make a commitment, Munberg said that his wife Nancy, who died in 2010 at the age of 86, wanted half of the inheritance to pass to her children, and "I did that in spades." He added: “I thought it would be hypocritical for me to make a big commitment. I had already completely violated the spirit of the work.
Munger's two daughters from his first marriage, Wendy and Molly Munger; a daughter from his second marriage, Emilie Munger Ogden; three sons from this marriage, Charles Jr., Barry, and Philip; two stepsons, William, and David Borthwick; He has 15 grandchildren and seven great-grandchildren.