Warren Buffett confidant Charlie Munger dies at 99

2023-11-29 07:58:53

According to his family, Munger died early Tuesday in a hospital in California at the age of 99, a statement said. In it, Buffett said Berkshire could not have achieved its current status “without Charlie’s inspiration, wisdom and contribution.”

Munger had been vice chairman of the investment company run by Buffett since 1978. Munger would have been 100 years old on January 1st. His connection to Buffett dates back to his youth, when he worked for his grandfather at a grocery store in Omaha, Nebraska. Munger served as a meteorologist during World War II and earned a law degree from Harvard Law School in 1948. From his work as a lawyer, he turned to stock and real estate trading in the mid-1960s. His investment company Wheeler, Munger & Co was doing well. The partnership with Buffett, which would become one of the most successful in investment history, formally began in 1975.

Met in Omaha in 1959

According to Buffett biographer Alice Schroeder, the two men first met in Omaha in 1959. After a performance, they fell into a deep conversation in the private room of a restaurant, which was followed by hours of phone calls. Munger’s second wife, Nancy, reportedly asked him why he was spending so much time with Buffett. “You don’t understand,” Munger replied. “This is no ordinary person.” Both men shared economist Benjamin Graham’s investment philosophy, which is summarized as “value investing.” This involves looking for well-managed companies whose shares are undervalued.

According to Buffett, it was Munger who convinced him to look at companies whose stocks were correctly valued. “Charlie made me not just buy bargains like Ben Graham taught me,” Buffett said. “It was the power of Charlie’s mind. He broadened my horizons.” In a letter to shareholders from 1989, Buffett expressed this with a now famous English pun on the meaning of the word “fair” – “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price” – and wrote this Munger admits: “Charlie caught on early; I was a slow student.”

Bitcoin is “rat poison”

Munger’s choice of words was coarser in comparison. He compared bankers to “heroin addicts” and called the cyber currency Bitcoin “rat poison.” About gold, he told CNBC: “Gold is a great thing to sew into your clothes if you’re a Jewish family in Vienna in 1939. But I think civilized people don’t buy gold. They invest in productive companies.” He was similarly direct about Berkshire. Part of the group’s popularity is probably due to “the fact that we look like people who have found a trick,” said Munger in 2010. However, it is not a matter of genius: “It’s just avoiding stupidity.” He also commented on artificial intelligence this year. Munger said he was skeptical of the hype. “I think old-fashioned intelligence works pretty well.”

Nancy Munger died in 2010, Charlie Munger was a father of six and grandfather of two. Experts did not expect any major consequences for Berkshire’s business. Overseeing day-to-day operations is two additional vice chairmen, Greg Abel and Ajit Jain. Abel is expected to become CEO when Buffett, now 93, is no longer at the helm. “I don’t think Berkshire will look much different, other than Buffett no longer being able to exchange ideas with Munger,” said Thomas Russo of Gardner Russo & Quinn in an initial reaction to Munger’s death. “Berkshire might be a little less fun without him.”