Charlie Munger: The Influential Investor and Vice Chairman of Berkshire Hathaway
Charlie Munger, the longtime vice chairman of Berkshire Hathaway, was a fixture at the company’s annual shareholders meeting in Omaha, Nebraska. Sadly, the influential investor has passed away at the age of 99. Munger, alongside Warren Buffett, played a pivotal role in building Berkshire Hathaway into a multi-billion dollar conglomerate.
The Approach of a Value Investor
Known as a “value investor,” Munger had a penchant for buying stocks when their share prices were low relative to their fundamental value. However, he also recognized the importance of trusted brands and the value of growth. Over the years, Berkshire Hathaway made significant investments in well-known companies such as Kraft Heinz, Bank of America, and Coca-Cola. Their diverse portfolio included car companies, grocery stores, and insurers.
Charlie Munger: A Guiding Principle of Simplicity
Munger believed in keeping things simple. He once stated, “I can’t think of a single example in my whole life where keeping it simple has worked against us.” According to Munger, mistakes were made, but they were not a result of simplicity. His philosophy of simplicity guided his investment decisions and contributed to the success of Berkshire Hathaway.
A Unique Business Partnership
Munger grew up in Omaha, Nebraska, near Buffett’s childhood home. Their introduction was facilitated by a local physician, and they immediately formed a strong connection. Munger attended Harvard Law School and later founded the law firm Munger, Tolles & Olson in Los Angeles. While Buffett may be more well-known, Munger played a significant role in their exceptional business partnership.
Munger’s Influence and Wit
Munger’s straightforward nature and dry sense of humor endeared him to Berkshire Hathaway shareholders. At the company’s annual meetings in Omaha, Munger and Buffett would answer questions for hours. Buffett often provided lengthy responses, while Munger interjected with pithy remarks or one-liners, eliciting laughter from the audience.
Pushing Buffett to Consider Growth
According to Lawrence Cunningham, a law professor at The George Washington University, Munger was more than a sounding board for Buffett. He pushed Buffett to consider companies with growth potential and challenged ideas he deemed half-baked. Munger’s role extended beyond friendship, earning him the nickname “The Abominable No Man” from Buffett.
A Life of Simplicity and Principles
Munger spent much of his life in California, where he pursued various side projects. He owned and operated The Daily Journal, engaged in philanthropy, and even dabbled in architecture. Despite his success, Munger lived by a set of simple rules: avoiding resentment, not overspending, staying charitable, dealing with reliable individuals, and fulfilling responsibilities. He remained cautious and careful in his investment approach, steering clear of fads.
Charlie Munger’s impact on Berkshire Hathaway and the investment world as a whole cannot be overstated. His wisdom, inspiration, and participation were integral to the conglomerate’s success. Munger’s passing is a loss for the financial community, but his legacy will continue to shape the industry for years to come.