Charlie Munger, the vice chairman of Berkshire Hathaway and the longtime partner of Warren Buffett, passed away on November 28, 2023, at the age of 99.
Munger was widely regarded as one of the most influential and successful investors of all time, as well as a generous philanthropist and a source of wisdom and wit.
He has always inspired me and I would like to celebrate his remarkable life and achievements and look at some of the quotes, decisions, and lessons that shaped his legacy.
Munger was born in Omaha, Nebraska, in 1924. He served in the U.S. Army Air Corps during World War II and later graduated from Harvard Law School. He practiced law and real estate development in California, where he met Buffett in 1959. The two became friends and eventually business partners, as Munger joined Berkshire Hathaway in the 1970s and became its vice chairman in 1978.
Munger was instrumental in the growth of Berkshire Hathaway, which became a $700 billion conglomerate with subsidiaries in various industries, such as insurance, railroads, energy, manufacturing, and retail. Munger also held positions at other companies, such as Wesco Financial, Daily Journal, and Costco.
He was known for his keen analytical skills, his multidisciplinary approach, and his long-term perspective. He often credited his success to his use of mental models, which are frameworks for understanding how the world works and making better decisions.
Munger was also a prolific writer and speaker, who shared his insights and opinions on various topics, such as investing, business, economics, psychology, ethics, and education. He was famous for his witty and candid remarks, which often challenged conventional wisdom and provoked thought. Here are some of his memorable quotes:
“The big money is not in the buying and selling … but in the waiting.”
“Knowing what you don’t know is more useful than being brilliant.”
“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.”
“In my whole life, I have known no wise people who didn’t read all the time – none … ZERO.”
“Opportunity comes to the prepared mind.”
“Whenever you think something or some person is ruining your life, it’s you. A victimization mentality is so debilitating.”
“A great business at a fair price is superior to a fair business at a great price.”
“I never allow myself to have an opinion on anything that I don’t know the other side’s argument better than they do.”
“Three rules for a career: 1) Don’t sell anything you wouldn’t buy yourself; 2) Don’t work for anyone you don’t respect and admire; and 3) Work only with people you enjoy.”
“The game of investing is one of making better predictions than other people. How are you going to do that? One way is to limit your tries to areas of competence. If you try to predict the future of everything, you attempt too much.”
“Great investing requires a lot of delayed gratification.”
“You don’t have to pee on an electric fence to learn not to do it.”
“It’s amazing how intelligent it is just to spend some time sitting. A lot of people are way too active.”
“The safest way to get what you want is to deserve what you want.”
“Take a simple idea and take it seriously.”
Munger also made some remarkable investing decisions, both for himself and for Berkshire Hathaway. Some of his most notable ones include:
Investing in Berkshire Hathaway itself, which he initially disliked as a textile company, but later appreciated as a vehicle for Buffett’s capital allocation. Munger reportedly bought 1,000 shares of Berkshire Hathaway in 1966 for $16,000, which would be worth over $400 million today.
Convincing Buffett to invest in See’s Candies, a high-quality business with strong brand loyalty and pricing power, in 1972. The $25 million investment has generated over $2 billion in profits for Berkshire Hathaway.
Leading Berkshire Hathaway’s investment in Chinese electric vehicle maker BYD in 2008, was a visionary bet on the future of clean energy and transportation. The $230 million investment is now worth over $6 billion.3
Buying shares of Daily Journal, a legal publisher, in 1977, and becoming its chairman. Under his leadership, the company expanded into software and online services and also invested its cash in stocks such as Wells Fargo, Bank of America, and U.S. Bancorp, which have appreciated significantly.
Investing in Costco, a leading warehouse retailer, in 1997, and joining its board of directors. Munger admired Costco’s culture, management, and value proposition, and called it “one of the most admirable capitalistic institutions in the world.”
Munger also made some mistakes and missed some opportunities, which he openly admitted and learned from. For example, he regretted not buying Google and Amazon when they were undervalued, and he called his investment in Alibaba “one of the worst mistakes I ever made.”4 He also acknowledged that he was wrong about some of his criticisms of Bitcoin, which he once called “rat poison squared.”
Munger’s death is a huge loss for the investing world, as well as for the many causes he supported with his philanthropy. He donated millions of dollars to various educational, scientific, and cultural institutions, such as the University of Michigan, Stanford University, Harvard-Westlake School, Huntington Library, and the Santa Barbara Museum of Natural History. He also funded the construction of student dormitories, academic buildings, and medical facilities. He was a strong advocate of rationality, integrity, and lifelong learning, and he inspired countless people with his example and his words.
Munger once said, “I would argue that passion is more important than brain power.” He certainly had both, and he used them to make a positive and lasting impact on the world. He will be remembered as a legendary investor, a philanthropist, and a mentor. He will be missed, but not forgotten.