Billionaire Charlie Munger, the shrewd investor who made his own fortune before becoming Warren Buffett’s right-hand man at Berkshire Hathaway, died Tuesday at age 99. In addition to his position as vice chairman of Berkshire, Munger is also a real estate attorney, president, and publisher of Daily Journal Corp. a member of the Costco board of directors, a philanthropist, and an architect. As of early 2023, his fortune is estimated at $2.3 billion – a staggering figure for many but still much lower than Buffett’s unfathomable wealth, estimated at more than 100 billion USD.
At Berkshire’s 2021 annual shareholder meeting, Munger, then 97 years old, seemingly accidentally revealed a well-kept secret: that Vice Chairman Greg Abel would “keep the culture” after the era of Buffett. Munger, who wore thick glasses, lost his left eye after complications from cataract surgery in 1980. Munger served as chairman and chief executive officer of Wesco Financial from 1984 to 2011, when Berkshire Buffett purchased of the remaining shares of the California-based insurance company Pasadena. and investment company. the company does not belong to him.
Buffett credits Munger for broadening his investment strategy from favoring struggling companies at low prices in the hope of shifting profits to focusing on higher quality but undervalued companies. short An early example of this change was illustrated in 1972 by Buffett’s ability to convince Berkshire to buy See’s Candies for $25 million, even though the California candy maker had pre-tax profits. annually “only about 4 million USD”. Since then, Berkshire’s revenue has reached more than $2 billion. “He got me away from the idea of buying very mediocre companies at very low prices, knowing that it made a small profit, and finding really great companies that we could Buy at the right price,” Buffett said. in May 2016. Or as Munger said at Berkshire’s 1998 shareholder meeting: “It’s no fun buying a company and really hoping that the idiot will liquidate it before it goes bankrupt. ”
Munger has often been outspoken in his objections to Buffett’s lighthearted comments. “I have nothing more to say,” he said after one of Buffett’s lively answers to questions at Berkshire’s annual meeting in Omaha, Nebraska. But like his friend and colleague, Munger is a fountain of wisdom in investing and life. And like one of his heroes, Benjamin Franklin, Munger’s insight was not without humor. “I have a friend who says the first rule of fishing is to fish where the fish are. The second rule of fishing is to never forget the first rule. We have become good at fishing where the fish are,” Munger, then 93, told thousands of people at a meeting in Berkshire in 2017. He believed in what he called the “lollapalooza effect,” in which the combination of many factors combine to promote investment psychology.
A child of the heartland
Charles Thomas Munger was born in Omaha on January 1, 1924. His father, Alfred, was a lawyer and his mother, Florence “Toody,” came from a wealthy family. Like Warren, Munger worked at Buffett’s grandfather’s grocery store as a young man, but it wasn’t until many years later that the two future partners met. At age 17, Munger left Omaha for the University of Michigan. Two years later, in 1943, he joined the Army Air Corps, according to the biography “Damn! ” by Janet Lowe in 2003.
The Army sent him to the California Institute of Technology in Pasadena to study meteorology. In California, he fell in love with Nancy Huggins, his sister’s roommate at Scripps College, and married her in 1945. Although he did not complete his undergraduate degree, Munger graduated with honors from Harvard Law School in 1948, and the couple returned. to California, where he practiced real estate law. He founded the law firm Munger, Tolles & Olson in 1962 and focused on managing the investments of hedge fund Wheeler, Munger & Co. which he also founded that year. “I’m proud to be an Omaha guy,” Munger said in a 2017 interview with Michigan Ross School of Business Dean Scott Derue. “Sometimes I use the old adage: ‘They took the boy out of Omaha but they never took Omaha out of the boy. ‘ All these outdated values: family first; can help others when problems arise; careful, sensitive; The moral obligation to be reasonable [is] more important than anything else – more important than being rich, more important than being important – an absolute moral obligation.
In California, he partnered with Franklin Otis Booth, a member of the Los Angeles Times founding family, in the real estate business. One of their first developments turned out to be a lucrative apartment project on Booth’s grandfather’s land in Pasadena. (Booth, who died in 2008, was introduced to Buffett by Munger in 1963 and became one of Berkshire’s largest investors. ) “I have five real estate projects,” Munger told Derue. “I did both for a few years and within a few years, I had $3 to $4 million. ” Munger closed his hedge fund in 1975. Three years later, he became vice chairman of Berkshire Hathaway.