• Friday, April 12, 2024
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10 things about Charlie Munger, Warren Buffett’s investment partner

Charlie Munger is a name that is synonymous with investing wisdom. As the vice chairman of Berkshire Hathaway, Munger has worked alongside Warren Buffett for over five decades, helping to shape the company into one of the most successful in history. Munger’s insights into business, psychology, and life have earned him the respect of investors and thinkers around the world.

Date of birth

The vice chairman Berkshire Hathaway was born January 1, 1924 and would have celebrated his centenary in January.

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Munger leaves behind a family that includes three children from his first marriage – Wendy Munger, Molly Munger, and the late Teddy Munger.

His second marriage with Nancy Barry resulted in four children: Charles T. Munger Jr., Emilie Munger Ogden, Barry A. Munger, and Philip R. Munger. Munger is also survived by two stepchildren:William Harold Borthwick and David Borthwick.

Life struggles

The successful investor has had his fair share of life’s turbulence. In 1953, at 29 years Munger lost his house to divorce, his eight year old son was diagnosed with cancer and eventually died a year later. At 52 a failed surgery left him blind in one eye with the potential to fully go blind eventually.

Nevertheless Munger was never caught loathing or wallowing in self pity, after being confronted with the possibility of going blind.

Rather he said “ It’s time for me to learn braille”.

Generally speaking, envy, resentment, revenge, and self-pity are disastrous modes of thought.

Self-pity gets pretty close to paranoia…,” he said

Every time you find yourself drifting into self-pity, I don’t care what the cause is, your child could be dying from cancer, self-pity is not going to improve the situation. It’s a ridiculous way to behave.

Life will have terrible blows, horrible blows, unfair blows, it doesn’t matter. Some people recover and others don’t.

Early Legal Career

Before law, Munger dropped out of college to join the military and participated in the World War. He started his career as a successful lawyer after the war before venturing into investing, where his legal expertise significantly contributed to his understanding of business and contracts, forming a crucial foundation for his investment strategies.

Meeting Warren Buffett

Forming a partnership with Warren Buffett brought together complementary skills and philosophies, resulting in extraordinary investment success.

In 1959, Warren Buffet met a couple while trying to sell an investment scheme. The couple told him “You sound just like Charlie Munger. You two must meet”. The couple organized a dinner just for the two of them. They met for the first time that year. A friendship blossomed.

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Charlie Munger’s net worth was estimated at $2.6 billion by Forbes, growing from $1.1 billion in 2014. His cautious outlook on the investment landscape, despite his and Berkshire’s successes, was evident in his belief that the opportunities they seized were unique to a particular time and set of circumstances

Berkshire Hathaway’s Growth

Playing a crucial role in Berkshire Hathaway’s evolution, his insights were instrumental in transitioning the company from a textile business to a massive conglomerate.

For 64 years, these duo have their partnership has produced a company worth over 700 billion dollars. And their investment advice has produced many more that cumulatively should be worth more than a trillion.

Investment style

Munger is a staunch advocate of value investing, a philosophy that emphasizes buying stocks for less than their intrinsic value. Intrinsic value is the estimated long-term worth of a company, based on its assets, earnings potential, and competitive advantages.

By focusing on intrinsic value, Munger and Buffett have been able to identify and invest in undervalued companies that have gone on to generate significant returns for Berkshire Hathaway shareholders.

“We want to buy something that’s intrinsically a very good business, meaning that an idiot could run it and it would do all right, ” quote by Munger.

A Witty and Engaging Speaker

Munger is a gifted speaker. He is known for his sharp wit and his ability to communicate complex ideas in a clear and concise way. Munger’s speeches and writings are a treasure trove of wisdom for investors and thinkers alike.

He is popularly known for his speech on “Psychology of Human Mismanagement to Harvard University students. The hour-long speech was about the framework of decision making and the factors contributing to misjudgment.

The speech is referred to as gold by investors.

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A Humble and Unassuming Man

Despite his wealth and success, Munger remains a humble and unassuming man. He is always willing to share his insights with others and is not afraid to admit his mistakes. Munger’s humility is one of the qualities that makes him so admired and respected.