Charles (Charlie) Thomas Munger, an American businessman, a legend of the investing world, philanthropist, and vice chairman of Berkshire Hathaway, died on 28th November at the age of 99. Warren Buffet, who controlled the Berkshire Hathaway conglomerate, described Mr Munger as his closest partner and right-hand man.
In a statement following Mr Munger's death, Mr Buffett said, "Berkshire Hathaway could not have been built to its present status without Charlie's inspiration, wisdom and participation.”
Mr Munger served as chairman of Wesco Financial Corporation from 1984 through 2011. He was also chairman of the Daily Journal Corporation, based in Los Angeles, California, and a director of Costco Wholesale Corporation.
Mr Munger was critical of cryptocurrencies, referring to Bitcoin in particular as noxious poison. He also compared the crypto platform Robinhood to gambling, saying that its success is due to people who know how to take advantage essentially of the gambling instincts of not only the American public but the worldwide public. According to him, individual investments without commission is tantamount to gambling.
After joining law firm Wright & Garrett, Mr Munger moved with his family to California. In 1962, he founded and worked as a real estate attorney at Munger, Tolles & Olson LLP. He then gave up the practice of law to concentrate on managing investments and later partnered with Otis Booth in real estate development.
When he met Mr Buffett over lunch at the Omaha Club, the two began talking about investments and never stopped. Mr Munger then partnered with Jack Wheeler to form Wheeler, Munger, and Company, an investment firm with a seat on the Pacific Coast Stock Exchange. In 1976, he wound up Wheeler, Munger, and Co after losses of 32% in 1973 and 31% in 1974.
Though Mr Munger had no formal architectural training, he contributed heavily to numerous building designs, including dormitories at Stanford University, the University of Michigan, and his current home.
In his 50s, after a failed eye cataract surgery that rendered his left eye blind, Mr Munger had his left eye removed due to severe pain. When doctors told him that he had developed a condition that may cause his remaining eye to fill up with blood and become blind too, Mr Munger started taking braille lessons. The eye condition eventually receded and he kept eyesight in his right eye for the rest of his life.
At the time of his death, according to Forbes, Mr Munger had an estimated net worth of US$2.6bn (billion) and was ranked as the 1182nd richest person in the world.
Like Mr Buffett, his partner Mr Munger is also known for his famous quotable quotes. Here are some of them.
On Life
"Another thing, of course, is life will have terrible blows, horrible blows, unfair blows. Doesn't matter. And some people recover and others don't. And there I think the attitude of Epictetus is the best. He thought that every mischance in life was an opportunity to behave well. Every mischance in life was an opportunity to learn something and your duty was not to be submerged in self-pity, but to utilize the terrible blow in a constructive fashion. That is a very good idea." —
2007 USC Law School Commencement Address
"In my whole life, I have known no wise people (over a broad subject matter area) who didn't read all the time — none, zero. You'd be amazed at how much Warren reads — and at how much I read. My children laugh at me. They think I'm a book with a couple of legs sticking out." —
Poor Charlie's Almanack
"I constantly see people rise in life who are not the smartest, sometimes not even the most diligent, but they are learning machines. They go to bed every night a little wiser than when they got up and boy does that help — particularly when you have a long run ahead of you." —
2007 USC Law School Commencement Address
"I spent a lifetime trying to avoid my own mental biases. A.) I rub my own nose into my own mistakes. B.) I try and keep it simple and fundamental as much as I can. And, I like the engineering concept of a margin of safety. I'm a very blocking and tackling kind of thinker. I just try to avoid being stupid. I have a way of handling a lot of problems — I put them in what I call my 'too hard pile,' and just leave them there. I'm not trying to succeed in my 'too hard pile.'” —
2020 CalTech Distinguished Alumni Award interview
“I have a friend who’s a fisherman. He says, ‘I have a simple rule for success in fishing. Fish where the fish are.’ You want to fish where the bargains are. That simple. If the fishing is really lousy where you are you should probably look for another place to fish.”—
2020 Daily Journal Annual Meeting
“There is no better teacher than history in determining the future... There are answers worth billions of dollars in 30$ history book.”
― Poor Charlie's Almanack: The Wit and Wisdom of Charles T. Munger
"You get what you reward for. If you have a dumb incentive system, you get dumb outcomes. Perhaps the most important rule in management is 'Get the incentive right'". - Berkshire Hathaway, at the 2016 Annual Meeting.
On Investing
“We’ve had enough good sense when something is working very well to keep doing it. I’d say we’re demonstrating what might be called the fundamental algorithm of life — repeat what works.” —
2010 Berkshire Hathaway Annual Meeting
“It takes character to sit with all that cash and to do nothing. I didn’t get to be where I am by going after mediocre opportunities.” —
Poor Charlie's Almanack
“Understanding both the power of compound interest and the difficulty of getting it is the heart and soul of understanding a lot of things.” —
Poor Charlie's Almanack
“If people weren't so often wrong, we wouldn't be so rich,” - 2015 Berkshire Hathaway annual shareholders meeting.
“There are huge advantages for an individual to get into a position where you make a few great investments and just sit on your ass: You are paying less to brokers. You are listening to less nonsense. And if it works, the governmental tax system gives you an extra 1, 2 or 3 percentage points per annum compounded.” —
Worldly Wisdom by Charlie Munger 1995-1998
"I think the reason why we got into such idiocy in investment management is best illustrated by a story that I tell about the guy who sold fishing tackle. I asked him, 'My God, they're purple and green. Do fish really take these lures?' And he said, 'Mister, I don't sell to fish.'" —
1994 speech at USC Business School
On Crypto
"A cryptocurrency is not a currency, not a commodity, and not a security. Instead, it’s a gambling contract with a nearly 100% edge for the house, entered into in a country where gambling contracts are traditionally regulated only by states that compete in laxity." —
2023 Wall Street Journal op-ed
"I'm proud of the fact that I avoided crypto. It's like some venereal disease. I just regard it as beneath contempt. Some people think it's modernity, and they welcome a currency that's so useful in extortions and kidnappings [and] tax evasion." —
2022 Berkshire Hathaway Annual Meeting
