Charlie Munger, Warren Buffett’s Partner and ‘Abominable No-Man,’ Dies at 99

Charlie Munger, Warren Buffett’s Partner and ‘Abominable No-Man,’ Dies at 99 (WSJ)
Charlie Munger, Warren Buffett’s Partner and ‘Abominable No-Man,’ Dies at 99 (WSJ)

Summary

As Berkshire Hathaway vice chairman, his sharp wit dazzled generations of investors.

No equal business partner has ever played second fiddle better than Charlie Munger.

Warren Buffett’s closest friend and consigliere for six decades, the billionaire vice chairman of Berkshire Hathaway died Tuesday at age 99.

In public, especially in front of the tens of thousands of attendees at Berkshire’s annual meetings, Munger deferred to Buffett, letting the company’s chairman hog the microphone and the limelight. Munger routinely cracked up the crowd by croaking, “I have nothing to add."

In private, Buffett often deferred to Munger. In 1971, Munger talked him into buying See’s Candy Shops for a price equivalent to three times the chocolate stores’ net worth—a “fancy price," Buffett later recalled, far higher than he was accustomed to paying for businesses.

See’s would go on to generate some $2 billion in cumulative earnings for Berkshire over the coming decades.

As Buffett wrote in 2015, “This purchase ended my pursuit of ‘cigar-butt’ investments—mediocre companies at ‘bargain’ prices—and set me in pursuit of splendid businesses selling at [reasonable] prices." He added, “Charlie had been urging this course for some years, but I was a slow learner."

Buffett nicknamed Munger the “abominable no-man" for his ferocity in rejecting potential investments, including some that Buffett might otherwise have made. But Munger, who was fascinated by engineering and technology, also pushed the tech-phobic Buffett into big bets on BYD, a Chinese battery and electric vehicle maker, and Iscar, an Israeli machine-tool manufacturer.

Munger was a brilliant investor in his own right. He began managing investment partnerships in 1962. From then through 1969, the S&P 500 gained an average of 5.6% annually. Buffett’s partnerships returned an average of 24.3% annually. Munger’s did even better, averaging annualized gains of 24.4%.

In 1975, shortly before he joined Berkshire as vice chairman, Munger shut down his partnerships. Over their 14-year history, his portfolios gained an average of 19.8% annually; the S&P 500 grew at only a 5.2% rate.

The two men had long invested differently. Buffett, under the influence of his mentor Benjamin Graham, would buy almost any business, even if it was near-dead, so long as it was cheap.

Among such “cigar butts" was Berkshire Hathaway itself, which had been a dilapidated textile manufacturer when Buffett bought it in 1965.

As Buffett turned Berkshire into a holding company for insurance and other firms, he kept looking for mediocre businesses at bargain prices. Munger instead focused on great businesses at acceptable prices, reckoning that their ability to produce cash in the future would more than compensate for paying a premium price up front.

Over years of discussion, Munger persuaded his partner to change.

“I have been shaped tremendously by Charlie," Buffett said in 1988. “Boy, if I had listened only to Ben [Graham], would I ever be a lot poorer."

In 2015, Buffett wrote that Munger taught him: “Forget what you know about buying fair businesses at wonderful prices; instead, buy wonderful businesses at fair prices."

Berkshire “has been built to Charlie’s blueprint," Buffett added.

Berkshire Hathaway Chairman Warren Buffett (left) and Vice Chairman Charlie Munger are seen at the annual Berkshire shareholder shopping day in Omaha, Nebraska, U.S., May 3, 2019.
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Berkshire Hathaway Chairman Warren Buffett (left) and Vice Chairman Charlie Munger are seen at the annual Berkshire shareholder shopping day in Omaha, Nebraska, U.S., May 3, 2019. ( REUTERS/Scott Morgan)

Charles Thomas Munger was born in Omaha, Neb., on New Year’s Day, 1924. His father, Alfred, was a lawyer; his mother, Florence, was a homemaker and avid reader.

Munger majored in mathematics at the University of Michigan, then left school to enlist in the U.S. Army Air Corps during World War II. The military first sent Munger to study thermodynamics and meteorology at the University of New Mexico and the California Institute of Technology, then posted him to an air base in Nome, Alaska, where he served as a weather forecaster.

After the war, Munger talked a dean at Harvard Law School into admitting him without a college degree. He graduated magna cum laude.

He considered joining his father’s practice in Omaha before settling in Southern California. He and several partners eventually opened their own law practice in 1962. Today the firm, known as Munger, Tolles & Olson, employs about 200 lawyers.

His first marriage, to Nancy Huggins, ended in divorce. He married his second wife, Nancy Barry Borthwick, in 1956. She died in 2010. They had four children together and two each from their prior marriages.

Munger also confronted tragedy: In 1955, his son Teddy died of leukemia at age 9. Munger later recalled pacing the streets of Pasadena in tears at “losing a child inch by inch." More than six decades later he would still choke up at the memory of his son’s suffering.

In 1978, a surgeon bungled a cataract surgery, leaving Munger blind in one eye, which later had to be surgically removed. The investor refused to blame the doctor, noting that complications occurred in 5% of such procedures. For him, as always, it was about the numbers.

Munger taught himself Braille, then realized he could still see well enough to read. He ended up driving his own car, often to the consternation of friends and family, until his early 90s.

The two men who would run Berkshire Hathaway met in 1959 when Munger, who had already moved to Los Angeles, went to a dinner in his hometown that Buffett also attended.

They already knew each other’s names: Munger worked in Buffett’s grandfather’s grocery store as a boy. One of the first investors in Buffett’s partnership gave him money because, he said, “You remind me of Charlie Munger."

Buffett’s first wife, Susan, recalling that dinner, said in 1998: “I think Warren felt that Charlie was the smartest person he’d ever met, and I think Charlie felt Warren was the smartest person he had ever met."

They instantly hit it off and before long became inseparable, often talking by phone several times a day.

A photo from a trip to Savannah, Ga., in the 1980s captures the two investors looking eerily alike: talking and striding in lockstep, both wearing khakis and open-collared blue dress shirts. Everything from their height to their hairlines, from their eyeglass frames to the wrinkles in their clothes, seems to match.

Munger’s hero was Benjamin Franklin, whom he admired for his curiosity, ingenuity and wit. Munger’s own common sense, biting humor, pathological bluntness and disdain for conventional wisdom made him a celebrity among investors.

During the question-and-answer sessions at Berkshire’s annual meetings, Munger would sit silent as Buffett spoke in elaborate paragraphs. The adoring audience knew Munger was waiting to uncork a zinger.

At Berkshire’s annual meeting in 2000, a shareholder asked how the speculation in Internet stocks would affect the economy. Buffett answered with nearly 550 words. Munger growled, “if you mix raisins with turds, they’re still turds."

When a shareholder asked at the 2004 meeting how Berkshire sets pay for executives, Buffett spoke for more than five minutes. Munger drawled, “Well, I would rather throw a viper down my shirtfront than hire a compensation consultant."

In an op-ed for The Wall Street Journal in 2023, published when he was 99, Munger called for the U.S. government to ban bitcoin and other cryptocurrencies, writing that crypto is “a gambling contract with a nearly 100% edge for the house." Earlier, he had described bitcoin as a “scumball activity" and “rat poison."

Munger’s laconic image was only an act he put on to avoid upstaging Buffett. When he wasn’t sharing the limelight with Berkshire’s chairman, Munger was loquacious. At regular lunches and dinners with friends and family, and at the annual meetings of Daily Journal, a small media company he chaired, he would speak for hours.

As many friends noted, if he paused to take a sip of water and someone else started to talk, Munger would imperiously raise his index finger to prevent the other speaker from cutting in before he could finish swallowing.

His stamina was extraordinary, too. In 2019, when Munger was 95, two Wall Street Journal reporters showed up at his modest house in Los Angeles at 6 p.m. He talked nearly nonstop until almost midnight. Several times after 10 p.m., one or both of the reporters haltingly began to stand up to leave; Munger motioned them to sit back down.

Attendees arrive at the auditorium of the CHI Health Center during the Berkshire Hathaway annual meeting in Omaha, Nebraska, US, on Saturday, May 6, 2023.
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Attendees arrive at the auditorium of the CHI Health Center during the Berkshire Hathaway annual meeting in Omaha, Nebraska, US, on Saturday, May 6, 2023. (Bloomberg)

In August 2023, at age 99 and mostly wheelchair-using, Munger insisted on joining his large family, including more than a dozen grandchildren and great-grandchildren, on the annual fishing trip they had been making to Minnesota for decades.

That year, Munger was “mentally even better than he’s ever been before," said his friend Peter Kaufman, chairman of Glenair, an aerospace-parts manufacturer.

Content with his public persona as Buffett’s cantankerous sidekick, Munger amassed his own fortune.

He donated to institutions ranging from Stanford University and Los Angeles’s Good Samaritan Hospital to Planned Parenthood. He was also an amateur architect and lived in the house he had designed himself in the 1950s. Late in life, he became obsessed with designing buildings for university and high-school campuses.

Alongside investment gains came a cult following. Munger chaired Wesco Financial, a Berkshire unit whose shares remained publicly traded until its corporate parent absorbed the firm entirely in 2011. Fans flocked from as far away as China and India to hear him speak at Wesco’s annual meetings, and later Daily Journal’s.

An anthology of writings by and about Munger called “Poor Charlie’s Almanack," edited by Kaufman, became an international bestseller.

Munger never stopped preaching old-fashioned virtues. Two of his favorite words were assiduity and equanimity.

He liked the first, he said in a speech in 2007, because “it means sit down on your ass until you do it." He often said that the key to investing success was doing nothing for years, even decades, waiting to buy with “aggression" when bargains finally materialized.

He liked the second because it reflected his philosophy of investing and of life. Every investor, Munger said frequently, should be able to react with equanimity to a 50% loss in the stock market every few decades.

Munger retained his sense of humor into his 90s, even though he was nearly blind, could barely walk, and his beloved wife, Nancy, had died years earlier. Around 2016, an acquaintance asked which person, in a long life, he felt most grateful to.

“My second wife’s first husband," Munger said instantly. “I had the ungrudging love of this magnificent woman for 60 years simply by being a somewhat less awful husband than he was."

Write to Jason Zweig at intelligentinvestor@wsj.com and Justin Baer at justin.baer@wsj.com

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