Forward-looking investor
Buffet confidant Charlie Munger is dead
November 29, 2023, 2:24 a.m
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Warren Buffet is known worldwide as an investor legend – and he also has Charlie Munger to thank for that. It is he who convinces him of an investment philosophy that is ultimately extremely successful. Shortly before his hundredth birthday, Munger has now died.
Charlie Munger, the closest confidant and companion of investing legend Warren Buffett, has died at the age of 99. Buffett emphasized in a statement that without Munger’s inspiration and wisdom, their investment holding Berkshire Hathaway would never have become so big. Munger died on Tuesday morning in a hospital in California, it said without further details. He would have been 100 years old on January 1st.
Munger was active with Buffett at Berkshire Hathaway for decades. He was deputy head of administration and one of the largest shareholders. That also made him a billionaire. Berkshire Hathaway owns, among others, the insurer Geico, the railway company BNSF and the battery manufacturer Duracell. Berkshire’s instinct for good deals ensured that its investments in various companies performed significantly better than the average stock market over the years. A $1,000 investment in Berkshire Hathaway in the mid-1960s is worth more than $10 million today.
Munger and Buffett both grew up in Omaha, Nebraska. Munger even worked in Buffett’s grandfather’s grocery store when he was young – but the two future business partners didn’t meet for the first time until 1959. Buffett later said that Munger changed his approach as an investor. Originally he was just looking for bargains – “decent companies at a wonderful price,” as Buffett put it. Munger convinced him that wonderful companies at a fair price were a much better deal. The new perspective has made him much richer than he ever would have been as a bargain hunter, emphasized Buffett.
Munger recognized potential early on
The purchase of the textile company Berkshire Hathaway, which ultimately became the world’s most famous investment holding company, was still a classic Buffett deal: struggling and cheap. One of the first major deals under the new philosophy was the purchase of the American chocolate chain See’s Candies in the early 1970s. Berkshire paid three times more than the company was worth – but See’s generated more than $2 billion in profits over the years, making it a lucrative investment.
Munger was already a successful investor in his own right before officially joining Berkshire Hathaway. He is considered the driving force behind early investments in technology companies such as the Chinese electric car and battery specialist BYD. Berkshire also stocked up on Apple shares – while the price already seemed too high to many investors. But inspired by the success of the iPhone, the price rose significantly higher.
While Buffett often comes across as the “Oracle of Omaha,” investors often liked Munger’s humorous streak. While the Internet bubble burst in 2000, at the 2000 shareholders’ meeting, Buffett gave a long, serious answer about pyramid schemes when asked about the consequences of speculation. Munger remarked succinctly and dryly: “If you mix raisins with feces, it remains feces.” Munger also made a similar assessment of cryptocurrencies, which he called for to be banned this year because they were like gambling.
Until shortly before his death, Munger hosted his Friday lunches, which included, for example, video game entrepreneur Bobby Kotick and the founders of the payment company Stripe, Patrick and John Collison. His favorite pastime is “figuring out what works and what doesn’t – and why that is,” he told the Wall Street Journal four years ago.