Charlie Munger, the legendary investor, business leader, and long-time partner of Warren Buffett at Berkshire Hathaway died Tuesday at the age of 99. Charlie Munger passed away peacefully in a California hospital, leaving behind an unmatched investing legacy alongside Buffett as well as a profound impact on the business and financial worlds.
The Partnership That Built An Empire
Charlie Munger first met Buffett in 1959 when Munger returned to their shared hometown of Omaha, Nebraska to settle his deceased father’s affairs. They struck up an instant friendship during a fateful lunch meeting, recognizing in each other a like-minded brilliance when it came to investing strategy and business leadership.
This meeting sparked a partnership that would profoundly impact the business world for decades to come. While Charlie Munger had already started his own successful investment partnership by 1962, his influence over Buffett’s evolving investing strategy proved immeasurable. He steered Buffett away from buying cheap ‘cigar-butt’ companies and instead focused their efforts on identifying durable, high-quality businesses that could drive growth for the long-term.
Together, the two transformed Berkshire Hathaway from its origins as a struggling textile manufacturer into the $700+ billion diversified conglomerate it is today, with whole ownership of dozens of beloved brands and multi-billion dollar stakes in Apply, Coca-Cola, and other titans of industry.
Architect Of Today’s Berkshire
While Buffett has been the public face of leadership, Charlie Munger had an invaluable role as vice chairman in directing and architecting key structural aspects of Berkshire into the powerhouse it has become. As Buffett says, Munger’s “most important architectural feat was the design of today’s Berkshire” that has delivered such consistent and satisfactory profits year after year.
The Yin To Buffett’s Yang
The two men formed perfect complements to each other when it came to leadership and decision making. Munger, known for his direct candor, discipline, and breadth of knowledge across fields, helped provide critical judgment to balance Buffett’s more affable and trusting nature. “Berkshire Hathaway could not have been built to its present status without Charlie’s inspiration, wisdom and participation,” Buffett remarked.
Charlie Munger’s Keys To Life And Business
In his own right, Munger was much admired for his expansive intellect, his unique mental models for business and decision making, and his insights on life. Some of his core tenets included:
- Studying past mistakes and failures relentlessly to advance
- Understanding the limits of your own competence as much as its breadth
- Holding experience and knowledge across a wide “lattice” of disciplines
- Identifying and avoiding traps like resentment, envy and overspending
- Embracing continuous learning across fields
The ‘Lollapalooza Effect’ And Other Mungerisms
Among Munger’s many famous concept is the “Lollapalooza Effect” which describes multiple biases or tendencies compounding at the same time to produce extreme results. Many of his trademark phrases and concepts left an impression on investing and business circles. Munger is credited with breaking Buffett of limiting ‘cigar butt’ thinking to teach him to appreciate quality brands with durable competitive advantages.
Calm And Steady Wins The Race Over his life, Munger faced heavy adversity including divorce, the loss of a child, and visual impairment. However, he lived steadfastly by a code of avoiding resentment and negativity. “You stay cheerful in spite of troubles,” he espoused, “deal with reliable people, and do what you’re supposed to do.”
The Berkshire Annual Meeting Won’t Be the Same
Munger’s death, just a week after Buffett’s announcement that he can’t escape his own mortality, leaves a palpable absence at Berkshire Hathaway. The annual shareholder events drawing tens of thousands to Omaha where Munger held court along with Buffett for hours won’t quite have the same magical quality. While new leaders like Vice Chairs Abel and Jain will assuredly step up, there is no replacing a legend and guiding confidante like Charlie Munger.
A Legacy That Will Live On Munger’s lasting influence as an oracle of investing, iconoclastic business leader, and exemplar for life has impacted countless individuals. “A generation of investment managers” learned foundational skills from Buffett and Munger according to investor Whitney Tilson. Munger showed the world that an empowering, joyful, and meaningful life can be built through continuous learning, forming own’s code, and joining forces with those bringing out your best self. Even in death at 99, the spirit, wisdom, and capitalism example set by Charlie Munger will no doubt live on for ages more.
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