Investor, lawyer, and vice chairman of Berkshire Hathaway; Warren Buffett's partner for more than sixty years.
1924–2023 · Pasadena, California
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Charles Thomas Munger was born on January 1, 1924, in Omaha, Nebraska, the son of Alfred Case Munger, a lawyer, and the grandson of Thomas Charles Munger, a United States federal district judge. As a teenager he worked at Buffett and Son, an Omaha grocery store owned by Warren Buffett's grandfather Ernest, though the two future partners did not actually meet until 1959. He enrolled at the University of Michigan to study mathematics, then dropped out at nineteen, shortly after the attack on Pearl Harbor, to enlist in the United States Army Air Corps. The Army scored his aptitude tests, made him a second lieutenant, and sent him to the California Institute of Technology to train as a meteorologist. Munger never completed a bachelor's degree. He applied to Harvard Law School anyway, and the school initially rejected him precisely because he had no undergraduate diploma. The decision was reversed after Roscoe Pound, a former dean of Harvard Law and a longtime friend of the Munger family, put in a word on his behalf. Munger graduated in 1948, magna cum laude, near the top of his class. He had married Nancy Huggins in 1945, but the marriage ended in divorce in 1953, and in 1955 their young son Teddy died of leukemia at the age of nine. Friends recalled Munger walking the streets of Pasadena weeping after hospital visits, and he later described the loss as the most agonizing experience of his life.
Munger settled in the Los Angeles area to practice law, and in 1962 he co-founded the firm now known as Munger, Tolles and Olson. He had already concluded that billing hours would never buy the independence he wanted, so in that same year he launched an investment partnership, Wheeler, Munger and Company. From 1962 to 1975 it compounded at roughly 19.8 percent a year against 5.0 percent for the Dow Jones Industrial Average, an extraordinary record achieved through a highly concentrated portfolio. It came at a cost in volatility. The partnership fell about 31.9 percent in 1973 and 31.5 percent in 1974, recovered with a gain of more than 70 percent in 1975, and Munger, worn down and having lost some large investors, wound it up in 1976. He met Warren Buffett at an Omaha dinner in 1959, and the two found an intellectual kinship that lasted more than sixty years. Munger's decisive contribution was to pull Buffett away from the strict cigar-butt bargain hunting he had learned from Benjamin Graham and toward paying fair prices for genuinely great businesses, a shift crystallized by the 1972 purchase of See's Candies through Blue Chip Stamps. In 1978 Munger became vice chairman of Berkshire Hathaway, a post he held until his death forty-five years later. He was also chairman of Wesco Financial from 1984 until Berkshire absorbed it in 2011, chairman of the Daily Journal Corporation, whose annual meetings became a pilgrimage for value investors, and a director of Costco from 1997. Adversity ran alongside the success. In his mid-fifties a cataract operation on his left eye went badly wrong, leaving him in severe pain and blind on that side, and the eye was ultimately removed. Fearing he would lose his sight entirely, he began taking lessons in Braille. His remaining eye held for the rest of his life. He answered such blows with a plain stoicism he pressed on others, arguing that a person should fix what can be fixed and calmly endure what cannot, and that self-pity is never of any use. Alongside investing he worked as a largely self-taught architect, drawing dormitory and library plans himself and giving universities large sums on the condition that they build to his designs.
Munger is remembered as the intellectual architect of modern Berkshire Hathaway and as one of the most quoted minds in the history of investing. His doctrine of elementary worldly wisdom, in which a thinker assembles a latticework of the big ideas from many disciplines rather than relying on a single specialty, and his talk on the psychology of human misjudgment, which catalogued the standard causes of human error, reshaped how a generation of investors thought about their own reasoning. Those talks were collected in Poor Charlie's Almanack (2005), a book that became a cult object among founders and investors and was reissued by Stripe Press in 2023. His giving reshaped campuses at Stanford, the University of Michigan, and the University of California, Santa Barbara, though his conviction that windowless bedrooms were an acceptable trade for social common space made the proposed Munger Hall at UCSB a national controversy, and the project was abandoned in August 2023. Munger died on November 28, 2023, at a hospital in Santa Barbara, California, thirty four days short of his hundredth birthday. Buffett, who had described him as part older brother and part loving father, said that Berkshire Hathaway could not have been built to its present state without Munger's inspiration, wisdom, and participation. He had spent roughly seventy years in the same Pasadena house, refused to sign the Giving Pledge on the grounds that he had already given away so much to his children that he had violated it, and remained, until weeks before his death, the sharpest and least sentimental voice in American business.
“Invert, always invert. Turn a situation or problem upside down. Look at it backward.”
“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.”
“Show me the incentive and I will show you the outcome.”
“The big money is not in the buying and the selling, but in the waiting.”
“A great business at a fair price is superior to a fair business at a great price.”
“The safest way to try to get what you want is to try to deserve what you want.”
“I constantly see people rise in life who were not the smartest, sometimes not even the most diligent, but they are learning machines.”
Their voice on summon.guide is grounded in:
Further reading: en.wikipedia.org/wiki/Charlie_Munger
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