99 Not Out: Charlie Munger and his Timeless Journey


Billionaire investor Charlie Munger, the Vice Chairman of Berkshire Hathaway and a long-time pal to Warren Buffet, handed away on November 28, 2023 on the age of 99. Munger was born on January 1, 1924 and would have certainly turned 100 on the New Yr’s Day in 2024. He was at least an period in company America and investing.

Responding to his demise, Buffet acknowledged the important position performed by Charlie Munger within the success of their conglomerate. Munger performed a vital position in turning Berkshire into an funding powerhouse with a market cap of $780 billion (as of November 2023).

His knowledge, inspiration and participation have been one of many main causes for the unmatchable progress of Berkshire Hathaway.

charlie munger about investment planning

Charlie Munger’s Background:

Born in 1924 in Omaha, Munger labored at Buffett & Son grocery retailer as an adolescent. The shop was owned by Buffett’s grandfather.

Throughout World Warfare II, he studied arithmetic on the College of Michigan however left faculty to serve within the U.S. Military Air Corps as a meteorologist. He later continued to review meteorology at Caltech.

Munger then graduated magna cum laude from Harvard Regulation College in 1948 and based Munger, Tolles & Olson, a famend regulation agency.

Transition to Finance:

Warren Buffett and Charlie Munger’s friendship dates again a number of a long time.

Munger met Buffet at a cocktail party in 1959. At the moment, he was working towards regulation whereas Buffet was working an funding partnership.

Munger shifted from regulation to finance on Buffett’s recommendation within the Nineteen Sixties. They turned good buddies earlier than changing into formal enterprise companions.

Munger additionally ran his personal funding agency, attaining a compound annual return of 19.8% (1962-1975).

He later joined Berkshire Hathaway in 1978 as vice chair.

Munger’s Affect on Buffett’s Investing Philosophy:

Munger influenced Buffett to maneuver away from “cigar-butt” investing (an method that includes shopping for distressed enterprise). The truth is, Munger performed an amazing position in altering his perspective. He emphasised shopping for nice companies at truthful costs fairly than troubled companies at cut price costs.

He assisted Buffett in diversifying his funding method and emphasised on figuring out high-quality corporations that have been undervalued.

Munger’s Funding Philosophy:

Excessive moral requirements have been integral to Munger’s philosophy and success.

As beforehand acknowledged, he advocated for purchasing fantastic companies at truthful costs.

Impactful Funding Selections:

Probably the most impactful choices by Munger was when he persuaded Buffett in 1972 to buy See’s Candies for $25 million.

Although the California sweet maker had annual earnings of solely about $4 million on the time, it turned out to be a extremely worthwhile funding producing greater than $2 billion in gross sales for Berkshire.

Berkshire’s “4 Giants”:

Munger, as vice chair, managed belongings, together with the “4 Giants” of Berkshire:

Insurance coverage Float: Subsidiary insurance coverage corporations, rising from $19 million to $164 billion.

Apple, Inc: Berkshire’s 5.8% possession stake resulting from Apple’s inventory repurchase. (Although Berkshire’s share possession is decrease, the funding continues to be thought-about nice.)

BNSF (Burlington Northern Santa Fe Company): Freight railroad community in North America.

BHE (Berkshire Hathaway Vitality): Portfolio of regionally managed companies within the utility sector.

Munger’s Views on Bitcoin:

Munger expressed skepticism and criticized Bitcoin, calling it a creation “out of skinny air” and a go-to fee methodology for criminals. He was recognized for contemplating cryptocurrencies as “nugatory” and had been vocal about his considerations concerning their potential hurt.

Philanthropy:

Munger centered philanthropy on training, making important donations to varied universities. Throughout his lifetime, he made giant donations to the College of Michigan, Stanford College and the College of California, Santa Barbara.

Some well-known quotes of Munger

Listed here are just a few most well-known Charlie Munger’s quotes on investing and life:

“I feel a life correctly lived is simply study, study, study on a regular basis.”

“The large cash is just not within the shopping for or promoting, however within the ready.”

“There is no such thing as a higher instructor than historical past in figuring out the longer term… There are solutions value billions of {dollars} in a 30$ historical past e-book.”

“The most effective armor of outdated age is a properly spent life previous it.”

The underside line

Munger performed a vital position in Berkshire’s progress into an enormous holding firm. His funding philosophy and moral requirements have been key to his success and Berkshire’s success. The ideas adopted by him shall function an funding information for generations to come back.


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