Charlie Munger’s wisdom and irreverence: Investors mourn a legend

As Charlie Munger’s admirers around the global mourn the loss of one of the most influential investors ever, a deep sense of gratitude and appreciation has spread — for his unparalleled business acumen as well as his uniquely sharp tongue.

Munger, Berkshire Hathaway’s vice chairman who died Tuesday one month shy of his 100th birthday, left a mark on generations of investors in a host of ways thanks to a long and fruitful life.

First and foremost, Munger’s investment philosophy rubbed off on none other than Warren Buffett, giving rise to the sprawling conglomerate worth almost $800 billion that Berkshire is today.

Early in their careers, Munger broadened Buffett’s investing approach, eventually turning away the younger Buffett from buying dirt cheap, “cigar-butt” companies that might still have a little smoke left in them, to instead focus on quality companies selling at fair prices.

“Certainly as Berkshire shareholders, we owe them a debt of gratitude because the earlier you get to a good decision, the better,” Bill Stone, chief investment officer at Glenview Trust, said in an interview. Such timing gives rise to “a compound” effect, he said.

Recognizing a good business

Matt McLennan, co-head of the global value team and portfolio manager at First Eagle Investments, a longtime investor in Berkshire, recalled a meeting with Munger more than 15 years ago, where he asked how he and Buffett spent their time, given their claim that they made investment decisions in only minutes.

“Charlie responded ‘reading,’ which struck me as quite apt given his uncanny ability to build mental models of how the world works and use these models as the advance groundwork for efficient decision-making,” McLennan told CNBC.

Munger long emphasized the importance of recognizing a good business before it’s widely seen as such, and he did so many times in his storied career.

He made a shrewd bet on Chinese electric automaker BYD that proved a big winner. Berkshire first bought BYD in 2008, and the stake has since grown into a multibillion-dollar position in the world’s largest electric vehicle manufacturer.

Munger was also a loyal supporter of Costco Wholesale Corp., calling it one of the best investments of his life. He invested in the retailer before it merged with Price Club in 1993.

Never following the crowd

Unlike Buffett, who often wraps a piece of criticism in a folksy story, Munger tended to speak bluntly, sprinkling his remarks with unforgettable quips.

As a longtime cryptocurrency skeptic, he never minced words when it came to his critique, saying digital currencies are a malicious combination of fraud and delusion. He also called bitcoin a “turd,” “worthless, artificial gold” and that trading digital tokens is “just dementia.”

When SPACs — special purpose acquisition companies — enjoyed a short-lived boom in 2021, Munger said “it’s just the investment banking profession will sell s— as long as s— can be sold.“

“The thing I really appreciated was that he was so blunt,” Stone of Glenview Trust said. “It’s pretty refreshing because most people in the world are forced to be a little bit cautious in what they say or just want to be liked. He had a special something and I never took it as malicious.”

John Rogers, co-chief executive at Ariel Investments, respected Munger’s no nonsense “irreverence” to the end.

“He was a true contrarian. He didn’t care what others thought,” Rogers said this week at the CNBC CFO Council Summit. “I think to be a successful investor, that’s critical, that you don’t follow the crowd. You think independently, and he was someone who truly did that.”