Charlie Munger was Warren Buffett’s sidekick for more than four decades as they went about transforming Berkshire Hathaway from a failed textile maker into a spectacularly successful investment empire.
Munger died, aged 99, on Tuesday, leading to an outpouring of tributes from businessmen, financiers and politicians.
While Buffett was the star of the show, Munger had far more influence on Berkshire than his vice-chairman title suggested.
‘Berkshire Hathaway could not have been built to its present status without Charlie’s inspiration, wisdom and participation,’ said Buffett.
Munger worked closely with Buffett on investment decisions, with Berkshire holding hundreds of billions of dollars in stocks, including Apple, Coca-Cola and Bank of America as well as ownership of the BNSF railroad and Geico insurer.
Investment legend: Charlie Munger (pictured) died, aged 99, on Tuesday, leading to an outpouring of tributes from businessmen, financiers and politicians
Regarded as the John Lennon and Paul McCartney of the investment world, under their management Berkshire averaged an annual gain of 20 per cent from 1965 through 2022 – roughly twice the return of the S&P 500.
The results made the pair billionaires and heroes to their adoring investors.
Apple boss Tim Cook described Munger in a post on X as ‘a titan of business and keen observer of the world around him’ who has ‘helped build an American institution’.
Brian Moynihan, chief executive of Bank of America, added: ‘Charlie Munger was a legendary figure in the investment community.’
Howard Marks, co-founder at Oaktree Capital Management, said: ‘He was a genuine polymath, extremely well-read in a large number of areas, and he would use analogies to them when discussing investment.
‘There were very few things you could talk about where he didn’t know more than you.’
Munger was critical in moving his partner away from buying what Buffett called ‘cigar butts’ – mediocre companies that had a puff of smoke left and could be bought for very cheap prices.
‘overlook what you know about buying fair businesses at wonderful prices, instead buy wonderful businesses at fair prices,’ Munger would regularly remind Buffett.
But it was his sharp wit that made him so beloved to Berkshire shareholders and followers.
His comments were pithy and entertaining but had the more serious point of highlighting verbose, misleading corporate jargon.
At Berkshire’s 2017 annual gathering, known as ‘Woodstock for Capitalists’, he told the shareholders: ‘Every time you see the word ‘EBITDA’, you should substitute the words bullsh*t earnings.’
Double act: Munger (pictured with Buffett) had far more influence on Berkshire than his vice-chairman title suggested
He was also not averse to handing out some life advice and in 2004 quipped: ‘You want to avoid evil or seriously irrational people, particularly if they are attractive members of the opposite sex. That can guide to a lot of trouble.’
Buffett said of Munger’s demeanour: ‘Miss Manners clearly needs to do a lot of work on Charlie.’
He was an outspoken critic of corporate misbehaviour, describing the compensation packages given to some chief executives as ‘demented’ and ‘immoral’.
He himself was worth an estimated £2billion, vastly smaller than Buffett’s fortune which is more than £80billion.
He called bitcoin ‘noxious poison’ and ‘fraud and partly delusion’, and warned that much of banking had become ‘gambling in drag’.
A lawyer by training, Munger met Buffett in 1959, at the age of 35, when he returned to Omaha to close his late father’s legal practice.
He was introduced to Buffett, then 29, by one of Buffett’s investor clients.
The two men hit it off and stayed in contact, with Buffett repeatedly pushing Munger to make the jump into the investment world, telling him that ‘law was fine as a hobby, but he could do better’.
Munger eventually set up his own investment partnership known as Wheeler, Munger & Company before joining Berkshire Hathaway’s board in 1978.
‘We never had an argument in the entire time we’ve known each other, which is almost 60 years now,’ Buffett said in 2018.
When Munger missed a special meeting of Berkshire shareholders in 2010, Buffett brought a cardboard cutout of his partner on stage and mimicked Munger saying: ‘I couldn’t agree more.’
Munger leaves the company in safe hands. Berkshire has two other chairmen, Greg Abel and Ajit Jain, who supervise its day-to-day businesses and Abel was named by Buffett as his successor in 2021.
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