Berkshire said that Munger died peacefully in a hospital in California, where he lived. The company did not disclose the cause of his death. Munger would have turned 100 on January 1.
“Berkshire Hathaway would not be what it is today without Charlie’s creativity, wisdom, and involvement,” Buffett, Berkshire’s 93-year-old chairman and CEO, said in a statement.
Buffett once described Munger as a thought partner, saying, “We think so much alike that it’s frightening. He’s the smartest, most high-level guy I’ve ever met.”
The death of Munger, vice chairman of Berkshire since 1978, marks the end of an era in the corporate and investment world in the United States.
Both Munger and Buffett were respected and loved by investors around the world, many of whom were keen to attend the company’s annual conference in Omaha, Nebraska, to hear the duo’s wisdom regarding investing and life.
In addition to being vice chairman of Berkshire, Munger was a real estate attorney, president and publisher of the Daily Journal Corp., a member of the Costco board of directors, and an architect.
In early 2023, his fortune was estimated at $2.3 billion, which is a huge amount for many investors, but far less than Buffett’s fortune, which is estimated at more than $100 billion.
Munger, who wore thick glasses, lost his left eye after complications from cataract surgery in 1980.
Munger was chairman and CEO of Wesco Financial from 1984 to 2011, when Buffett’s Berkshire bought the remaining shares in the Pasadena, California-based insurance and investment company.
Charlie Munger played a pivotal role in shaping Warren Buffett’s investment philosophy, influencing him to move away from buying distressed companies at low prices in the hope of making a profit and instead focus on companies that are of higher quality but at undervalued prices.
This shift was evident in 1972 when Munger convinced Buffett to buy See’s Candies for $25 million, a decision that proved highly profitable for Berkshire. Even though the California candy maker had annual pre-tax profits of only about $4 million, Since the deal was concluded, it has managed more than $2 billion in sales for Berkshire.
“It got me away from the idea of buying very mediocre companies at rock-bottom prices, knowing that there were some small profits in them, and looking for some really great companies that we could buy at fair prices,” Buffett told CNBC in May 2016.
Or as Munger said at a 1998 Berkshire shareholder meeting: “It’s no fun buying a company that’s expected to be liquidated before it goes bankrupt.”
“I have a friend (Warren Buffett) who says the first rule of fishing is to fish where the fish are. The second rule of fishing is never to forget the first rule.”… “We’ve gotten good at fishing where the fish are,” says Munger, an adult. The then 93-year-old told thousands of people at a 2017 Berkshire meeting.
He believed in what he called the “Lollapalooza effect,” which occurs when two or more forces all work in the same direction, and often you get not just a simple addition but an enormous creative force when a certain point of interaction between those forces is reached.
A solid succession plan
Berkshire is unlikely to appoint a replacement for Munger and has not publicly discussed any need or desire to do so.
Two other vice presidents, Greg Appel and Ajit Jain, provide day-to-day oversight of Berkshire’s business.
Under Berkshire’s succession plan, which Munger inadvertently mentioned at the company’s 2021 annual meeting, Appel will become CEO once Buffett leaves office for whatever reason.
Buffett’s son, Howard, will become non-executive chairman and will manage one or two investment portfolios.
Berkshire’s businesses include railroads, auto insurance, energy, industrial and retail. It also owns shares worth hundreds of billions of dollars in companies led by Apple.
Son of Omaha
Charlie Munger was born in Omaha on January 1, 1924. His father, Alfred, was a lawyer, and his mother, Florence, was from a wealthy family. Like Warren Buffett, Munger worked at Buffett’s grandfather’s grocery store as a young man, but the two future partners did not meet until years later.
At 17, Munger left Omaha for the University of Michigan. Two years later, in 1943, he enlisted in the Army Air Corps, according to Janet Lowe’s 2003 biography “Damn Right!”
The US Army sent him to the California Institute of Technology in Pasadena to study meteorology. In California, he fell in love with Nancy Huggins, his sister’s roommate at Scripps College, and married her in 1945.
Although he never completed his undergraduate degree, he graduated summa cum laude from Harvard Law School in 1948, and the couple returned to California, where he practiced real estate law. They founded the law firm Munger, Tolles & Olson in 1962 and focused on managing investments in the hedge fund Wheeler, Munger & Co., which he also founded that year.
“I’m proud to be an Omaha boy,” Munger said in a 2017 interview with Dean Scott DeRue of the Michigan Ross School of Business. “Sometimes I use the old saying: ‘They got the boy out of Omaha but they never took Omaha out of the boy… All those old values – family comes first; Be in a position to help others…”
In California, he partnered with Franklin Otis Booth, a member of the founding family of the Los Angeles Times, in real estate. One of their early developments turned out to be a profitable residential project on Booth’s grandfather’s estate in Pasadena. (Booth, who died in 2008, was introduced to Buffett by Munger in 1963 and became one of Berkshire’s largest investors.)
“I had five real estate projects,” Munger told Dero. “I did both things side by side for a few years, and within a very few years, I had about $4 million.”
Munger closed the hedge fund in 1975. Three years later, he became vice chairman of Berkshire Hathaway.
Intellectual partner
In 1959, Munger returned to Omaha at age 35 to close his late father’s law firm. At the time he was introduced to Buffett, then 29 years old, by one of Buffett’s investing clients. The two have struck up a good relationship and have stayed in touch despite having half a continent separating them.
“We think so alike, it’s scary,” Buffett recalled in an interview with the Omaha World-Herald in 1977. “He’s a smart, high-profile guy, the likes of which I’ve never met before.”
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