US Markets
Wednesday, November 29th, 2023 12:11 am EDT
Key Points
Death of Charlie Munger:
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- Charlie Munger, the renowned billionaire investor and long-time partner of Warren Buffett at Berkshire Hathaway, has passed away at the age of 99.
- Munger died on a Tuesday, as confirmed by a press release from Berkshire Hathaway. His family informed the conglomerate that he peacefully passed away in a California hospital. Munger would have celebrated his 100th birthday on New Year’s Day.
Contributions to Berkshire Hathaway and Investment Strategy:
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- Described as an integral part of Berkshire Hathaway’s success, Munger served as the vice chairman of the conglomerate. Warren Buffett acknowledged Munger’s inspiration, wisdom, and participation in building Berkshire Hathaway to its present status.
- Munger was not only a key figure in investing but also had a significant influence on Berkshire’s investment strategy. He played a crucial role in shifting the focus from troubled companies at low prices to higher-quality yet underpriced companies. An illustrative example was the 1972 acquisition of See’s Candies, where Munger persuaded Buffett to invest $25 million, a decision that proved highly profitable for Berkshire.
Personal and Philanthropic Legacy:
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- Born in Omaha in 1924, Munger had a diverse career, from practicing real estate law to being the chairman and CEO of Wesco Financial. He joined Berkshire Hathaway as vice chairman in 1978 after the company’s acquisition of Wesco Financial.
- Munger’s philanthropic activities included substantial donations to educational institutions such as the University of Michigan, Stanford University, and Harvard Law School. Despite lacking formal training as an architect, he stipulated that schools accepting his donations also accept his building designs. Munger’s approach to life, as described in interviews, emphasized values such as minimizing envy, staying cheerful, dealing with reliable people, and adhering to simple rules for a better life.
Billionaire Charlie Munger, the renowned investor and long-time associate of Warren Buffett, has passed away at the age of 99, according to a press release from Berkshire Hathaway. Munger, who would have turned 100 on New Year’s Day, played a pivotal role as Berkshire’s vice chairman and contributed significantly to the conglomerate’s success. Berkshire Hathaway acknowledged Munger’s indispensable role, with Buffett stating that the company could not have achieved its current status without Munger’s inspiration and wisdom.
In addition to his role at Berkshire, Munger had a diverse career, including serving as a real estate attorney, chairman, and publisher of the Daily Journal Corp., and being a member of the Costco board. Munger was also a philanthropist and an architect. His estimated fortune at the beginning of 2023 was $2.3 billion, a substantial amount but considerably smaller than Buffett’s estimated fortune of over $100 billion.
Munger, recognizable for his thick glasses, had lost his left eye in 1980 due to complications from cataract surgery. He was the chairman and CEO of Wesco Financial until 2011 when Berkshire acquired the remaining shares of the Pasadena-based insurance and investment company. Buffett credited Munger with influencing his investment strategy, shifting from favoring troubled companies at low prices to focusing on higher-quality but underpriced companies.
An illustrative example of this shift occurred in 1972 when Munger persuaded Buffett to approve Berkshire’s purchase of See’s Candies for $25 million, despite its modest annual pretax earnings. The investment has since generated over $2 billion in sales for Berkshire. Munger’s philosophy emphasized the importance of investing in high-quality businesses at fair prices rather than settling for mediocre companies at low prices.
The close partnership between Buffett and Munger, often described as thinking alike to the point of being spooky, centered on value investing, where stocks are selected based on being undervalued relative to the company’s long-term fundamentals. The duo’s philosophy differed during the COVID-19 pandemic in 2020, adopting a more conservative approach compared to the Great Recession, reflecting a focus on preserving liquidity.
Apart from his financial endeavors, Munger was a generous philanthropist who donated significant sums to educational institutions. He contributed to the University of Michigan, Stanford University, and Harvard Law School, often with the condition that his building designs be accepted, showcasing his interest in architecture despite lacking formal training in the field.
Munger’s personal life included two marriages, with his second lasting 54 years until his wife Nancy’s death in 2010. They contributed $43.5 million to Stanford University to fund the Munger Graduate Residence. Munger’s approach to a long and happy life, as shared in a 2019 interview, emphasized avoiding envy and resentment, managing finances wisely, staying cheerful despite troubles, dealing with reliable people, and adhering to simple rules.
Charlie Munger’s passing marks the end of an era in the world of finance, with his legacy extending beyond investing to include architecture, philanthropy, and a philosophy of leading a better life.
For the full original article on CNBC, please click here: https://www.cnbc.com/2023/11/28/charlie-munger-investing-sage-and-warren-buffetts-confidant-dies.html
