Co-founder of Berkshire Hathaway and longtime friend of Warren Buffett, legendary investor Charles Thomas Munger has built his own following among the community. The late billionaire left behind a wealth of tried and tested investment advice over the years.
Even Buffett, 95, nicknamed the ‘Omaha Believer’ for his numerous flawless investment decisions over the years, credits Munger with teaching him a few things.
After Munger’s death in November 2023, Bloomberg noted in an obituary his importance as a “straight man and scoundrel of corporate excess” who provided a reality check and balance against Buffett’s fame and fortune.
Quote of the day by Charlie Munger
“At Berkshire, we did better than average. And now the question is, why did that happen? And the answer is quite simple: We tried to do less.”
What does Charlie Munger’s quote mean?
The quote comes from Munger’s remarks at the Daily Journal’s annual meeting on February 14, 2019, where he spoke for nearly two hours. When asked about success and co-founder Warren Buffett with Berkshire Hathaway, the ace investor felt the answer was to keep things simple.
In his longer response, Munger said that neither he nor Buffett had any “delusions” that they knew everything or that they “could hire a bunch of bright young people and they would know more about canned soups and aviation and utilities and so on.”
He noted that their best bet is to look for a company with good fundamentals and continue with what they know. He also recognized that being right a few times is more than trying to be right every time. “We never had that dream. We never thought we could get really useful information on all subjects, and we always realized that if we worked really hard, we could find a few things when we were right. And that a few things were enough and that’s a very reasonable expectation. This is a very different way to approach the process,” he noted.
Munger added that if you asked Buffett for his “best idea of the year,” the billionaire would “give you a stock or two. And you just followed that idea; you’d find it worked great.”
Buffett himself believes that there are only a few investment decisions you could make that would produce sensational results, and that’s enough. Speaking to students at the University of Georgia’s Terry College of Business in 2001, the legendary investor said he believed in treating investment opportunities like a single punched card with only 20 punches in your lifetime. This ensures that “you think long and hard before every investment decision — and you’d make good ones and you’d make big ones. And you probably wouldn’t even use all 20 hits in your life. But you wouldn’t need to.”
Master Joke: Who is Charlie Munger?
Munger, known for his sharp wit, brutal honesty and no-nonsense thinking, was one of the architects of Berkshire Hathaway Inc.’s success alongside Buffett’s best friend and business partner. For nearly 60 years, the duo transformed the company from a failing textile manufacturer to an empire worth billions.
A lawyer by training, Munger helped Buffett, who was seven years his junior, develop a philosophy of investing in companies for the long term. Buffett credited him with shaping Berkshire Hathaway’s investment style and shifting the “Oracle of Omaha” from cheap butt stocks to high-quality businesses at fair prices.
Under their leadership, Berkshire averaged 20% annual returns from 1965 to 2022, roughly double the pace of the S&P 500. Decades of compounding returns have made the pair of billionaires and folk heroes idolized by investors.
Munger was vice president of Berkshire from 1978 until the day he died in 2023 at the age of 99. He was also among the company’s largest shareholders, with shares worth about $2.2 billion. His total net worth was about $2.6 billion, according to Forbes.
