In this year’s letter to Berkshire Hathaway shareholders of the company’s 2022 results, Warren Buffett praised billionaire Charlie Munger, his friend, and partner for the past 58 years. He provided Charlie Munger’s recent quotes that display his legendary wit and wisdom.
Though they think alike, Munger can be sharp-tongued and blunt to Buffett’s softer tone. They are an extraordinary management team, and Charlie Munger, at age 99 to Buffett’s younger 92 years, adds significant value and lessons, and according to BH’s CEO, much laughter.
Who is Charlie Munger?
Charlie Munger began working with Warren at a grocery store owned by Buffett’s grandfather in 1942. Since 1965, Vice Chairman Charlie Munger has shared the helm at Berkshire Hathaway with its CEO, Warren Buffett.
According to Forbes, Munger’s net worth of $2.3 billion is well below Buffett’s over $107 billion net worth. The gap may relate to Charlie’s role as Vice-Chairman and his later start as a value investor than Buffett, making substantial donations much earlier than Buffett, and has done so throughout his life.
Munger may sometimes yield to Buffett, but he is also a legendary investor in his own right with a strong philosophy that emphasizes a long-term focus, value investing, and adverse to leverage and unnecessary risk. He detests cryptocurrency and recently said,” “It’s totally absolutely crazy, stupid gambling.”
Charlie remains active at Berkshire Hathaway and gets around in a wheelchair these days. He is a board member for several companies, including Daily Journal, where he recently shed his role as CEO.
Warren Buffett shared Munger’s recent thoughts in Berkshire Hathaway’s letter to its shareholders on these themes:
Take A Long Term Perspective When Investing
Like Warren Buffett, Charlie Munger emphasizes patience in the market, looking for value, and having a long-term horizon, and staying the course when investing.
“The world is full of foolish gamblers, and they will not do as well as the patient investor.”
“Patience can be learned. Having a long attention span and the ability to concentrate on one thing for a long time is a huge advantage.”
“Warren and I don’t focus on the froth of the market. We seek out good long-term investments and stubbornly hold them for a long time.”
Ben Graham, considered the father of value investing said, “Day to day, the stock market is a voting machine; in the long term it’s a weighing machine.” Munger adds, “If you keep making something more valuable, then some wise person is going to notice it and start buying.”
Favors Value Investing
Although Munger admired Ben Graham, he has been more critical of him than Buffett who was a student of his and worked him. Munger is a value investor, calling it “intelligent investing” as you are seeking better prospects than what it costs you to purchase.
Investors Need To Learn More And Make Adjustments
Continue learning is a common thread used by Charlie Munger, like his partner, Warren, who devours hundreds of pages of readings to stay rational and current with the world.
“You have to keep learning if you want to become a great investor. When the world changes, you must change.”
“If you don’t see the world the way it is, it’s like judging something through a distorted lens.”
On making substantial investments in railroads, he said, “Warren and I hated railroad stocks for decades, but the world changed. Finally, the country had four huge railroads of vital importance to the American economy. We were slow to recognize the change but better late than never.”
“If you don’t care whether you are rational or not, you won’t work on it. Then you will stay irrational and get lousy results.”
“A great company keeps working after you are not; a mediocre company won’t do that.”
Related Reading: Best Warren Buffett Quotes: A Treasure of 16 Investing Tips
Be Mindful of Taking High Risks
Charlie Buffett has been vocal about using leverage for potential investment gains which
“There is no such thing as a 100% sure thing when investing. Thus, the use of leverage is dangerous. A string of wonderful numbers times zero will always equal zero. Don’t count on getting rich twice.”
On becoming rich, Charlie said, “You don’t, however, need to own a lot of things in order to get rich.”
You have to keep learning if you want to become a great investor. When the world changes, you must change.
Munger’s Extraordinary Legacy
At 99, Munger can sound youthful in his thoughts. However, the reality is likely that Charlie is thinking about the deep legacy he will leave us.
“You can learn a lot from dead people. Read of the deceased you admire and detest.”
“All I want to know is where I’m going to die, so I’ll never go there. And a related thought: Early on, write your desired obituary– and then behave accordingly.”
Warren Buffett is better known than Vice Chairman Charlie Munger, though the latter is integral to their partnership in managing Berkshire Hathaway for 58 years. They are known for their philosophical lessons on money, investing, and ethics. To many, they are American treasures.
With a passion for investing and personal finance, I began The Cents of Money to help and teach others. My experience as an equity analyst, professor, and mom provide me with unique insights about money and wealth creation and a desire to share with you.