Charlie Munger, the longtime business partner and close friend of Warren Buffett, passed away on November 28, 2023, at the age of 99. Born and raised in Omaha, Nebraska, Munger’s deep connection with Buffett began in 1959, leading to a remarkable partnership that spanned decades. Their bond transformed Berkshire Hathaway into the multinational conglomerate it is today. Munger’s approach to life, business, and investment left a lasting impact, not only on Buffett but on the business world as a whole.
A Strong Friendship and Partnership
Warren Buffett and Charlie Munger were both born and raised in Omaha, Nebraska, forming a lifelong bond that would shape the course of Berkshire Hathaway. Their friendship, which began in 1959, evolved into a highly successful business partnership, with Munger joining Berkshire Hathaway as vice chairman in 1978. Under their combined leadership, the company grew from a struggling textile manufacturer to a global investment powerhouse valued at over $780 billion.
Charlie Munger’s Influence at Berkshire Hathaway
As vice chairman of Berkshire Hathaway, Munger played a pivotal role in the company’s transformation. His investment philosophy, which emphasized caution, discipline, and a long-term focus, helped guide the company through various market challenges. Buffett himself credited Munger for refining his approach to investing, particularly in identifying high-quality companies and making investments that could generate steady returns over decades. Despite having differing opinions at times, the two had a mutual respect and a shared vision for success, which allowed them to work together harmoniously without ever having a significant argument in over 60 years.
A No-Nonsense Approach to Business and Life
Munger’s approach to business was grounded in simplicity and rationality. He often spoke about the importance of avoiding unnecessary risks and avoiding “crazy” decisions. He believed in living a modest life, rejecting extravagant spending and focusing on what truly worked. Unlike many wealthy individuals, Munger lived in the same modest house for 70 years and was known for his skepticism toward trends like cryptocurrency, which he famously dismissed as “crypto crap.”
Munger’s commitment to frugality extended beyond his personal life into his business decisions. He consistently advised companies, including Berkshire Hathaway, to focus on sustainable growth rather than chasing fleeting trends. His influence shaped companies like Costco, where his advice on sticking to core principles and avoiding distractions played a crucial role in the company’s long-term success.
Charlie Munger’s Legacy
Charlie Munger’s impact extended far beyond Berkshire Hathaway. His advice and philosophy shaped the decision-making processes of several successful companies, including Costco. He believed in the power of clear thinking, discipline, and avoiding mistakes—principles that continue to guide investors and business leaders today.
Munger’s legacy is one of rational decision-making, unwavering discipline, and the ability to see the long-term picture. His ability to avoid common mistakes, reject unnecessary risks, and focus on what truly mattered made him one of the most respected investors of his generation. While he may no longer be with us, his principles and wisdom continue to influence the world of business and investing.
For future generations of investors and entrepreneurs, Munger’s advice remains as relevant as ever: Avoid excess, stay disciplined, and most importantly, always think clearly.
