TODAY’S ROLE MODEL, CHARLIE MUNGER, VICE CHAIRMAN OF THE BOARD, BERKSHIRE HATHAWAY
Disclaimer: Good Day, Readers. WealthBuildingPowers blog is a financial literacy/competency blog and does not provide specific investment recommendations.
CHARLIE MUNGER, VICE CHAIRMAN OF THE BOARD, BERKSHIRE HATHAWAY – TODAY’S ROLE MODEL
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Charlie Munger died on November 28, 2023, at 99. As the Vice Chairman of Berkshire Hathaway Inc., Munger played a pivotal role in the company’s success, with Buffett acknowledging his indispensable contribution, stating, “Berkshire Hathaway could not have achieved its present status without Charlie’s inspiration, wisdom, and active involvement.”
Warren Buffett, boasting a net worth of approximately $120 billion, owes a significant part of his success and wealth to his partnership with Mr. Munger. Charlie Munger, hailing from an ordinary American family, climbed the financial ladder to amass a fortune worth several billion dollars, and remarkably, he generously donated most of it. I want to be like Charlie Munger when I grow up!
My admiration for Charlie Munger intensified when I attended an annual shareholder meeting with him and Warren alongside 40,000 delighted shareholders. Charlie’s brilliance is unparalleled, and he is a master of concise communication, often content with a single-word response when the answer is a definitive “NO.” During the six-hour stage session, I marveled at Charlie and Warren’s ability to field questions from shareholders and analysts without a TelePrompTer, binders, notes, or assistants whispering answers. Their performance was a testament to their extraordinary memory and detailed recall, leaving an impression on me.
DISCOVERING BERKSHIRE HATHAWAY
In the early 1990s, my introduction to Berkshire Hathaway came from my good friend Shirley. The revelation that a single share was valued at around $25,000.00 left me in disbelief. I’m sure I uttered an “F” word, fruitcake, when she told me that price. At that time, the names Warren Buffett, the CEO, and Charlie Munger, the Vice Chairman, were vaguely known to me, and unfortunately, I chose not to invest. Fast forward to today, and that $25,000.00 share has skyrocketed to an impressive $524,414.00 as of December 1, 2023 – a regrettable missed opportunity. {In school, the teachers would make you go to the board to write something for misbehaviors. I should have been assigned a board to write IDIOT repeatedly.}
In 1996, Berkshire Hathaway introduced a Class B share at ~$24.00 per share. Having familiarized myself with the remarkable leadership of Buffett and Munger, I made my initial investment in Berkshire Hathaway stock. As of December 1, 2023, the share price has surged to $357.07 per share.
CHARLIE’S WIT
I have attempted to emulate his excellent pieces of advice below. STILL TRYING!
READING:
“You’d be amazed at how much Warren reads – at how much I read. My children laugh at me. They think I’m a book with a couple of legs sticking out.” Regularly reading business newspapers and magazines exposes me to an enormous amount of material at the micro level. What I see going on there pretty much informs me about what’s happening at the macro level.”
AVOID STUPIDITY:
“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid instead of trying to be very intelligent,”
LEARNING:
“I constantly see people rise in life who are not the smartest, sometimes not even the most diligent, but they are learning machines. They go to bed every night a little wiser than when they got up and boy does that help—particularly when you have a long run ahead of you.”
SIT ON YOUR ASS:
“There are huge advantages for an individual to get into a position where you make a few great investments and just sit on your ass: You are paying less to brokers. You are listening to less nonsense. And if it works, the governmental tax system gives you an extra 1, 2 or 3 percentage points per annum compounded.”
MARRIAGE:
“I think life is a whole series of opportunity costs. You know, you got to marry the best person who is convenient to find who will have you. Investment is much the same sort of a process.”
MASTERING OUR EMOTIONS:
“Many people with high IQs are terrible investors because they’ve got terrible temperaments. And that is why we say having a certain temperament is more important than brains. You need to keep raw, irrational emotions under control. You need patience and discipline, and an ability to take losses and adversity without going crazy. You need an ability not to be driven crazy by extreme success.”
PROBLEM-SOLVING:
“Invert, always invert: Turn a situation or problem upside down. Look at it backward.”
PASSION:
“You’ll do better if you have passion for something in which you have aptitude. If Warren Buffett had gone into ballet, no one would have heard of him.”
MISMANAGEMENT:
“Invest in a business any fool can run, because someday a fool will. If it won’t stand a little mismanagement, it’s not much of a business.”
SUCCESS:
“It’s so simple. You spend less than you earn. Invest shrewdly, and avoid toxic people and toxic activities, and try and keep learning all your life, etcetera etcetera. And do a lot of deferred gratification because you prefer life that way. And if you do all those things you are almost certain to succeed. And if you don’t, you’re gonna need a lot of luck.”
OLD AGE AND LIFE:
“The best armor of old age is a well-spent life preceding it.”
BUCKET LIST:
“I would have paid any amount to catch a 200-pound tuna when I was younger. I never caught one. There are things you give up with time.” For my fishing readers, if you catch a 200-pound tuna after wrestling that monster in, give Charlie a shout-out and release that beast!
GIVING
Charlie Munger built his net worth to several billion dollars. He donated most of his wealth to causes he believed before his death. If you want to know more about this role model, I suggest the book “Poor Charlie’s Almanack, The Wit and Wisdom of Charlie Munger.”
Warren Buffett lost his friend, and Berkshire Hathaway shareholders lost a great man and leader.
Rest in Peace, Charlie Munger
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ABOUT ME
I am a proud nerd (as my beautiful wife and daughter have told me) investment and finance blogger with an NC. State, Chemical Engineering, University Rutgers, MBA and Harvard University, Advanced Management education.
I left a corporate career because I desired to make a difference as a speaker and writer. I was blessed to be coached and mentored by strong women and men in my family and professional life. It is my time to serve and give back.
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I started my first business at ~13 years of age (a small but brilliantly created plant nursery). I am a successful investor in stocks, options, and real estate and am happy to share my finance and investment lessons. I am NOT a licensed financial advisor. Please do not construe my suggestions on this blog as recommendations for your situation. As an investor, you must establish your risk/loss tolerance. Investment in any asset involves risk, including complete loss.
Please seek your licensed CPA or fiduciary financial advisors for individual financial advice.
I write this weekly blog to make an impact by reaching an audience and demonstrating the need for financial literacy. I will help you get there.
