Charlie Munger at Berkshire Hathaway’s annual meeting in Los Angeles California. May 1, 2021.
Gerard Miller
As Charlie Munger’s admirers around the world mourn the loss of one of the most influential investors ever, a deep gratitude and appreciation spread – for his unparalleled business acumen as well as his uniquely sharp tongue.
Munger, the vice chairman of Berkshire Hathaway, who died on Tuesday one month before his 100th birthday, left his mark on generations of investors in many ways thanks to a long and fruitful life.
First and foremost, Munger’s investment philosophy rubbed off on none other than Warren Buffett, giving rise to the sprawling conglomerate worth nearly $800 billion that Berkshire is today.
Early in their careers, Munger broadened Buffett’s investment approach, eventually steering the younger Buffett away from buying dirt cheap, “cigar stub” companies that might still have some smoke in them, to instead focus on quality companies selling at fair prices.
“Certainly as Berkshire shareholders, we owe them a debt of gratitude because the sooner you get a good decision, the better,” Bill Stone, chief investment officer at Glenview Trust, said in an interview. Such timing creates a “compounding” effect, he said.
Recognizing good business
Matt McLennan, co-head of the global value team and portfolio manager at First Eagle Investments, a longtime Berkshire investor, recalled a meeting with Munger more than 15 years ago where he asked how he and Buffett spent their time, given his claim. that they made investment decisions in just minutes.
“Charlie answered ‘reading,’ which struck me as quite apt given his uncanny ability to build mental models of how the world works and use these models as a forward basis for effective decision-making,” McLennan told CNBC.
Munger has long emphasized the importance of recognizing a good business before it is widely seen as such, and he has done so many times in his storied career.
He made a shrewd bet on Chinese electric car maker BYD that proved a big winner. Berkshire first bought BYD in 2008, and the investment has since grown to a multibillion-dollar position in the world’s largest electric car maker.
Munger was also a loyal supporter of Costco Wholesale Corp., calling it one of the best investments of his life. He invested in the retailer before it merged with Price Club in 1993.
Costco
Never following the crowd
Unlike Buffett, who often wraps a piece of criticism in a folk tale, Munger tended to speak bluntly, sprinkling his remarks with unforgettable jokes.
As a longtime cryptocurrency skeptic, he never minced words when it came to his criticism, saying that digital currencies are a malicious combination of fraud and illusion. He also called bitcoin a “turd”, “worthless, artificial gold” and that trading digital tokens is “just insanity”.
When SPACs — special purpose acquisition companies — enjoyed a short-lived boom in 2021, Munger said “it’s just the investment banking profession will sell s— as long as s— can be sold.”
“The thing I really appreciated was that he was so blunt,” said Stone of Glenview Trust. “It’s quite refreshing because most people in the world are forced to be a bit careful about what they say or just want to be liked. He had something special and I never took it as malicious.”
John Rogers, co-chief executive at Ariel Investments, respected Munger’s no-nonsense “disrespect” to the end.
“He was a real contrarian. He didn’t care what other people thought,” Rogers said this week at the CNBC CFO Council Summit. “I think to be a successful investor, it’s critical that you don’t follow the crowd. You think independently, and he was someone who really did that.”
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