Charlie Munger, 1924-2023
"Spend each day trying to be a little wiser than you were when you woke up. Day by day, and at the end of the day-if you live long enough-like most people, you will get out of life what you deserve."
Yesterday, November 28, 2023, Charles Thomas Munger died peacefully at a California hospital. He was just a month shy of his 100th birthday. Though I never got the chance to meet him, he left a more profound impression on me than almost anyone else in the world.
Charlie was born in 1924 in Omaha, Nebraska. After serving in the Army during World War II and graduating magna cum laude from Harvard Law, he quickly rose in the world. He practiced law and real estate, saving and investing wisely until he could start his own law firm and investment fund, which he did in 1962. His law firm, Munger, Tolles, & Olson, remains one of the most prestigious in the country, and his investment fund, Wheeler, Munger & Co., averaged a 19.8% a year compound annual growth rate for thirteen years, compared to just 5% for the market.
In 1959, Charlie met Warren Buffett at a dinner party. The two became best friends instantly. They quickly started to do business together, and Munger joined Buffett’s Berkshire Hathaway as Vice Chairman in 1978. Together, they built it from a struggling textile mill to one of the most valuable companies on the planet—with holdings in insurance, energy, railroads, consumer goods, and manufacturing, just to name a few. They made legendary investments in See’s Candies, GEICO, Coca-Cola, American Express, BNSF Railway, Berkshire Hathaway Energy, and Apple. Charlie bought his first shares in Berkshire for around $7 in 1962. At market close on the day of his death, his shares were worth $546,869 each.
Munger was involved in many projects outside Berkshire. He was an early investor in Costco, serving on its board of directors until his death. He invested in Chinese businesses through his friend and protégé Li Lu’s Himalaya Capital. He served as chairman and chief stock-picker of the Daily Journal Corporation for decades. He remained an active real estate developer and investor nearly sixty years after his first project. Despite having no formal training, he became an accomplished architect. His passion for building extended to his philanthropy. Throughout his life, he donated over half a billion dollars to charity, mainly student housing and other university buildings, most of which he designed himself.
I first discovered Charlie as a teenager, out of school for COVID, with a lot of newfound time on my hands. I had been a fan of Buffett for a while, but never fully appreciated his right-hand man until I read about him on Farnam Street and Instagram’s @CharlieMungerQuotes. When my mom bought me a copy of Poor Charlie’s Almanack, Munger’s iconic half-biography, half-anthology of speeches, I went through its 600 pages in about two days. I began voraciously consuming not just every Munger speech, shareholder meeting, and interview I could find, but many of the books he recommended. He completely changed the way I think about the world, and was one of the major figures in my move from adolescence to adulthood.
Some people, like John von Neumann, are gifted with nigh-superhuman intelligence. Charlie was gifted with nigh-superhuman rationality, and a knack for communicating it. His mantras for life formed a full operating system: Be honest, trustworthy, and reliable. Sell only what you would buy, work with only people you admire. Learn all the time and think about the world in a multidisciplinary way. Maintain rationality and objectivity at all times no matter what. Learn assiduity—work until the job is done—and equanimity—stoically control your emotions no matter how hard times get. Get rid of selfishness, envy, resentment, and self-pity.
Two pieces of his in particular stood out to me for their incredible clarity and wisdom. Practical Thought About Practical Thought: Turning $2 Million Into $2 Trillion explains in a totally intuitive way how the massive success of Coca-Cola was a result of simple financial and psychological decisions. The Psychology of Human Misjudgment goes through 25 human tendencies that he learned over a lifetime, how they lead to real-world errors, and how to avoid them. Out of everything he’s ever written, I recommend these two the most.
Charlie was a role model for dealing with adversity too. When he was 29, he underwent a painful divorce with his wife of eight years, losing everything. Two years later, his nine-year-old son Teddy died from leukemia. In his fifties, a failed cataract surgery caused him such extreme pain that he had to have an eye removed. He nearly lost his other eye, which would have made him unable to read. He dealt with greater than 50% losses in Berkshire’s portfolio at least three times. And throughout it all, he maintained his hardworking attitude and sense of humor.
Charlie’s was the very model of a life well lived. Despite being worth $2.6 billion (which would be many times higher had he not donated so many Berkshire shares), he did not succumb to loneliness, materialism, and unhappiness as so many rich people do. He was married to his second wife, Nancy Barry Borthwick, for 54 years until her death in 2010. He’s survived by seven children, two step-children, fifteen grandchildren, and seven great-grandchildren, with whom he would go on an annual trip to a family compound in Minnesota every summer for over seventy years. From his many, many, many friends, business associates, shareholders, and fans, he achieved something even more important than wealth: earned respect.
For Charlie’s last-ever Berkshire shareholder meeting last May, my dad and I made it a true Buffett-and-Munger-fan day. We ate breakfast at McDonald’s and watched the meeting while eating See’s peanut brittle and drinking Cherry Coke. At 99, Charlie was still razor-sharp, with the same brevity and wit he displayed decades earlier. Warren would answer questions with his characteristic paragraphs, and Charlie would respond with his own insightful one-liners, just like he always has. I pre-ordered the new Stripe Press edition of Poor Charlie’s Almanack months ago. Charlie never got to see it published, but it’ll be a fixture on my bookshelf for years.
Through his many speeches, talks, and clips of Berkshire Hathaway and Daily Journal shareholder meetings, Charlie served as one of my greatest mentors. He kickstarted me on a journey of self-improvement. He motivated me to start going to the gym. I’ve always wanted to be rich, but Charlie helped me think about how. He introduced me to so many different books, ideas, and fields, often tangentially. For example, without Charlie, I never would have discovered Naval Ravikant, and then David Deutsch, and then techno-optimist Twitter. To this day, whenever I make a decision, I think, WWCD: What would Charlie do? From him, I learned so much about not just investing and business, but life. Whatever success I have in my life, I’ll owe much of it to Charlie.
I’ll close with two of his quotes:
[An] idea that I got very early was that there is no love that’s so right as admiration-based love, and that love should include the instructive dead. Somehow, I got that idea and I lived with it all my life; and it’s been very, very useful to me.
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I think when you're trying to teach the great concepts that work, it helps to tie them into the lives and personalities of the people who developed them. I think you learn economics better if you make Adam Smith your friend. That sounds funny, making friends among ‘the eminent dead,’ but if you go through life making friends with the eminent dead who had the right ideas, I think it will work better for you in life and work better in education. It's way better than just giving the basic concepts.
There’s no eminent dead I’d rather be friends with than Charlie.
Love your podcast and your appearance on the For Humanity podcast!