The companion of US investor legend Warren Buffett is dead: Charlie Munger died shortly before his 100th birthday. He founded and ran the investment company Berkshire Hathaway with Buffett.
US investor Warren Buffet’s long-time companion, Charlie Munger, is dead. According to a statement from Buffett, he died on Tuesday morning in a hospital in the US state of California. The investor legend’s closest confidant and companion would have been 100 years old on January 1st.
Without Munger’s “inspiration and wisdom,” the joint investment holding company Berkshire Hathaway would never have become so big, Buffett, who is now 93 years old, emphasized in the statement. Munger was active with Buffett at Berkshire Hathaway for decades. He was deputy head of administration and one of the largest shareholders. This also made him a billionaire.
Insurance, railways, high-tech
The investment company Berkshire Hathaway has stakes in many companies worldwide, including the insurer Geico, the railway company BNSF and the battery manufacturer Duracell. Berkshire also has large stakes in Apple, the credit card company American Express, Coca-Cola and the oil multinational Chevron.
Berkshire Hathaway’s shares on the US stock exchange are one of the most profitable in stock market history. In 1962, Buffett and Munger bought shares in the former textile company in New England for seven to eight dollars before taking them over completely and converting them into their investment vehicle. Today, a single Berkshire Hathaway A share is worth around $546,000 on the New York Stock Exchange (NYSE). A $1,000 investment in Berkshire Hathaway in the mid-1960s is worth more than $10 million today.
Success with value investing
The two later star investors met in 1959 at a party in Omaha, Nebraska, where Berkshire Hathaway’s headquarters are still located today. As the book “Poor Charlie’s Almanack: The Wit and Wisdom of Charles T. Munger” shows, they got along very well at the meeting and stayed in touch. They exchanged ideas for investments and sometimes bought shares in the same company. Both investors shared economist Benjamin Graham’s investment philosophy, which is summarized as “value investing.” The focus is primarily on well-managed companies whose shares are undervalued.
Berkshire’s instinct for good deals ensured that its investments in various companies performed significantly better than the average stock market over the years. Charlie Munger played a significant role in this: “Charlie taught me a lot about evaluating companies and about human nature,” Buffett said in 2008. Buffett also said he called Munger for advice before every big decision pull.
Billion-dollar chocolate business
One of the first major deals under Buffett and Munger’s new philosophy was the purchase of the American chocolate chain See’s Candies in the early 1970s. Berkshire paid three times more than the company was worth – but See’s generated more than $2 billion in profits over the years, making it a lucrative investment.
Until shortly before his death, Munger was also involved in Berkshire’s last major investments. He is considered the driving force behind early investments in technology companies such as the Chinese electric car and battery specialist BYD. Berkshire also stocked up on Apple shares – while the price already seemed too high to many investors. But inspired by the success of the iPhone, the price rose significantly higher.
General meetings in Omaha as a pilgrim meeting
At the legendary annual general meetings in Omaha at the company’s headquarters in Nebraska, Buffett and Munger always put on a show on the podium for shareholders who came like pilgrims from all over the world to the shareholder meeting. While Buffett often acted as the “Oracle of Omaha” in a meaningful way, Munger often provided humorous interludes. While the Internet bubble was bursting in 2000, at the 2000 shareholders’ meeting, when asked about the consequences of speculation, Buffett gave a long, serious answer about pyramid schemes. Munger remarked succinctly and dryly: “If you mix raisins with feces, it remains feces.” Munger also had a similar assessment of cryptocurrencies, which he called for to be banned this year because they were like gambling.
Until shortly before his death, Munger hosted his Friday lunches, to which young start-up entrepreneurs were regularly invited. He once told the Wall Street Journal that his favorite pastime was “figuring out what works and what doesn’t – and why that is.”