Broker Check

Lessons from Charlie...

December 01, 2023

Charlie Munger was one of the great ones. While he may not have been the face of Berkshire Hathaway, he was Warren Buffet's equal. For 60 years, they stood side-by-side as partners and ran one of America's most successful and enduring companies.  

At age 35, Mr. Munger was introduced to a then 29-year-old Buffett in Omaha, Nebraska. From that first meeting began a lifelong friendship and business partnership that has created hundreds, if not thousands, of millionaires. 

The only problem was that at the time of their meeting, they couldn’t possibly have known the magnitude of the empire they were about to spend the next 60 years building. 

You see, with Charlie Munger, nothing ever came easy: 

  • At 29, Charlie divorced his wife and lost everything. 
  • At 32, his son died of Leukemia, and with no health insurance, he lost everything again. 
  • He had one eye removed, which left him half-blind for the rest of his life. 

Despite this, he accumulated wealth even before he ever met Warren Buffett. Charlie Munger epitomized "the night is darkest before the dawn."  

He leaves behind an investment legacy that will likely never be topped. He was a walking investment encyclopedia (or walking Google for the millennial readers of our Blog). He had a lot to teach us, and here are just a few of his more memorable thoughts: 

ON BRILLIANCE BEING OVERRATED AS AN INVESTOR: “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. There must be some wisdom in the folk saying: ‘It’s the strong swimmers who drown.’” 

ON HARD WORK: “Koreans came up from nothing in the auto business. They worked 84 hours a week with no overtime for more than a decade. At the same time, every Korean child came home from grade school and worked with a tutor for four full hours in the afternoon and the evening, driven by these Tiger Moms. Are you surprised when you lose to people like that? Only if you’re a total idiot.” 

ON PATIENCE AND DISCIPLINE IN INVESTING: “It’s waiting that helps you as an investor, and a lot of people just can’t stand to wait.” 

ON CAPITALISM & POLITICS: “If we’re going to prosper, we have to work. We have to have people subject to carrots and sticks. If you take away the stick the whole system won’t work. You can’t vote yourself rich. It’s an idiotic idea.” 

ON THE IMPORTANCE OF TEMPERAMENT: “If you’re not willing to react with equanimity to a market price decline of 50% two or three times a century, you’re not fit to be a common shareholder and you deserve the mediocre result you’re going to get compared to the people who do have the temperament, who can be more philosophical about these market fluctuations.” (This one is my personal favorite!) 

BONUS: ON THE VALUE OF READING: "In my whole life, I have known no wise people who didn't read all the time--none, zero. You'd be amazed at how much Warren reads--and how much I read. My children laugh at me. They think I'm a book with a couple of legs sticking out." 

While his quotes were often captured and repeated, he lived by a few easy rules: 

  • Spend less than you earn.
  • Invest prudently.
  • Avoid toxic people and toxic activities.
  • Defer gratification.
  • Never Stop Learning 

He said this about these easy rules: “If you do all these things, you are almost certain to succeed, and if you don’t do these things, you’re going to need a lot of luck, and you don’t want to need a lot of luck.” 

You will be missed, Mr. Munger. May you eternally Rest in Peace. 

Stay the course, my friends.