Source: Golden Finance, CNN, CNBC, Reuters;
Known for his role as Vice Chairman of Berkshire Hathaway and for his close collaboration with Warren Buffett, Munger is a legend in the world of finance and investment. Warren Buffett said in a statement: "Berkshire Hathaway would not have been where it is today without Charlie’s inspiration, wisdom and involvement. ”**
Munger is the vice chairman of Berkshire Hathaway and one of its largest shareholders, with shares valued at approximately $2.1 billion as of March 2, 2022. As of early 2023, his total net worth is around $2.5 billion. Munger has repeatedly criticized cryptocurrencies and AI during his lifetime.
First, Munger and his people
Charles Thomas Munger, nicknamed “Charlie,” was born on January 1, 1924, in Omaha, Nebraska. His father, Alfred, was a lawyer, and his mother, Florence Florence “Toody” came from a wealthy family. Like Buffett, Munger worked at Buffett’s grandfather’s grocery store when he was younger, but the two future partners didn’t meet until years later. **
At the age of 17, Munger left Omaha for the University of Michigan. Two years later, in 1943, at the age of 19, Munger left the University of Michigan to serve in the U.S. Army during World War II, according to Janet Lowe’s 2003 biography, “Damn the Right!” After the war, Munger attended Harvard Law School and graduated magna laude in 1948 and moved to Southern California, where he practiced law in the real estate business.
The military sent him to study meteorology at the California Institute of Technology in Pasadena. In California, he fell in love with his sister’s roommate at Scripps College, Nancy Huggins, whom he married in 1945. Although Munger never completed his undergraduate degree, he graduated magna laude from Harvard Law School in 1948, and the couple moved back to California.
Munger and his wife had three children, daughters Wendy and Molly, and son Teddy, who died of leukemia when he was 9 years old. The Mungers divorced in 1953.
Two years later, he married Nancy Barry, and the two met on a blind date at a chicken dinner restaurant. The couple had four children: Charles, Emily, Barry, and Phillip. He was also the stepfather of her other two sons, William Harold Bothwick and David Bothwick.
He has practiced real estate law in California. He founded the law firm of Munger, Tolles & Olson in 1962 and focused on managing investments in Wheeler, Munger & Co., a hedge fund he founded that same year.
“I’m proud to be an Omaha boy,” Munger said in a 2017 interview with Dean Scott Deru, president of the Michigan Ross School of Business. “I sometimes use the old saying, ‘They took this boy out of Omaha, but they never took Omaha out of this boy.’” 'All these old-fashioned values – family first; You are able to help others when they are in trouble; prudent and wise; The moral obligation to remain rational is more important than anything else—more important than rich, more important than important—it is an absolute moral obligation. ”**
In California, he worked with Franklin Otis Booth, a founding family member of the Los Angeles Times, on a real estate practice. One of their early developments was a lucrative condominium project on Booth’s grandfather’s property in Pasadena. (Booth, who died in 2008, was introduced to Buffett by Munger in 1963 and became one of Berkshire’s largest investors.) ）
“I have five real estate projects,” Munger told Drew. "I did it for a couple of years at the same time, and in just a few years, I had $3 million to $4 million. ”
**Munger closed the hedge fund in 1975. Three years later, he became vice chairman of Berkshire Hathaway. **
Second, Warren Buffett and Munger
In 1959, at the age of 35, Munger returned to Omaha to end his late father’s law firm. It was then that one of Buffett’s investor clients introduced him to Buffett, who was 29 years old at the time. The two hit it off and kept in touch despite being half a continent apart.
In 1977, Warren Buffett recalled in an interview with the Omaha World Herald, "We were very similar in our thinking, and it was creepy. He was the smartest and most tasteful person I ever met. ”**
Munger officially joined Berkshire Hathaway as vice chairman in 1978, and for most of his career, he was best known as Buffett’s playful deputy, often offering blunt advice on the stock market and the economy.
He is known for his incisive humor, which delights big fans of Berkshire Hathaway. “We wouldn’t be as rich if people didn’t make mistakes often,” Munger said at Berkshire Hathaway’s annual shareholder meeting in 2015.
In 2018, Warren Buffett told CNBC’s Becky Quick, “We’ve never had an argument since we met, and it’s been almost 60 years now.” Charlie gave me the ultimate gift. He made me a better person than everyone else. **… Over time, he gave me a lot of good advice. … My life has changed for the better because of Charlie. ”
Buffett noted in 2021 that after their first meeting, he knew that "I’m not going to find anyone like this again… We hit it off. ”**
The convergence of the two ideas focuses on value investing, i.e., stocks are chosen because they appear to be undervalued based on the company’s long-term fundamentals.
Munger once said, “All smart investments are value investments – you get more than you give.” "You have to value a business to value a stock. ”
Berkshire Hathaway CEO Warren Buffett (left) and Vice Chairman Charlie Munger attend the 2019 Annual Meeting of Shareholders in Omaha, Nebraska, May 3, 2019.
But in early 2020, Berkshire suffered a massive $50 billion loss in the first quarter, and Munger and Buffett were more conservative than when they invested in the U.S. during the Great Recession. Airlines and financial institutions such as Bank of America and Goldman Sachs have been hit hard by the economic downturn.
Munger told the Wall Street Journal in April 2020: "Well, I would say that when the worst typhoon ever, we were basically like the captain of a ship. "We just want to survive the typhoon, and we’re going to get out of it with a lot of liquidity instead. ** We’re not going to play ‘Oh gosh, oh gosh, it’s going to be all over, let’s put 100% of our reserves’ [for buying a business]. ”
3. Munger’s views on cryptocurrencies and AI during his lifetime
Munger has made several critical remarks about cryptocurrencies and Bitcoin during his lifetime, and has also warned about the overhype of AI.
1. Munger is not bullish on cryptocurrencies
Munger sees crypto assets as a destabilizing and unproductive financial invention and likens Bitcoin to a “stinky ball” thrown into the refined recipe of traditional finance, emphasizing the importance of strong money in the transition from primitive societies to advanced civilizations, noting that the solidity of money is always paramount, whether it is a shell or a gold coin. "Don’t get me talking about Bitcoin, that’s the dumbest investment I’ve ever seen. Most of these investments will go to zero. ”**
Munger was ashamed of the U.S. government’s lax regulatory approach so far, calling for a total ban on cryptocurrencies and calling those who believe in cryptocurrencies “idoits.” Charlie Munger said that cryptocurrencies are very stupid and dangerous, and that it is completely wrong for the U.S. government to allow this, and I would not be proud that the U.S. allows cryptocurrencies, and I think cryptocurrencies are ‘shit’.
Charlie Munger published an article in the Wall Street Journal on February 1 titled “Why the U.S. Should Ban Cryptocurrency”. In recent years, privately owned companies in the United States have issued thousands of cryptocurrencies, large and small, that can be traded publicly without prior government approval, the article said. And this also leads to loopholes in the market, causing frenzied speculation, which leads to huge losses. Because in some cases, a large portion of the cryptocurrency is sold to the promoter at almost zero price, and then the public buys it at a higher price without being fully informed. These crazy and confused acts of capitalism, as the American writer Mark Twain often said, “a crook calls a hole in the land he owns a mine”.
2.AI overhyped
Munger thinks AI is overhyped and it may get more than it deserves. He pointed out that artificial intelligence has been around for a long time, and its roots can be traced back to the 50s of the last century. We’ve actually had artificial intelligence all the time. But we’re a little worried about AI because there’s no way we can’t uninvent it, and old-fashionintelligence works just as well. **
3. Criticism of other areas
Bank of America ‘flooded’ with non-performing commercial real estate loans
** A storm is brewing in the U.S. commercial housing market, with U.S. banks flooding what he calls nonperforming loans as real estate prices fall. In an interview with the Financial Times, he said: "It’s nowhere near as bad as it was in 2008. But the banking industry can also run into trouble, just like everywhere else. In good times, you develop bad habits… When bad times come, they lose too much.
Fourth, the multi-faceted Munger: philanthropist and architect
Munger donated hundreds of millions of dollars to educational institutions, including the University of Michigan, Stanford University, and Harvard Law School, often stipulating that schools must accept his architectural designs, even though he had no formal training as an architect. **
Munger served on the board of directors of Harvard-Westlake Preparatory School in Los Angeles for decades, and during the construction of the Science Center in the ‘90s, he ensured that the girls’ bathrooms were larger than the boys’ rooms.
“Whenever you go to watch a football game or event, there is a long queue outside the women’s restroom. Who doesn’t know that they go to the toilet differently than men?” Munger told The Wall Street Journal in 2019. “What kind of idiot would make a men’s restroom the same size as a women’s restroom?” The answer is, an ordinary architect!"**
Munger was married to Nancy Barry for 54 years until her death in 2010, and they donated $43.5 million to Stanford University to help build Munger graduate student housing, which could accommodate 600 law and graduate students.
In February 2019, CNBC’s Quick was asked in an interview with “Squawk Box” about the secret to a long and happy life, and Munger said the answer was “simple because it’s so simple.”
"You don’t have too much jealousy, you don’t have too much resentment, you don’t overspend on your income, and you stay happy despite your troubles. You deal with reliable people and do what you’re supposed to do. All of these simple rules are effective in changing your life for the better. He said.
Fifth, industry insiders expressed condolences for Munger’s passing
CEO Warren Buffett said in a press release: "Berkshire Hathaway would not have been where it is today without Charlie’s inspiration, wisdom and involvement. ”
"For decades, the two of them have led an investment giant that has dramatically improved the lives of many people… And in the process, they have repeatedly demonstrated the power of collaboration, synergy, and common sense. Mohamed El-Erian, chief economic adviser at Allianz, said in an article published on the X website: "May you rest in peace, Charlie. ”
“His impact extends far beyond the investment community. People found out about him, thinking they were going to learn how to make money, but they got a lot more,” Whitney Tilson, an investor and expert on Warren Buffett and Munger, told CNN. “If you only have a hammer, the world looks like a nail,” he said. ”
6. The end of an investment era
Munger’s death marked the end of an era of investment in corporate America.
Perhaps the most significant change for the public since Munger’s death was Berkshire Hathaway’s annual weekend, which attracts tens of thousands of people to Omaha and broadcasts live around the world.
Munger will no longer be on the same stage as Buffett and answer dozens of shareholder questions in five hours.
“The Annual Meeting would never have been the same without Charlie’s concise, open-ended and honest comments,” said Lanzis, president of Lountzis Asset Management in Wyomising, Pennsylvania. "He’s very different from Warren Buffett, in the sense that Munger says what he thinks and doesn’t care what other people think. ”
Munger, who is worth $2.7 billion, reportedly commented on global markets just a few weeks ago. For example, he told the Acquired podcast that Buffett’s decision to invest billions of dollars in Japan was “taken for granted.”
“It’s all too easy to get the money,” Munger said with his characteristic simplicity. "It’s like God opening a box and pouring money into it. ”
