Charlie Munger’s legacy loomed large at Berkshire Hathaway’s annual meeting. With his death, perhaps the most prominent and enduring of business partnerships came to an end. Shareholders gave a standing ovation, Buffett accidentally called Greg Abel “Charlie”, and answered a poignant question about how he would spend one more day with his dear departed friend.
Investing is a lonely path and having a partner and sparring partner like Munger is invaluable. I’ve been reflecting on how he influenced Buffett and Berkshire and how we could each find our version of someone like him (for Munger’s take on Berkshire, see his 50-year analysis).
Munger of course influenced many of Buffett’s decisions, most notably the pivot to business quality starting with the acquisition of See’s Candy. As Buffett recalled in 2013, “Charlie was the one that said, ‘For God’s sakes, Warren, write the check.’”
But, as I explored in 'Warren E. Buffett, An Alternate History', Munger also helped Buffett early on, when the latter’s big bet on Dempster Mill was failing. “We were going to dinner with the Grahams and the Mungers,” Buffett recounted. “I’m telling Charlie, ‘I’m in this mess with this company; I’ve got this jerk running Dempster, and the inventories keep going up and up.’”
“Well, I know this guy that used to bring around tough situations,” Munger responded and connected Buffett with turnaround specialist Harry Bottle. Buffett had made Dempster a large position in his fund and later called Bottle perhaps “the most important management decision” he had ever made. “If Dempster had gone down,” he noted, “my life and fortunes would have been a lot different.”
Without help from Munger, Buffett might have sworn off taking control of challenging businesses — perhaps he would never have touched an ailing textile mill called Berkshire Hathaway…
At Berkshire, Munger became the “abominable no-man” for pushing back on Buffett’s investment ideas. Buffett could be “pretty rigid,” his biographer Alice Schoeder pointed out, “and doesn't really listen. He has incredibly firm convictions and is often right, to say the least.” Munger was one of the few who could meet Buffett's intellect and was never afraid to voice his opinion.
Munger’s role was crucial because even the masters have their strengths and weaknesses, their biases and blind spots.
But that’s just the tangible “return on relationship”. What is at least as important are the decades of shared friendship, learning, and joy. As Buffett recalled, he and Munger had fun together, especially when digging themselves out of the occasional hole of a mistake.
“We’re old-fashioned. We’re boringly trite,” Munger once said. “All the old virtues still work.” And what could be a better example of the ‘old virtues’ than this lifelong friendship rooted in mutual admiration and respect?
How do you find that kind of partner? See the rest of my post on my substack:
https://lnkd.in/ghgwJK5x
