The Legacy of Charlie Munger

Now Shenzhen   |   December 4, 2023
PHOTO BY: Nick Webb

ON Nov. 28, legendary guru Charlie Munger passed away at the age of 99 at a California hospital. He was known not only as an investing sage but also as a great thinker and a Renaissance genius.

Better known as the right-hand man of Warren Buffet, Munger was the vice chairman of Berkshire Hathaway, which “could not have been built to its present status without Charlie’s inspiration, wisdom and participation,” CEO Buffet said in a statement.

Buffet attributed the great leap forward of Berkshire Hathaway to Munger who instilled in him the notion of paying “decent prices for great companies” rather than buying mediocre companies at great prices, or picking up “cigarette butts,” which Buffet had been very successful in practicing in his earlier investment career.

The partnership between Munger and Buffet, two great minds that found each other spookily alike after their first meeting, had been so successful for Berkshire Hathaway that each year for the past decades, thousands of shareholders had paid their pilgrimage to Omaha at annual investor meetings to admire the duo in person and to attain enlightenment from their insightful and witty comments on investment and economic issues.

Munger owed much of his success in investment and life to his cross-disciplinary approach. He never stopped expanding the horizon of his knowledge and stayed curious and passionate about many fields of sciences and humanity, such as mathematics, medicine, literature, history, philosophy and architecture.

An attorney by trade in his early career, he gradually mastered the skills of investing and made a fortune on his own before joining Buffet and becoming the vice chairman of Berkshire Hathaway. Munger also taught himself to be an architect.

His variety of skill sets enabled him to deal with complicated circumstances from multiple dimensions, to put things into perspective from a distance and to examine them up close, complementing qualitative judgment with quantitative analysis. His ability to observe, be it a company, an industry or a nation, from its historical and cultural context, is unparalleled.

Knowledge and training in diverse subjects endowed him with perspectives unfathomable by most people confined within their respective workspaces and fields of expertise. A true Renaissance talent like Munger can achieve great success in life. Another good example is Jensen Huang, the cofounder and CEO of Nvidia.

Munger was an enthusiastic advocate of reading and lifelong learning. He laid great emphasis on absorbing the masterpieces of the eminent deceased, such as Munger’s own idol Benjamin Franklin. He never stopped reading and improving himself as an investor and as a person.

The application of his wisdom is not limited to investment. Although we cannot reach the level of sophistication in considering the myriad of factors when making decisions, we certainly can follow his guidance and look into matters from more angles, to “consider the totality of risk and effect,” before jumping to conclusions.

Munger preached patience and biding one’s time, but he also underlined the importance of taking a decisive action when presented with the right opportunity, i.e., “extreme patience with extreme decisiveness.”

He was keen to question things and always employed logic and reasoning when confronted with problems, whether investment-related challenges or everyday life issues. This is another valuable piece of advice that certainly benefits us all.

Munger was never shy about speaking his mind on economic, social and political topics. For instance, on the controversial nature of cryptocurrency, he unequivocally labeled it as “crazy, stupid gambling” and asserted that “people who oppose my position are idiots.” He had also urged the U.S. government to ban cryptocurrencies completely.

Like his partner Buffet, Munger believed in giving back to society and making the world a better place. A great philanthropist, Munger gave away at least US$550 million to charities. His big public gifts went primarily to higher education, and he also donated to causes in science, medicine and journalism. Munger will be greatly missed by the financial community, by the fans of his enormous investment success and by the admirers of his insights and wisdom.

SOURCE: Shenzhen Daily