You are about to embark on an extraordinary journey toward better investment and decision-making. You may also gain a deeper understanding of life, all thanks to the wit, wisdom, speeches, and works of Charlie Munger—contemporary Benjamin Franklin. Charlie's worldview is unique; he has cultivated a clear and simple thinking pattern through an "interdisciplinary" approach—yet his views and thoughts are anything but simple. Notice how Charlie's ideas have stood the test of time: the earliest speeches in this book were delivered 20 years ago, yet today, their relevance remains unchanged. As you will soon discover, Charlie's observations and inferences are based on fundamental human nature, basic truths, and core principles from many disciplines.
From 1733 to 1758, Benjamin Franklin disseminated many useful and timeless pieces of advice through "Poor Richard's Almanack." The virtues he praised included frugality, responsibility, diligence, and simplicity.
In the following two centuries, people consistently regarded Benjamin's thoughts on these virtues as ultimate truths. Then Charlie Munger stepped in.
Initially, Charlie was merely a follower of Benjamin, but he soon opened up new horizons. What Benjamin suggested became a necessity for Charlie. If Benjamin suggested saving a few cents, Charlie would demand saving a few dollars. If Benjamin said to be timely, Charlie would say to be early. Compared to Charlie's stringent demands, living according to Benjamin's advice seems too easy.
Charlie has always practiced what he preaches (and oh, how passionately he preaches). In Benjamin's will, he established two small charitable funds aimed at teaching people the magic of compound interest. Charlie decided early on that this was such an important subject that it could not wait until after his death to be taught. So he chose to be a living example of compound interest, avoiding (any) extravagant expenditures that might undermine his role as a model. As a result, Charlie's family members experienced the joy of long bus trips, while their wealthy friends, confined to private jets, missed out on these rich experiences.
Of course, in some areas, Charlie had no intention of improving upon Benjamin's views. For instance, Benjamin's essay "Advice on Choosing a Lover" would elicit Charlie's frequent refrain at Berkshire's annual meetings: "I have nothing to add."
There is only one person who meets all my special requirements, and that is Charlie.
A partner who never follows the crowd and possesses strong logical reasoning skills is one of the best mechanisms you can have.
— Buffett
As for myself, I would like to offer a few "tips on choosing a partner." Please pay attention.
First, look for someone smarter and wiser than you. Once you find them, ask them not to flaunt their superiority, so you can receive praise for many of the achievements that stem from their ideas and advice. You want a partner who, when you make a costly mistake, will neither say "I told you so" nor get angry. They should also be generous, willing to invest their own money and work hard for you without expecting compensation. Finally, this partner will bring you joy as you travel together on the long road ahead.
All of the above is very wise advice (I have never scored below an A in self-assessment tests). In fact, this advice is so wise that I decided to fully adhere to it as early as 1959. And there is only one person who meets all my special requirements, and that is Charlie.
- In Benjamin's famous essay, he stated that men should choose older lovers, providing eight very good reasons. His most critical reason was: "…in the end, they will be eternally grateful."
Charlie and I have been partners for 45 years. I don't know if he chose me for the other seven criteria. But I absolutely meet Benjamin's eighth criterion: my gratitude toward him is beyond words.
From these talks and speeches, it is clear that Charlie believes that life decisions are more important than investment decisions. His thinking models from various disciplines recur, yet he never focuses on "portfolio investment strategies," "beta coefficients," or "asset pricing models," but rather centers on basic axioms, human achievements, human weaknesses, and the rugged path to wisdom. Charlie once said, "Like John Maynard Keynes, I want to become independent by making money." For Charlie, independence is the goal of making money, not the other way around.
"Over the years, reading has brought me many benefits."
Waiting for lunch by the Thames, 1996.
Behind the glorious story of Berkshire Hathaway are two financial geniuses: the widely acclaimed Warren Buffett and his "silent partner," the low-key Charlie Munger.
Charlie is Warren's friend, lawyer, advisor, "archrival" (Warren once called him the despicable "master of saying no"), and one of the largest shareholders of the most successful publicly traded company in American business history. Warren took over Berkshire in 1964, and a few years later, Charlie joined the management team. Since then, the company's market value has astonishingly increased by 13,500 times, from $10 million to $135 billion, and the number of shares outstanding has not increased much. This extraordinary growth is an outstanding achievement by these two Midwestern Americans, who worked together to discover and seize many opportunities that other businessmen continuously missed.
Warren is one of the most respected and well-known business leaders in America, while Charlie deliberately avoids the limelight, choosing a relatively low-profile life. To better understand this complex and extremely low-key businessman, we must start from the beginning. Charlie Thomas Munger was born on January 1, 1924, in Omaha, Nebraska, in the American Midwest. Many famous people are his Midwestern compatriots: Will Rogers, Henry Fonda, John Pershing, Harry Truman, Walt Disney, Ann Landers, Gerald Ford—and of course, Warren Buffett.
Charlie's initial intersection with the Buffett family occurred during his formative years when he worked at the Buffett family grocery store. It was a high-end grocery store in Omaha, just six blocks from the Munger family. The owner was Warren's grandfather, Ernest, who had partial ownership of the store. Ernest was a strict disciplinarian who arranged for the young workers under him to work 12-hour shifts without food or breaks. According to Charlie, his boss's anti-socialist attitude could be seen from the rules he set: the boss required the children to turn in two cents at the end of their shifts, which was the fee mandated by the new Social Security Act. They received a $2 daily wage and a piece of advice: socialism is problematic.
The hard work at the Buffett grocery store benefited both Charlie and Warren for a lifetime. A few years after Charlie left, Warren, six years younger, also worked hard under Grandpa Ernest.
Charlie's formal education began at Dundee Elementary School, where his two sisters, Mary and Carol, were also students, receiving a traditional moral education. Teachers remembered Charlie as a bright child who sometimes acted a bit superior. He enjoyed questioning the worldly wisdom of teachers and classmates with the increasing knowledge he gained from reading various books, especially biographies. Today, he cannot recall when he first encountered the maxims of Benjamin Franklin, but they left an indelible admiration for this eclectic and eccentric politician and inventor. Charlie's parents, Al Munger and Florence Munger, encouraged reading, gifting each child a few books at Christmas; those books were usually devoured that very night.
This scene was destined to be repeated countless times in Charlie's subsequent years: successfully catching big fish at Cass Lake in Minnesota.
Charlie and his wife Nancy aboard the Channel Cat yacht, leaving the coast of Santa Barbara.
The Davis family was a long-time family friend of the Mungers, living very close by, and Charlie often visited their home to browse through various medical journals belonging to Dr. Ed Davis. Ed was his father's best friend and their family doctor. Due to early exposure to Dr. Davis's medical library, Charlie developed a lifelong interest in science. By the age of 14, this precocious and studious boy had also become a good friend of the doctor. Charlie was particularly interested in medicine at that time; he had watched videos of Dr. Davis performing urological surgeries and was fascinated by the statistical results of similar surgeries.
Charlie had a hobby of raising hamsters at home and would occasionally trade them with other kids. His keen negotiation skills were evident even at a young age, as he could usually trade for larger or more uniquely colored hamsters. When he had 35 hamsters, his mother ordered him to stop this hobby because the nests he built for them in the basement were too smelly. Years later, his sister still remembered that before Charlie came home from school to feed the hamsters, the family had to endure their endless squeaking due to hunger.
Charlie attended Central High School, a very large public school considered a good college preparatory school. Most of the teachers were women who were very serious and responsible about their work and students. Central High offered a traditional classical education, and Charlie excelled in it due to his strong logical thinking skills and eagerness to learn.
After his mother taught him to read letters, Charlie started school, making him the youngest and smallest student in his elementary and middle school classes. Due to his small stature, Charlie was not competitive in regular high school sports, so he joined the shooting team; he excelled and received the outstanding representative award, eventually becoming the team captain. His team sweater (which Charlie recalled had large letters embroidered on a very small collar) attracted the attention of many alumni, who were puzzled by how this frail little guy could earn such an award. Charlie was fortunate; his father loved outdoor activities and enjoyed hunting ducks, and was pleased that his son was such a good shot.
"Every smart person I've met (from all walks of life) reads every day—none of them don't. You might be surprised at how much Warren reads and how much I read. My kids joke about me. They think I'm a book with two legs."
Omaha in the 1920s was a melting pot; people of different races and religions coexisted peacefully, doing business with one another, and crime was almost unheard of. The city's residents neither locked their doors nor their car doors; people trusted each other. Children played "kick the can" on warm summer nights and went to see the latest "talkies" on Saturday afternoons, such as "King Kong," which was Charlie's favorite when he was eight.
The 1930s were a difficult time, and Omaha was severely affected by the Great Depression. Charlie witnessed the plight of the poor, which left a lasting impression on him. He saw homeless people wandering the streets, begging for handouts; he also saw people willing to sweep sidewalks or hallways in exchange for a sandwich. Through family connections, Charlie found a boring job watching the comings and goings on the street, earning 40 cents an hour. Charlie preferred this job over lugging heavy boxes at the grocery store.
Central High School emblem
Charlie's grandfather was a respected federal judge, and his father also pursued a legal career, becoming a successful lawyer. Charlie's close relatives were not severely affected by the Great Depression, but some distant relatives suffered greatly. This era provided young Charlie with a real learning experience. His grandfather extended a helping hand, saving Charlie's uncle Tom's small bank in Stromsburg, Nebraska, which taught Charlie about his grandfather's generosity and shrewd business acumen. Due to the poor economic situation and drought-related crop failures, the bank's farmer clients were unable to repay loans. Tom accumulated $35,000 in uncollectible loan notes and came to plead for help from Grandpa Munger. The judge risked half of his fortune, spending $35,000 on the bank's bad loans in exchange for the first mortgage, allowing Tom to reopen after Roosevelt's banking reforms. The judge ultimately recovered most of his investment, but that was many years later.
The Great Depression did not spare Omaha. Charlie's close relatives were not significantly affected, but some of his distant relatives suffered greatly.
Judge Munger also sent his musician son-in-law to pharmacy school and financed the purchase of a well-located pharmacy that had gone out of business due to the Great Depression. This pharmacy later became prosperous, allowing Charlie's aunt to live a secure life. Charlie learned that as long as the Munger family supported each other, they could weather the worst economic collapse in American history.
Fortunately, Al Munger's law firm thrived during the Great Depression, as the U.S. Supreme Court agreed to review a tax case involving a small soap manufacturing company he represented, which brought him a windfall. Coincidentally, the Supreme Court's ruling would also affect industry giant Colgate-Palmolive. Colgate believed that this Midwestern lawyer lacked the necessary experience to win a case in the Supreme Court, so they paid Al to step aside for a famous New York lawyer. This big-city lawyer lost the case, and Al pocketed a substantial fee. He later joked that had he taken the case, he might have lost and earned even less. The exact amount of money was not disclosed, but combined with what Al earned from other clients, it was enough for the Munger family to continue living comfortably during the Great Depression. Charlie also helped ease the family's burden by earning his own pocket money through work, experiencing the value of financial independence.
In 1941, with the Atlantic ablaze with war, Charlie graduated from Central High School and left Omaha to attend the University of Michigan. Charlie chose mathematics as his major because he was attracted to mathematical logic and reasoning. After taking a required science course, he also developed an interest in physics. He was fascinated by the charm of physics and its vast research scope, especially impressed by how physicists like Albert Einstein studied the unknown. Charlie later became keen on solving problems using a physics approach, believing it was an effective technique for handling various life issues. He often said that anyone who wants to succeed should study physics because its concepts and formulas beautifully demonstrate the power of correct theories.
"Due to various factors during World War II, I briefly studied basic physics. This greatly enhanced my intelligence. As a result, I gained more thinking models, so I wouldn't become the 'man with a hammer' in the fable."
At that time, the military urgently needed college-age recruits. Shortly after his 19th birthday, Charlie, having completed his sophomore year at Michigan, joined an officer training program in the U.S. Army Air Corps, which would make him a second lieutenant upon completion. He was sent to the University of New Mexico in Albuquerque to study natural sciences and engineering, and later to the prestigious California Institute of Technology, where he specialized in thermodynamics and meteorology—two subjects crucial for pilots at the time—training to become a meteorologist. After completing his studies at Caltech, Charlie was assigned to a permanent military base in Nome, Alaska.
"I only studied at Caltech for nine months during World War II, when the Air Force sent me there to study meteorology. Back then, and even now, predicting the weather is like using racehorse data to predict race outcomes. If it weren't for the pressure of war, I would have zero interest in meteorology."
During his service, he married a young woman named Nancy Huggins, originally from Pasadena, who was a good friend of his sister Mary at Scripps College. They settled in Albuquerque and San Antonio until Charlie was discharged from the U.S. Army Air Corps in 1946. Shortly after their marriage, Charlie and Nancy had their first child, a boy they named Teddy.
Despite attending several universities, Charlie still did not have a bachelor's degree. Nevertheless, he applied to Harvard Law School under the G.I. Bill, as his father was also an alumnus. He was at a disadvantage without an undergraduate degree, but the former dean of Harvard Law, Roscoe Pound, was a family friend who personally advocated for Charlie. He was admitted, but the admissions office decided to have him take undergraduate courses first.
As a result, Charlie easily succeeded at Harvard, although during this time he offended a few people. Because of his exceptional intelligence (Air Force tests indicated he had a very high IQ), Charlie often acted unexpectedly, which was usually seen as impolite or reckless. In reality, Charlie was just a bit impatient and didn't enjoy joking around with classmates in the classroom. Nevertheless, he was well-liked by most of his peers and thoroughly enjoyed the vibrant student life at Harvard.
- In 1948, Charlie graduated from Harvard Law School, where he was one of 335 students, and one of 12 distinguished graduates. He originally intended to join his father's law firm, but after discussing it with his father, they both agreed that Charlie should develop in a larger city. So he set off for Southern California, a place he had liked since he was a student at Caltech. After passing the California bar exam, he worked at the Wright & Garrett law firm, which later changed its name to Musick, Peeler & Garrett. Charlie built a house in South Pasadena, designed by his architect uncle Frederick Stott; he, Nancy, and their three children—Teddy, Molly, and Wendy—lived in that house.
Harvard Law School Dean Roscoe Pound personally intervened to get Charlie admitted to Harvard.
Although outwardly successful, Charlie's world was not all sunshine. His marriage encountered problems, and he and his wife eventually divorced in 1953. Shortly thereafter, Charlie learned that his beloved son Teddy had been diagnosed with terminal leukemia. This was an unbearable blow for 29-year-old Charlie. At that time, bone marrow transplants had not yet been developed, and leukemia was an incurable disease. A friend recalled that Charlie would visit his dying son in the hospital and then walk the streets of Pasadena in tears.
During this heartbreaking time, his friend and law firm partner Roy Thors arranged for Charlie to meet Nancy Barry Boswick, who lived in Los Angeles, through mutual friends. She was a Stanford graduate, divorced, and had two sons about the same age as Charlie's daughters. Charlie and Nancy shared many common interests and enjoyed each other's company; after several months of dating, they got engaged. They held a small family wedding in 1956, attended by four children aged four to seven (the two daughters of the groom and the two sons of the bride).
Charlie and Nancy lived in Nancy's house in the hilly area of West Los Angeles for several years. Later, to shorten Charlie's commute and for other reasons, they moved to Hancock Park, where they still reside. The house they built was large enough to accommodate their growing family: they later had three more sons and a daughter, totaling eight children. Fortunately, both of them loved children! They also enjoyed golf, the beach, and social clubs. Charlie and Nancy quickly joined the University Club, California Club, Los Angeles Country Club, and Beach Club.
Charlie has always been very interested in the buildings on the streets of London.
With many new responsibilities, Charlie worked tirelessly at his law firm. Even so, his income still did not satisfy him, as lawyers were paid by the hour and it was related to seniority. He wanted to earn more than senior lawyers. Charlie wanted to be someone like the big capitalists among his law firm's clients, especially Harvey Mudd—who later founded a university named after him. With Nancy's support, he made investments outside of his legal practice, seeking other ways to make money. However, he did not forget the iron rule taught by his grandfather: focus on the task at hand and control expenses.
On January 27, 1956, Charlie married Nancy Barry Boswick.
Applying this conservative approach, Charlie seized many opportunities to become wealthy. He began investing in the stock market and acquired shares in several appliance companies—a common practice among lawyers in the mid-1950s and 1960s. This investment benefited both parties: Charlie gained valuable business knowledge, while his clients enjoyed the foresight of a lawyer whose expertise extended beyond just legal matters.
- In 1961, Charlie first ventured into real estate, partnering with his client and friend Otis Booth. They built condominiums on vacant land near Caltech, and this investment was highly successful, with the two partners investing $100,000 and earning a substantial profit of $300,000. Charlie and Otis then successfully developed another project in Pasadena. Charlie later participated in similar projects in Alhambra, California. Through ongoing negotiations and contracts, his business acumen sharpened. He reinvested the profits from these investments into real estate development, leading to increasingly larger projects. By the time he stepped back in 1964, real estate development alone had brought him profits of up to $1.4 million.
"I think if you're buying jewelry for a beloved woman, you probably won't care how much you spend."
In February 1962, he and four colleagues from Musick, Peeler & Garrett formed a new law firm. The original five partners were Roy Thors, Roderick Hills, Dick Esben, Fred Wald, and Charlie. Later partners included Rod's wife Carla and James Wood, an independent practitioner and friend of the Hills family, who importantly had a client. They named the firm Munger, Thors & Hills. Over the years, the firm changed names several times but always began with Munger and Thors. With the addition of Ron Olson, it eventually became Munger, Thors & Olson, abbreviated as "MTO."
For Munger at that time, success in the legal profession was merely the starting point of his career, not the ultimate goal. Almost simultaneously with founding the new law firm, he was also carefully designing an exit strategy from the industry. Charlie, along with Jack Wheeler, established an investment partnership, later joined by Al Marshall. A few years earlier, Charlie had the idea for this investment partnership when his father passed away, and he had to return to Omaha to handle the funeral arrangements. To welcome Charlie home, the children of his friend and physician Dr. Ed Davis arranged a dinner. Ed's two sons, Eddie and Neil, were childhood pals of Charlie, and by then they had become doctors, while their sister Vera was married to Omaha businessman Lee Hishman. The dinner guests included Vera and Lee Hishman, Neil and his wife Joan, and a young man named Warren Buffett.
Charlie knew Warren's family because he had worked at the Buffett family grocery store in his youth; Warren had also heard of Charlie when he was raising investment capital in Omaha a few years prior. Once, Warren met Dr. Davis and his wife Dorothy and explained his investment philosophy to them, and they agreed to entrust a significant portion of their life savings—$100,000—to him. Why? The doctor explained that Warren reminded him of Charlie Munger. Warren did not know Charlie, but at least he had a reason to like him.
Charlie’s father, Alfred Munger, met Warren Buffett while returning home to handle his father's funeral arrangements.
At that homecoming dinner, Charlie and Warren discovered they had many similar ideas. Others at the table could clearly see that this would be a meeting of minds. That night, the two young men—Warren at 29 and Charlie at 35—had a lively conversation covering many aspects of business, finance, and history. If one party had more knowledge in a certain area, the other would eagerly listen.
At that homecoming dinner, Charlie and Warren discovered they had many similar ideas. Others at the table could clearly see that this would be a meeting of minds. That night, the two young men—Warren at 29 and Charlie at 35—had a lively conversation covering many aspects of business, finance, and history. If one party had more knowledge in a certain area, the other would eagerly listen.
Warren was dismissive of Charlie continuing his legal career. He said that while Charlie could treat being a lawyer as a hobby, the money earned from being a lawyer was less than what Warren was making. Warren's logic helped Charlie to abandon his legal career as soon as his financial situation allowed.
After Charlie returned to Los Angeles, their communication continued through phone calls and lengthy letters, sometimes stretching to nine pages. They both understood that they were destined to do business together. There was no formal partnership or contractual relationship—this bond was created by a handshake and embrace between two Midwesterners who understood and trusted each other.
Their partnership brought many benefits: friendship, investment opportunities, and the unique ability to understand each other's thoughts and words. Later, the two institutions they each led began to mutually benefit one another. When Warren invested in or acquired businesses, he would hire the Munger Thors law firm as legal counsel, allowing him access to one of the nation's top law firms, which brought him many benefits. Meanwhile, Munger Thors not only received Buffett's consulting fees but also gained other advantages, as Buffett's reputation attracted more high-end clients to the firm.
However, Munger Thors was not solely profit-driven. Charlie's personal life principles were reflected in the firm, which quietly provided a significant amount of legal aid services to the poor and disadvantaged in the Los Angeles area. To this day, Charlie still influences the firm's lawyers, always reminding them, "Don't just look at the money," and to "choose clients you would want to be friends with." Although Munger left the firm in 1965 after only three years, his influence remains indelible, as evidenced by the fact that his name still ranks among the 175 lawyers at the firm. When he left, he did not withdraw his shares in the company. Instead, he voluntarily transferred his shares to his young partner Fred Wald—who died of cancer, leaving behind a wife and several children.
Charlie's plan for financial independence quickly achieved great success. He partnered with Jack Wheeler to invest and founded Wheeler Munger Company, spending considerable time building the company's asset base. He also spent time participating in various real estate development projects. All investments went smoothly, without major setbacks. At Wheeler Munger Company, Charlie invested in stocks using his own money and that of others. Charlie focused more on getting his capital to work rather than attracting new clients. Because Jack Wheeler had two seats on the Pacific Coast Stock Exchange, Wheeler Munger Company paid very low trading fees, while Wheeler and Munger kept administrative expenses close to zero.
As time passed, Charlie and Warren continued to call and write to each other, sharing their thoughts and investment philosophies. Sometimes they would agree to invest in the same company. Other times, their opinions would diverge. Gradually, their independently made investments began to intersect. Warren invested in Blue Chip Stamps, becoming its largest individual shareholder. Charlie became the second-largest shareholder, and eventually, Berkshire acquired it.
Forbes 400 Rich List
Charlie Munger
$1.6 billion.
Investment industry. Los Angeles.
80 years old. Divorced, remarried; 8 children.
Compared to his partner Warren Buffett, he receives less praise and has significantly less wealth, yet remains an important figure at Berkshire Hathaway. Serving as the company's vice chairman since 1978, he excels in complex investment analysis. He met Buffett in 1959 and subsequently began investing in Berkshire. Other investments: voting shares in Costco Wholesale (retail), Daily Journal (legal newspaper), and Price Legacy (real estate investment). Passionate about education, he donated a new building to the Huntington Library in Pasadena; he is a trustee of Harvard-Westlake School.
— Forbes, October 11, 2004
The Berkshire annual meeting attracts 20,000 attendees, while the Wesco meeting has nearly 500. During the approximately six-hour Berkshire annual meeting and three-hour Wesco meeting, Charlie answers a wide variety of questions without rehearsal or displaying questions on a screen, using only a pencil and white paper. The following example is from the 2004 Wesco meeting:
Q: I want to go fishing for walleye in Eagle Lake, Minnesota, next Friday night. Do you have any tips or bait recommendations?
A: I don’t fish for walleye anymore; after getting older, I only fish for bass. But in my lake, walleye are easier to catch at night.
Charlie and Wheeler's partnership lasted from 1962 to 1975. The first 11 years of Wheeler Munger Company performed exceptionally well, with an average annual compound return of 28.3% (net return of 20%), while the Dow Jones index averaged only 6.7% growth during the same period, without any years of declining returns. However, the partnership suffered heavy losses during the bear markets of 1973 and 1974, with losses of 31.9% and 31.5%, respectively, as the company's main holdings, Blue Chip Stamps and New America Fund, plummeted. The company's performance declined, although in Charlie's words, "those major investments would eventually be sold at prices above market quotes." Nevertheless, the partnership rebounded strongly in 1975, with annual returns soaring by 73.2%, raising the 14-year average compound return to 19.8% (net return of 13.7%), while the Dow Jones index averaged only 5% growth during the same period.
After this difficult experience, Charlie, following Buffett's lead, ultimately decided to stop directly managing funds for investors (Warren closed his own partnership in 1969). They decided to build wealth by controlling a holding company. When Wheeler Munger Company was liquidated, its shareholders received shares of Blue Chip Stamps and Diversified Retail. These shares were later converted into Berkshire Hathaway stock, which closed at $38 at the end of 1975. Today, the price per share exceeds $85,000 (as of the first publication of this book in English in 2005), making Charlie a member of the Forbes 400 Rich List. Although Charlie is indifferent to wealth, he feels annoyed that his name appears on such a list. Despite his healthy public image, Charlie prefers to remain low-key.
The story of Berkshire Hathaway's extraordinary success under the leadership of Warren and Charlie has been told many times elsewhere, so I won't elaborate here. In summary, their performance in selecting undervalued companies and then purchasing large amounts of stock or directly acquiring them is unparalleled. They have acquired a wide variety of businesses, including Johns Manville, Buffalo Evening News, Flight Safety International, NetJets, Shaw Carpet, Benjamin Moore Paints, Government Employees Insurance Company, and Dairy Queen. Additionally, they have purchased large amounts of stock in many publicly traded companies, including The Washington Post, Coca-Cola, Gillette, and American Express. In most cases, their major investments are long-term—indeed, they still own almost every business they have directly acquired.
Benjamin Franklin's career spanned government, business, finance, and industry; whenever he publicly spoke or found an audience, regardless of the size, Charlie always expressed his admiration for him. At the 75th anniversary celebration of See's Candies, Charlie said, "I am a biography enthusiast. I believe that when you try to teach people useful great concepts, it is best to connect those concepts with the lives and personalities of the great people who proposed them. I think if you could befriend Adam Smith, your economics would certainly improve. It sounds fun to befriend 'great deceased people,' but if you truly become friends with those great thinkers in life, I believe you will live a better life and receive a better education. This method is far better than simply providing some basic concepts."
Franklin achieved financial independence with the money he earned, allowing him to focus on social reform. Charlie admires this quality in his spiritual mentor and strives to emulate Franklin. He has long been involved in managing the Samaritan Hospital and Harvard-Westlake School, both located in Los Angeles, serving as chairman of their respective boards. Over the years, he and Nancy have funded Stanford University, the Huntington Library, and the art collection center and botanical garden in San Marino, California. They recently donated a building to the Huntington Library, named the Munger Research Center. Although Charlie describes himself as a conservative Republican, he strongly advocates for family planning. He believes that women should only give birth if they love children. He also funds various initiatives aimed at improving educational environments and quality. As a father of eight children and a grandfather of sixteen grandchildren, Charlie believes his wealth should be used to help future generations inherit a better world.
Charlie as a Partner#
"The best partners can work independently. You can be a commanding partner, a submissive partner, or a partner who collaborates equally. I have been all three."
"People can't believe I suddenly made myself a submissive partner to Warren, but some people are nice, and being his submissive partner is quite good. I don't have an inflated ego about it; I can accept it. There will always be someone better than you in some aspects. You must first be a subordinate before you can become a leader. People should learn to play various roles."
Warren Buffett Q&A
Well, the first question is, when and where did you first meet Charlie Munger? How did you get to know each other?
Well, I first met Charlie in 1959, when the Davises introduced us. Dr. Davis always said I resembled Munger, and I wondered whether that was a compliment or an insult. So when Charlie returned to Omaha in 1959, the Davises arranged for us to have dinner; it was probably in a small private room, just the two of us and a few from the Davis family. At some point that night, when Charlie was laughing uproariously at a joke he told, I knew I had met someone kindred.
What was your first impression of him?#
My first impression was that I had met someone who had a lot in common with me. I often laugh uproariously at my own jokes and enjoy taking control of the conversation. That night, Charlie was a bit more successful than I was in that regard, but I learned a lot from him.
That's great. Now, let's ask a big question: what is the secret to his success?
Well, once a beautiful lady sat next to Charlie and asked what factors contributed to his success, and unfortunately, this lady insisted that Charlie answer in one word. He had prepared a lengthy discourse for several hours, but the lady forced him to summarize in one word, so he said he was "rational." You know, he is inherently a very rational person and applies it to business. In other respects, he is not always rational, but in business, he absolutely is, which has led to his tremendous commercial success.
Do you think there are other moral qualities that contribute to his success?
In fact, I believe those moral qualities truly stem from his deep admiration for Benjamin Franklin. I mean, he is honest and upright, always does more than his share, and never complains about what others do. We have partnered for 40 years, and he has never second-guessed my actions. We have never had a single argument. Our views on many things sometimes differ, but he is a perfect partner.
What do you think are his most unusual characteristics?
If you ask me, everything about Charlie is unusual. I have spent 40 years looking for something ordinary about him, and I still haven't found it. Charlie has composed his own music, and it is music that no one has ever heard. So, I want to say that I can't think of anyone who can be categorized alongside Charlie. He is one of a kind.
The last question: what impact do you think Nancy has had on his life?
I must point out that Charlie does not seek anyone to influence him, but nonetheless, Nancy has done a beautiful job. If I were a matchmaker, I wouldn't want Charlie to be my client.
Susan Buffett Q&A
Tell us about the circumstances of Warren and Charlie's first meeting.
On the night they first met, Neil Davis invited them both to a restaurant, and I watched these two people, thinking that Neil brought them together to see these two arrogant people compete with each other because they are both strong-willed, talkative, and extremely intelligent guys. I was surprised to see Warren actually quiet down and let Charlie take the lead. I had never seen that happen before. Warren is always the one who controls the conversation; I have never seen anyone take that role from him, but that night he ceded it to Charlie. That was rare, and I will never forget that night.
Was that situation rare?
Well, Warren's wit is usually much quicker than anyone else's; he is just much smarter and quicker. I mean, he always unconsciously takes control of the conversation. You know, that night Charlie was "in charge." I was really curious. What happened after that is legendary.
I think at that time Warren felt that Charlie was the smartest person he had ever met, and Charlie felt that Warren was the smartest person he had ever met. They both only felt that way about each other, and it has remained so, so I think their mutual respect for each other's intelligence was the starting point. You know, later they discovered that they had many commonalities, such as being honest, etc. They are a match made in heaven.
That is very exciting. When they are together, I can always see the chemistry between them; their enthusiasm is ignited. That really is, really is wonderful. I think Warren is the oddball in their family, and Charlie might be in his family too; they are just so lucky to have met each other.
What impact do you think Nancy has had on Charlie's life?
I think every aspect of Charlie's life has improved because of Nancy, and that is evident to everyone. She does things with such grace, humor, and dignity. Like everyone else who knows this remarkable woman, I like her—I respect her, I adore her; she is a very important figure. Charlie has had many lucky breaks in his life, and I think the luckiest thing for him is meeting Nancy.
Munger, Thors & Olson law firm was founded in 1962 by Munger and six other partners and is one of the top business law firms in the United States today, with offices in Los Angeles and San Francisco. Its litigation and non-litigation lawyers focus on solving the most important problems for clients. Charlie's prestige and those simple maxims have had a profound and lasting impact on the firm, prompting its lawyers to tirelessly commit to understanding and solving clients' problems. This law firm essentially does not employ traditional law firm marketing methods but follows Charlie's advice: "The best way to bring in new clients is to do a good job on the current work." The firm's lawyers work closely with Warren and Charlie to handle various matters for Berkshire Hathaway. Ron Olson was once responsible for a series of negotiations to resolve the Solomon Brothers bond auction issue. Bob Dunham left the firm in 1991 to become Solomon's general counsel (at that time, Buffett was the interim CEO) and served as Solomon's chairman and CEO after Buffett's resignation. In 1998, after Solomon was acquired by what is now Citigroup, Dunham returned to Munger, Thors & Olson. The firm's lawyers continue to handle Berkshire's merger and acquisition business and its relatively few important litigations.
Charlie Munger has spent his career studying the lives of successful people and those who have left regrets or encountered failures. This study helps us understand why he possesses such profound knowledge and why he remains the most important spiritual mentor at Munger, Thors & Olson.
— Ronald Olson
Robert Dunham, partner at Munger, Thors & Olson law firm, chairman of Wesco Financial Corporation
Ronald Olson, partner at Munger, Thors & Olson law firm, director of Berkshire Hathaway
Charlie Munger's investment partnership performance
The performance in Table 5 belongs to a friend of mine, a Harvard Law School graduate and founder of a large law firm. I met him around 1960 when I told him that being a lawyer as a hobby was fine, but he could do better. The partnership he established was completely different from Walter's (Walter Schloss, another super investor mentioned in this text). His investment portfolio concentrated on very few stocks, thus his investment performance was much more volatile, but it was based on the same value investment strategy. The results over the years show that he was willing to accept greater fluctuations in performance, and he happened to be a person with a psychological structure inclined toward concentration, and the performance reflected this. Coincidentally, this performance belongs to Charlie Munger, my partner, who has managed Berkshire Hathaway with me for many years. However, when he operated his partnership, his investment portfolio was almost entirely different from mine and the few mentioned earlier.
(Excerpt from Warren Buffett's article "Graham—The Super Investor of the Doddsville Style")
Warren and Rick talk about "Captain Charlie"
"Warren, why did Charlie build this huge yacht?"
"Well, the whole sailing community has been wondering about that; in fact, we both know the answer. Rick Glenn and I once encountered something in Minnesota when it was a beautiful day, and the lake was as smooth as glass. Charlie sank a boat without any external help. When Rick and I were about to sink for the third time, we shouted at Charlie to get a more stable boat next time. We thought that with the Channel Cat yacht, with a deck area of 3,400 square feet, Charlie finally found a boat he could steer without easily sinking it by his own strength."
Rick Glenn added, "The first time I surfaced from the water, I found myself face to face with Warren. His eyes were as big as saucers. After rescuing him, I realized I had missed a huge opportunity; you should negotiate a fee before saving someone, not after. Who knows, if I had been more clear-headed at that time, I might have been the chairman of Berkshire Hathaway by now. By the way, I call Charlie's yacht 'Munger's Folly.' That was the only completely irrational thing Charlie ever did."
Charlie's conclusion was, "Designing and building that boat was a lot of fun; how could it be irrational?"
Charlie Munger's charitable lessons
Charlie Munger once gave a speech to a group of foundation finance officers titled "Investment Practices of First-Class Charitable Funds." Toward the end of the speech, he said:
... Now there is a harmful trend; more and more morally conscious young talents in America are intoxicated by lucrative asset management and its accompanying modern frictions, while looking down on work that can bring more value to others... The earlier Charlie Munger (referring to himself) provided a terrible career model for these young people because compared to the benefits he gained from capitalism, he did not give back enough to civilization.
I can personally attest that the later Charlie Munger has become an admirable model, giving back much to civilization. Nancy Munger and Charlie Munger consistently and generously donate to many educational and research institutions, but they never boast about it; later, they funded the construction of some important new buildings, which made their philanthropy known to the world. Their first donation was to the science center at Harvard-Westlake School in North Hollywood, where Charlie is a trustee. Later, they built a new building for the Huntington Library, named the Nancy Munger and Charlie Munger Research Center; now they continue to donate to build a new graduate dormitory for Stanford Law School, which will house graduate students from the law school, business school, and other colleges upon completion.
The Huntington is an independent research library located in San Marino, California, established in 1919 by railroad tycoon Henry Huntington. Its primary function is to support advanced research in the humanities and social sciences. The library's strengths lie in its collections of books on British and American history, literature, the history of science, medicine, and technology. The library holds over six million volumes and welcomes approximately 1,800 scholars conducting postdoctoral research each year. Nancy Munger served as a trustee of the library for ten years and is now an honorary trustee. Retired but not idle, she and Charlie hope to gift this institution a substantial donation, as the research library's facilities urgently need expansion, so they decided to contribute.
The building they donated held a naming ceremony in September 2004 and fully opened to scholars in mid-November of the same year. It is a 90,000-square-foot building, adding significant shelving space, a spacious browsing room for rare materials, offices for resident scholars, new conference rooms and photography studios, and a set of offices for library management.
Working with the Mungers, especially collaborating with Charlie to determine the layout and functions of the Munger Research Center, was a wonderful experience. Charlie had many specific ideas about the building's exterior, designing a neoclassical façade that harmonized with the historic buildings of the Huntington Library. However, Charlie left the planning of the building's internal functions to my staff and me. This was a complex process, as our budget could not exceed their donation amount, and we had to consider the existing library buildings, which had been added from 1929 to 1984. During the construction project, I realized that Charlie posed a clever mathematical problem for us to solve, and like everything he gets involved in, he expected reasonable results. We hired the Earl Company from Pasadena, a design-build firm that Charlie recommended to us, and ultimately we ended up with a spacious, functional building that would serve our collections and scholars throughout the 21st century. We not only completed on time but also slightly under budget, but during the building's formation, some of the Mungers' friends and several foundations also donated funds for the necessary renovations and operations. As a result, we received a beautiful, well-furnished, fully functional research center, along with four years of operational funding, giving us time to raise more funds.
The aforementioned speech by Charlie included another important part: "... work that can bring more value to others." The Munger Research Center donated by Nancy Munger and Charlie Munger enables us to successfully provide value for scholars in this century. Creating value from funds is equally important in both philanthropy and investment. This concludes another important lesson from Charlie Munger.
— David Ziedberg
Director of the Huntington Library's Stenton Avery Branch
The best armor for old age is a life well spent before it.
— Charlie Munger
By the Sacramento River, 2005
Memories:
Younger Generations Talk About Munger
Young Charlie Munger said:
About the time I was 15, our family went skiing in Sun Valley; on the last day of the holiday, my dad and I drove out in the snowstorm, and he took a ten-minute detour to fuel up the red Jeep we were driving. At that time, he was racing against time to get our family to the airport, so when I discovered there was still half a tank of gas at the gas station, I was quite surprised. I asked my dad, "Since we have so much gas, why are we stopping?" He taught me, "Charlie, if you borrow someone else's car, don't forget to fill it up before returning it."
When I was a freshman at Stanford, a friend lent me his car. It wasn't because he was particularly close to me, but because a mutual friend forced him to do so. The red Audi Fox had half a tank of gas. So I remembered the Jeep incident, filled it up, and returned the car. He noticed. Since then, we have spent many wonderful times together, and he was my best man when I got married.
After graduating from Stanford, I learned that the house we stayed in during that vacation belonged to Rick Glenn, and the Jeep we drove was Rick's. Rick was my dad's friend, and when he returned to Sun Valley, he wouldn't mind if the Jeep's gas was less than when he left; he might not even notice. But my dad always did everything fairly and thoughtfully. So that day, I not only learned how to make friends but also how to maintain friendships.
Family Values at Munger's Dinner Table
— Wendy Munger said:
Dad often used the family dinner table as a platform to educate his children. His favorite educational tool was moral stories, telling tales of someone facing a moral dilemma and making the right choice; there were also cautionary tales about someone making the wrong choice and ultimately facing a series of inevitable disasters, suffering heavy losses in life and career.
Using cautionary tales was his specialty. He really enjoyed telling those stories with tragic endings. His stories were very extreme and very scary, and after he finished telling them, we usually screamed and laughed at the same time. In terms of depicting various tragic consequences and teaching us what lessons we could learn from them, Dad was unparalleled.
His moral stories were more straightforward. I remember Dad once told a story when we siblings ranged from 5 to 25 years old. In the story, the financial officer of one of his companies made a mistake that cost the company hundreds of thousands of dollars. Upon discovering the error, he immediately reported it to the company's chairman. Dad told us that the chairman said, "This is a terrible mistake; we don't want you to make the same mistake again. But who doesn't make mistakes? We can overlook this. You did the right thing by admitting your mistake. If you try to cover it up or delay confessing, you will leave this company. But now we want you to stay." Whenever I hear about another government official making a mistake and trying to cover it up instead of being honest, I think of this story.
I don't know why I used the words "once upon a time" to describe Dad's lessons at the dinner table. Now, the oldest of his children is nearing 60, still listening to his teachings, and that table is now filled with his grandchildren, and he continues to use his unique storytelling style to keep us on the side of angels. We are very lucky to have him at the head of the table.
William Hal Boswick said:
Charlie has been married to my mother for nearly 50 years, and during this charming and wonderful time, I have given Charlie many opportunities to educate me. Here are two examples.
-
Do the job right the first time.
This story took place when we were still living in Minnesota. I had reached the age where I could drive, and it was my task to pick up the maid in Cass Lake. This task was not just driving; I had to take a boat across Cass Lake, drive to the town on the other side, and then return the same way. My daily morning task also included buying a newspaper in town. Well, one day it was stormy, and the waves on the lake were high. After all the thrills and difficulties, I finally brought the maid home from town, but I forgot to buy the newspaper. Charlie asked me, "Where's the newspaper?" I said I didn't buy it. He paused for a second and said, "Go back and buy the newspaper; don't forget next time!" So I had to brave the storm and return to town to buy the newspaper, with the waves crashing against the small boat, and I told myself I would never let that happen again. -
Take responsibility.
Every summer, Charlie's mother would drive from Omaha to Minnesota. When she was in Minnesota, we could use her car. But there was only one set of keys. One time, I was sailing with some friends, and the car keys fell from my pocket into five feet of muddy water. I went home and confessed. That was in the northern Minnesota wilderness, where there were hardly any locksmiths, and Charlie could not tolerate such foolish behavior. Almost immediately, he proposed a solution: "Go down with your friends to look for the keys; if you don't find them, don't come home." After searching underwater for nearly two hours, with the sun setting, I miraculously saw a glimmer of metal shining among the water plants ahead, and I could finally go home.
There were many such valuable little stories during those years in Minnesota because Charlie was too busy working, and that was the only time we could truly spend with him. During his working hours, he always left before dawn and returned home for dinner, then studied the S&P index, followed by one or two hours of phone calls with Warren.
David Boswick said:
Many years ago, our family lived in a house by the lake in Minnesota, and my father was determined to add a ball machine to the tennis court he had built a few years earlier. He certainly hoped the children could improve their skills, but his intention was more than that. Because my father frequented the court more than anyone else, once the ball machine was set up, he could practice his volleys endlessly. Soon after, he mastered the technique of volleying, a shot that everyone instinctively wants to smash but usually hits into the net or out of bounds. This method of practicing tennis is like hitting short shots in golf; few others are willing to adopt it, yet my father was relentless, giving him a competitive advantage in other aspects of life. I was really afraid to compete against him, especially in doubles, because in doubles, volleys are key to winning. Fortunately, my father and I were opponents on the tennis court rather than in business.
Thinking of my father reminds me of a humorous beer commercial from long ago. In the ad, a stylishly dressed man sits at a table, intently gazing at the beer in his hand, completely ignoring the raging bull preparing to charge a matador in front of him. When the bull crashes into the table, his eyes don't even blink. The voiceover sounds like, "Taste such-and-such beer, enjoy a unique experience."
Take away the beer, replace it with annual reports from publicly traded companies, architectural blueprints, or an academic biography of Keynes, and you would see my father in the same situation: night after night, he would sit in his favorite chair, reading something, oblivious to the children's noise, the television's clamor, and my mother's calls for dinner.
Even when not reading, my father often fell into deep thought while driving Molly and Wendy to Pasadena; if it weren't for my mother loudly reminding him of the correct highway exit, he would have driven to San Bernardino. I don't know what he was thinking, but it certainly wasn't the outcome of a football game or a poorly played round of golf. My father could resist most external distractions when he was thinking; if you tried to get his attention at that moment, you would find him both amusing and frustrating. But it is this ability that has made him so successful.
Molly Munger said:
I started college in 1966, and I was very fortunate to be deeply influenced by my dad at that time. In that angry and radical era, I would wear an Oxford outfit, buy the Wall Street Journal or Fortune magazine at the newsstand outside the school, and then tuck it under my arm as I strode off to my economics and business classes. The students at that time were either occupying the dean's office or on their way to jail. Meanwhile, I was studying how to read financial statements in the basement of Lamont Library.
Dad taught us to approach things with skepticism, even to go against the grain, which was especially helpful in facing the chaotic situation of the late 1960s. For many years, in our home on June Street, he often sat in his study, telling us interesting stories about people who either blindly followed the crowd or were overly self-assured. "Crazy," "bewildered," "arrogant," "complacent"—we knew these were adjectives he believed we should avoid.
In Minnesota, he found a way to instill the same message in us. He had the former Larson Shipyard make us a "water plane"; it was a thick wooden board that he towed behind his boat, allowing us to stand on it. He would suddenly turn, watching to see if we could still stand; the only way to avoid falling into the water and embarrassing ourselves was to constantly adjust our balance to counteract the tilt. From that moment on, if any thought or action seemed to be slipping out of my control, I would feel a deep fear.
When I went to college, Dad still had to support seven other children. At that time, he only had a small company on a shabby Spring Street, which was small and dirty, specializing in producing gasoline additives. But he thought it was a chaotic time. He provided me with a much wealthier allowance than a father could afford, allowing me to wear professionally pressed shirts and feel well-dressed. He continued to help me maintain my balance from 3,000 miles away.
I could go on, but I don't need to say much more; I just want to point out that our father always fulfilled his obligations well, whether as a father or in other roles. I have always been very grateful, and I still am.
Emily Ogden said:
"Your hands look a lot like your father's." My husband suddenly said this while we were sharing a glass of wine. I looked at him, a bit shocked, not because he compared my hand to my father's, but because he and I were on the same wavelength. I had been thinking about this point while conceiving an article about my father.
I had long noticed that my eldest son's hands resembled his grandfather's, with slightly square fingers and nail beds that were not round but more like teacups. But the most similar aspect is how we place our hands. My father, I, and my son all place our hands behind our backs while walking and all hold our right wrists with our left hands in the same way.
"What exactly about my hands looks like my father's?" I asked. "It's the U-shape formed by your index and thumb," he said, demonstrating for me, "as if you are holding something."
My father stretched out his hands above me. His fingers curled up, and the two thumbs faced each other like bicycle handlebars. Young me stretched out my arms, grabbed his two thumbs, and he lifted me off the ground. I hung happily until my strength ran out. When a child grows up and is no longer suitable for playing the "thumb" game, another child can still play, and now his grandchildren are still playing.
Sometimes we would let him put down the Wall Street Journal and play "sandwich" with us. He would sit in the green armchair in his study, and we would stack ourselves like bacon, lettuce, and tomato in a BLT sandwich, and then he would reach out and tightly hug us all.
The egg in my father's hand was intact. We won the father-daughter egg toss contest and received my favorite prize: a marble base decorated with buttercups, topped with a life-sized replica of a golden egg. This trophy sits on my desk, reminding me of that sunny day when Dad was so careful and gentle not to let the egg break in our hands.
My father's hands could sense the tension of different fishing lines. The fishing line was tied to a grass-green hook or an old-fashioned regular hook. His hands would reach to his mouth, using his teeth to tighten the knot and then bite off the excess line. His hands would reach into the iron bucket of bait, wetly grasping black leeches or the famous Leroy bait, the kind that "guarantees a catch." His hands held the yellow-green package of Singler snacks, the spicy pickles that would bring laughter with just one bite, and peanut butter sandwiches.
My father's hands, like the rest of his body, would rise early and then appear at the edge of the financial section of the newspaper. When we still lived in Minnesota, he would crumple the newspaper into several fluffy paper balls, toss them into the wooden stove invented by Benjamin Franklin, strike a match to ignite them, and press the almond-shaped bellows. Once the fire was lit, he would use an old wooden spatula with peeling red paint to bake blueberry buckwheat pancakes on the stove.
But if you played a guessing game with the riddle "Charlie Munger's hands," most people would probably guess "books." No matter where he is, his hands are always holding an open book, usually a biography of Benjamin Franklin or the latest work on genetics. Others might guess "blueprints" because he has designed many buildings.
When I think of my father's hands, I can also see them raised on stage in front of thousands in Omaha. His fingers grasping a Diet Coke, holding peanut brittle or chocolate-covered vanilla ice cream, or slipping out of sight to rummage through a See's candy box for chocolate-covered almonds. His hands crossed over his chest, shaking his head, saying, "I have nothing to add." His hands would rise rhythmically with a long, philosophical answer, prompting applause from all the hands in the auditorium.
My father's hands made various gestures with every funny joke and every educational story, shaping me like a sculptor's hands. My hands resemble my father's, which makes me both happy and grateful.
Barry Munger said:
A few years ago, I read Calvin Trillin's "Messages from My Father." It is a memoir about his father, Abbie Trillin. Abbie was born in Ukraine and grew up in Missouri, spending most of his career managing several neighboring grocery stores in Kansas City. Abbie Trillin believed that frugality was a virtue, paying bills on the day they arrived, and waking up at 4 a.m. six days a week to select fresh fruits and vegetables for his stores. He spoke little, yet was naturally cheerful and humorous, never putting on airs when talking to his children. He was a good card player. He liked to make sarcastic remarks but always optimistically believed that with good performance and character, people could lead good lives.
Although my father is not known for selecting fruits and vegetables, he shares many similarities with Abbie, but that is not the only reason I enjoy this light, lively, and humorous little book. When reading this book, I always think of my father, even though his life experiences are vastly different from Abbie Trillin's; the only commonality is that my father once worked part-time at a Midwestern grocery store—the Buffett family store in Omaha.
Like my father, Abbie Trillin also had an old-fashioned style that did not match his personality, partly because he lived in the Midwest. He never considered long drives or fishing as "progressive" opportunities. He also disliked making phone calls. His son eventually marveled, "I heard some fathers have sincere conversations with their sons in their studies, on boats, or in cars; my father never did that, but he still had a tremendous impact on me." The author chose the title "Messages from My Father" because he felt his father must have conveyed his expectations through some kind of encrypted message. "It's possible my father's code was so subtle that I didn't even notice it existed," he wrote.
About a week later, the book was returned, and the address label was affixed by his secretary. There was no note inside, so I didn't know if he had read it or rejected it. The book was pristine, so I thought my intention was like paper scattered on the presidential mountain, not understood. However, not much escapes my father's attention. It turned out he simply told his secretary to send a copy to everyone in the family.
Philip Munger said:
The most touching memory I have is about my father taking me to Brooks Brothers and Macy's to buy clothes. Most people already know that my father is not a fashionable person. He once said that his behavior and views were rebellious enough, so he should dress conventionally. He said that although he sometimes had a bad temper, his adherence to conventional social customs and his sense of humor allowed him to get along with others.
I vividly remember my father taking me to Brooks Brothers to buy my first suit. At that time, the store was still operating in a beautiful wooden building in downtown Los Angeles. I must have been 11 or 12 years old. I can still see the shiny brass doors of the store's elevator opening as we selected from the racks. My father chose a dark gray pinstripe suit. At 16, we bought another suit, this time a three-piece; I wore it throughout my time on the debate team. During the tour, it shielded me from the cold winds blowing from the Northwest lakes. We also bought a pair of casual leather shoes for my summer internship at the Daily Journal (a coming-of-age gift arranged by my father for us siblings), and I can still wear those shoes today. This brings up another topic. We once bought a brown tweed coat at Macy's, and my father said, "This fabric is very durable." He admired both stores for their long histories and their fair prices. In my father's view, durability was always the top priority, followed by solemnity and orthodoxy. Like Franklin, once a habit is formed, whether it is a dressing habit or another habit, he does not want to change it.
I still buy clothes at Brooks Brothers, partly because every Christmas, my father gives each child a shopping card, which coincides with the winter clearance sale. But I always go more than just once. One year, I used the shopping card he gave me to buy a pair of pleated trousers. My father glanced at me and said, "Do you want to dress like a jazz drummer?" In New York, Brooks Brothers still operates in that beautiful old building. Every time I go, I think of my father; I really love that place. In the winter of 1988, I went to Oxford for school, and my father gave me an old Brooks coat of his, which was dark green with a zippered lining; I think he might have bought it in the 1940s. Every night when I returned home from the Bodleian Library, it helped shield me from the damp, biting cold of England. After returning to the United States, I realized I had left that coat on the bus. This loss made me very sad. To this day, I still think how nice it would be if that coat were still around.
In August 2001, the Mungers celebrated their 45th wedding anniversary with family in Kent County, England.
Friends say: "Charlie is smart, curious, focused... and a bit absent-minded."
Roy Thors, friend and business partner since 1946
Charlie has a desire to thoroughly understand things. He likes to dig deep into matters, regardless of whether they are closely related to him. Anything that catches his attention, he wants to know more about, to understand what is really going on.
(Note: Roy Thors passed away on February 1, 2008)
Glenn Mitchell, friend since 1957
He knows how to focus intently and study a problem without being disturbed by the outside world. Even if someone walks into the room, pats him on the back, or brings him another cup of coffee or something else, Charlie would not notice their presence because all his extraordinary intelligence is engaged.
Bob Bird, President of Wesco Financial Corporation, friend and partner since 1969
When Charlie is deep in thought, he often becomes oblivious to everything around him, even ignoring social etiquette. I remember when we were negotiating with CenFed Financial Group to take over our savings and loan business, Charlie and I went to their office to meet their president, Tad Rowley. Our discussions went very well—Charlie could charm anyone when he put his mind to it—and both parties were very satisfied with the outcome of the negotiations.
Tad escorted us to the elevator. As we reached it, the doors opened, and Charlie walked straight in. He did not say goodbye, shake hands, or anything. Leaving Tad and me standing outside, smiling, speechless.
Warren Buffett, friend and partner since 1959
I once attended a board meeting at Solomon Brothers with Charlie in New York City. We exited the company's building, standing on the sidewalk discussing the results of the earlier talks. I thought we were conversing, and suddenly I realized I had been talking to myself for a while. I looked around for Charlie, only to see him climbing into the back seat of a taxi, heading straight to the airport. No goodbye, nothing.
People think that Charlie's inability to see certain things is due to his eyes (many years ago, Charlie had cataract surgery, during which he lost vision in one eye). But it is not his eyes; it is his mind! Charlie once parked at a traffic light while discussing a complex issue, and the lights changed three times, with many cars honking behind us, while Charlie kept talking.
Dick Esben, friend and partner since 1959
Speaking of curiosity and focus, if Charlie is interested in something, he will truly delve into it. I remember he gave three speeches at our firm about the "great deceased" he encountered in his extensive reading: Isaac Newton, Albert Einstein, and Simon Marks. I was particularly impressed by his insightful comment during the speech about Simon Marks (the second head of Marks & Spencer): "Find out what you do best, and then persistently and tirelessly do it well." Of course, this is also Charlie's consistent way of life.
Howard Buffett, son of Warren Buffett, friend since 1959
Over the years, Charlie has often visited our home on the Southern California coast. I remember when "talking" with him, it was really just him doing all the talking. I felt I should carry a dictionary to look up the words I didn't know in what he said. I remember I rarely spoke because I was afraid that asking the wrong question would make me look foolish. He is so smart, just like my father, an exceptionally intelligent person.
Once, someone quoted me (of course, out of context) saying my father was the second smartest person I know, and the smartest was Charlie. For the sake of family harmony, I won't comment on such reports.
Munger's Impromptu Talks#
How to Achieve Happiness and Success
If your only success in life is getting rich by buying stocks, then that is a failed life. Life is not just about shrewdly accumulating wealth.
Most successes in life and business come from knowing what to avoid: premature death, bad marriages, and so on.
Avoid contracting AIDS, racing trains at intersections, and using drugs. Cultivate good mental habits.
Avoid evil people, especially those seductive members of the opposite sex.
If you are unpopular because of your individuality... then let them be.
Be content with what you already have.
Here is a truth that your investment advisor might oppose: if you are already quite wealthy, and others are growing their wealth faster than you, say, by making money on high-risk stocks, so what?! There will always be someone whose wealth grows faster than yours. That is not sad.
Look at Stanley Druckenmiller (who managed George Soros's fund and suffered heavy losses from speculating on tech stocks and biotech stocks): he always had to be the best and could not tolerate others beating him in those investment areas.
Ulysses and the Sirens
[English] Herbert James Draper (1863-1920), oil painting, private collection.
Madwoman
(Madwoman, also known as Over Jealous) Théodore Chassériau (1791-1824), oil painting, Musée des Beaux-Arts de Lyon, France.
Soros could not tolerate others making money in the