Charlie Munger, finance legend, also known by the nickname the abominable Mr. No (for his ferocity in rejecting possible investments) died last Tuesday at the age of 99. He was considered the right hand (or the left eye, which by the way was made of glass) or the alter ego of Warren Buffett, the soul of Berkshire Hathaway, the most successful investment vehicle in the world, with stakes in Apple, Coca Cola, Walt Disney, Gillette, Visa...
Munger and Buffett's relationship was formalized in 1975 and both were building an empire based on the concept of value investing. In a word, buy shares of businesses that are understood, that guarantee solid cash flows and balance sheets and offer long-term value.
Both, sitting on plastic chairs every year at their meeting in Omaha (USA), were handing out investment advice as the most respected gurus on Wall Street. Today the company is worth more than $780 billion. “Charlie has given me the best gift that one person can give another. He has made me a better person than he would have been otherwise. We never had an argument. “I have lived a better life because of Charlie,” Buffett said.
He didn't have an easy life, but he always recovered. He was a soldier in World War II and at just 29 years old he got divorced and lost a large part of his assets in the separation. At 31 years old, his son died of leukemia at the age of eight.
Charlie Munger had boundless curiosity and was passionate about reading. Blind in one eye since 1980, he had been going blind in the other in recent years and learned to read Braille to continue satisfying his desire for knowledge.
A Barcelona investor who attended Munger's meetings in Omaha defines him like this: “He was an educator, a multidisciplinary thinker, a connoisseur of the human condition, an integrated person with his own thinking, often critical of short-term biases on the part of of the industry on Wall Street.” Munger was key in Berkshire's shift towards a vision where qualitative aspects began to outweigh purely financial ones.
The collection of famous phrases and quotes from Munger is extensive. The best way to remember is perhaps to list a few. “Personally, I am skeptical of the hype that has been given to artificial intelligence. I think old-fashioned intelligence works pretty well.” “I have a clear approach to estate planning. Just hold the damn stocks.” “People calculate too much and think too little.” “You don't make money by buying and selling, but by waiting.” “Better to invest in companies that even a stupid person can run.” “I have 99 problems and they all come from overly optimistic estimates.” “I consider the cryptocurrency business to be antisocial, stupid and immoral.” “Inflation may be how democracies die.” “It takes character to sit back with money and do nothing – I didn’t get to where I am by pursuing mediocre opportunities.” And perhaps the last phrase that best summarizes his philosophy: “The fundamental algorithm of life is: repeat what works.” It certainly worked for him.
