Charlie Munger

Charlie Munger
Born	Charles Thomas Munger 1 1, 1924
Birthplace	Omaha, Nebraska, U.S.
Died	Template:Death date and age Santa Barbara, California, U.S.
Nationality	American
Occupation	Investor, businessman, attorney, philanthropist
Known for	Vice Chairman of Berkshire Hathaway
Education	Harvard Law School (JD)
Spouse(s)	Template:Plainlist
Awards	Berkshire Hathaway Vice Chairman (1978–2023)
Website	[[berkshirehathaway.com berkshirehathaway.com] Official site]

Charles Thomas Munger (January 1, 1924 – November 28, 2023) was an American businessman, investor, attorney, and philanthropist who served as vice chairman of Berkshire Hathaway, the multinational conglomerate controlled by Warren Buffett, from 1978 until his death in 2023. Over the course of nearly five decades of partnership, Buffett credited Munger as the "architect" of Berkshire Hathaway's modern business philosophy, describing him as his closest partner and right-hand man. Beyond his role at Berkshire, Munger was a founding partner of the prominent California law firm Munger, Tolles & Olson; chairman of Wesco Financial Corporation from 1984 through 2011; chairman of the Daily Journal Corporation, based in Los Angeles; and a director of Costco Wholesale Corporation. Known for his acerbic wit, intellectual breadth, and advocacy of "mental models" drawn from multiple disciplines, Munger became one of the most quoted figures in the investment world. His approach to investing—centered on patience, the avoidance of foolishness, and the long-term ownership of high-quality businesses—influenced generations of value investors around the globe. A committed philanthropist, Munger donated hundreds of millions of dollars to educational institutions, including the University of Michigan, Stanford University, the California Institute of Technology, and the University of California, Santa Barbara.

Early Life

Charles Thomas Munger was born on January 1, 1924, in Omaha, Nebraska. He grew up during the Great Depression, an experience that left a lasting imprint on his views about thrift, self-reliance, and the importance of financial security. Omaha was also the hometown of Warren Buffett, and though Munger was six years Buffett's senior, the two grew up in the same community; Munger worked as a boy at Buffett & Son, a grocery store owned by Warren Buffett's grandfather, though the two did not meet until years later.

Munger's intellectual curiosity manifested early. He was a voracious reader from childhood, a habit he maintained throughout his life. In later years, Munger frequently emphasized the central role that reading played in his success. As he stated in one widely cited remark: "In my whole life, I have known no wise people who didn't read all the time — none, zero." This devotion to autodidactic learning across disciplines—including psychology, physics, biology, history, and economics—later formed the foundation of his investment philosophy.

During World War II, Munger left college to serve in the United States Army Air Corps, where he worked as a meteorologist. He was stationed in Alaska during part of his military service. His wartime experience, combined with the hardships of the Depression, shaped a pragmatic worldview that would characterize his public commentary for decades.

Education

Munger initially attended the University of Michigan, where he studied mathematics. He did not complete his undergraduate degree before enlisting in the military during World War II. After the war, he was admitted to Harvard Law School without a bachelor's degree, an uncommon but not unprecedented path at the time. He earned his Juris Doctor (JD) from Harvard Law School, graduating magna cum laude.

Despite not having finished his undergraduate studies at the University of Michigan, Munger maintained a lifelong connection to the institution and became one of its most generous benefactors. He also developed deep ties to Stanford University, where he later served as a trustee.

Career

Law

After graduating from Harvard Law School, Munger moved to Southern California and began practicing law. In 1962, he co-founded the law firm Munger, Tolles & Olson, based in Los Angeles, which grew into one of the most respected corporate law firms in the United States. Though Munger eventually shifted his primary focus to investing and business, the firm continued to bear his name and maintained a reputation for high-caliber legal work. His legal training shaped his analytical approach to business problems, and he frequently drew on legal reasoning in his investment analysis.

Investment Career and Partnership with Warren Buffett

Munger's transition from law to full-time investing began in the 1960s and 1970s. He managed an investment partnership during this period, achieving strong returns that drew the attention of the broader value investing community. Warren Buffett, in his celebrated essay "The Superinvestors of Graham-and-Doddsville," identified Munger's investment partnership as one of several practitioners of the Benjamin Graham-influenced value investing school who had achieved exceptional long-term results.

Although Munger and Buffett were both from Omaha and had mutual acquaintances, they did not meet until 1959. The two quickly formed a deep intellectual bond, discovering shared interests in business analysis, probability, and the psychological underpinnings of human decision-making. Their partnership—initially informal—became formal when Munger was named vice chairman of Berkshire Hathaway in 1978. He held that position for the remainder of his life, a tenure spanning 45 years.

Munger's influence on Berkshire Hathaway's investment philosophy was profound. While Buffett had initially adhered closely to Benjamin Graham's emphasis on buying stocks trading at deep discounts to their net asset value—the so-called "cigar butt" approach—Munger persuaded him to shift toward acquiring high-quality businesses with durable competitive advantages, even if they traded at higher prices. As Buffett wrote in Berkshire Hathaway's 2014 annual letter, Munger was the "architect" of the conglomerate's modern approach, which emphasized owning wonderful businesses at fair prices rather than fair businesses at wonderful prices.

This philosophical pivot had enormous consequences for Berkshire Hathaway's growth. Under the Buffett-Munger partnership, the conglomerate evolved from a struggling textile manufacturer into a sprawling holding company encompassing insurance, railroads, energy, retail, and manufacturing businesses, as well as a massive portfolio of publicly traded equities. By the time of Munger's death in 2023, Berkshire Hathaway was one of the most valuable companies in the world.

Munger was known for his emphasis on rationality, multidisciplinary thinking, and the avoidance of cognitive biases. He frequently lectured on what he called "the psychology of human misjudgment," cataloging the mental errors—including envy, incentive-caused bias, social proof, and commitment and consistency tendencies—that he believed led to poor decisions in both investing and life. His talks on these subjects, delivered at institutions including Harvard and the California Institute of Technology, were widely circulated and studied.

Munger also advocated for what he termed "mental models"—frameworks drawn from multiple academic disciplines that could be applied to business and investment problems. He argued that by building a "latticework" of models from fields including economics, psychology, physics, engineering, and biology, an investor could develop a more complete and reliable understanding of complex situations than someone relying on any single discipline. This approach to multidisciplinary thinking became one of his most enduring intellectual contributions.

Wesco Financial Corporation

In addition to his role at Berkshire Hathaway, Munger served as chairman of Wesco Financial Corporation, a subsidiary of Berkshire, from 1984 through 2011. Wesco's annual meetings in Pasadena, California, became a pilgrimage site for value investors, who gathered to hear Munger hold forth on topics ranging from investment strategy to human psychology, political economy, and moral philosophy. Notes from these meetings were widely circulated within the investing community. Wesco was eventually fully absorbed into Berkshire Hathaway in 2011.

Daily Journal Corporation and Costco

Munger served as chairman of the Daily Journal Corporation, a Los Angeles-based publisher of legal newspapers and provider of information technology for courts and other government agencies. Under Munger's oversight, the Daily Journal's investment portfolio—managed with a concentrated, long-term approach—attracted considerable attention from investors who sought to understand his stock-picking philosophy.

He also served on the board of directors of Costco Wholesale Corporation, the membership warehouse retailer. Munger was a strong advocate of Costco's business model, admiring the company's focus on providing exceptional value to customers, maintaining low overhead costs, and treating employees well. He remained on the Costco board for many years and frequently cited the company as an example of the kind of high-quality, competitively advantaged business he favored.

Investment in Li Lu and Himalaya Capital

Munger developed a close relationship with Li Lu, a Chinese-American investor and founder of Himalaya Capital Management. Impressed by Li Lu's ability and character, Munger entrusted him with managing a significant portion of his family's fortune. The results were substantial; as one account noted, Munger's investment with Li Lu grew to approximately $400 million, with Munger himself remarking that they had made "unholy good returns." Li Lu's approach—concentrated ownership of high-quality businesses with a long time horizon—mirrored Munger's own investment philosophy.

Investment Philosophy

Munger's investment philosophy can be distilled into several core principles that he articulated consistently over decades. He advocated patience, concentration, and the discipline to act decisively when rare opportunities presented themselves, while remaining inactive during less favorable periods. One of his frequently quoted statements encapsulated this approach: "The big money is not in the buying and selling, but in the waiting."

Munger also stressed the importance of compounding and the critical early stages of wealth accumulation. He described the first $100,000 as the most difficult to save, but emphasized that once that threshold was reached, compound growth could accelerate wealth creation dramatically.

He counseled investors to prepare psychologically for significant market declines, arguing that those who could not tolerate a 50% drop in the value of their holdings were not suited to equity investing. Munger and Buffett both maintained that volatility was the price of long-term returns, and that selling during downturns was the primary way investors destroyed their own wealth.

Personal Life

Munger married Nancy Jean Huggins in 1945. The couple had three children before divorcing in 1953. Their son Teddy was diagnosed with leukemia and died at the age of nine, an event Munger described as the most painful experience of his life.

In 1956, Munger married Nancy Barry Borthwick. They remained together until her death in 2010. The couple had several children together, and Munger also had stepchildren from the marriage.

Munger lived for much of his adult life in Southern California. He was known for his austere personal habits, his devotion to reading, and his sardonic sense of humor. At the Berkshire Hathaway annual meetings in Omaha—where he sat alongside Buffett and answered questions from shareholders for hours—Munger typically offered brief, pointed responses that often drew laughter and applause. His recurring phrase, "I have nothing to add," became a signature line.

Munger was also an amateur architect and took an active interest in the design of buildings funded by his philanthropic donations.

Charlie Munger died on November 28, 2023, in Santa Barbara, California, at the age of 99, just 33 days before what would have been his 100th birthday.

Philanthropy

Munger was a major philanthropist whose donations totaled hundreds of millions of dollars, with a particular focus on educational institutions.

He donated $20 million to the University of Michigan Law School for the renovation of the Lawyers Club, a historic residential facility for law students. The gift was among the largest in the law school's history. In 2013, Munger made a $110 million donation to the University of Michigan, which at the time was the largest single gift in the university's history. The donation funded a graduate student residence hall.

Munger was a trustee of Stanford University and made significant gifts to the institution. He also donated to Stanford for various academic and residential facilities.

At the California Institute of Technology (Caltech), Munger was both a donor and a lecturer. He delivered the DuBridge Distinguished Lecture at Caltech, speaking on the intersection of psychology and economics. He also made financial contributions to the institution.

In 2016, Munger donated $200 million to the University of California, Santa Barbara (UCSB) for the construction of a new student dormitory. The gift was one of the largest single donations to a public university in the United States at the time. The proposed building's design, which Munger had a personal hand in creating, generated controversy due to its unconventional layout—featuring many windowless bedrooms—but the scale of the gift was recognized as transformative for the campus.

Munger also donated $800,000 in stock to the Harvard-Westlake School, a private school in Los Angeles.

Legacy

Charlie Munger's influence on the practice of investing and on business thinking more broadly has been substantial. His advocacy of multidisciplinary thinking, his cataloging of psychological biases affecting decision-making, and his insistence on intellectual honesty became touchstones for investors, business executives, and students of rational decision-making.

Munger's intellectual contributions were disseminated through several channels. His speeches, particularly "The Psychology of Human Misjudgment," were widely read and discussed. Peter Bevelin, author of Seeking Wisdom: From Darwin to Munger, drew extensively on Munger's ideas about mental models and cognitive biases in his analysis of human decision-making.

The Berkshire Hathaway annual meetings, often referred to as "Woodstock for Capitalists," provided Munger with a global platform. His remarks at these gatherings—terse, often contrarian, and laced with references to history, science, and literature—were transcribed, analyzed, and shared by a devoted following. Books compiling his speeches and aphorisms, including Poor Charlie's Almanack, became popular reference works among investors.

Munger's emphasis on the importance of reading, lifelong learning, and the cultivation of rational habits of mind resonated well beyond the investing community. His concept of building a "latticework of mental models" influenced educators, entrepreneurs, and policymakers who sought frameworks for making better decisions under uncertainty.

His philanthropic legacy, concentrated in educational institutions, reflected his belief that access to high-quality education was among the most powerful forces for individual and societal improvement. The buildings, endowments, and programs he funded at the University of Michigan, Stanford, Caltech, UCSB, and other institutions continued to serve students and scholars after his death.

At the time of his passing at age 99, Munger was recognized as one of the most influential investors and business thinkers of the twentieth and twenty-first centuries. His partnership with Warren Buffett, which spanned more than six decades, produced one of the most successful records in the history of American business.