Charlie Munger

Charlie Munger (January 1, 1924––November1924–November 28, 2023) was an American business magnate, lawyer, investor, and philanthropist. At the time of his death, Munger was serving as Berkshire Hathaway's vice chairman, a role which he had held since 1978. Known as Warren Buffett's "right-hand man," Munger was instrumental in Berkshire's growth into a large and successful diversified holding company. Munger also served on the boards of Daily Journal Corporation and Costco until his death in 2023. He was chairman of Wesco Financial Corporation from 1984 to 2011. As of April 2023, Munger's net worth was $2.2 billion. He was ranked #1,368 on Forbes's Billionaires (2023) list.

Munger began attending the University of Michigan in 1941, where he studied math. In 1943, he joined the US Army Air Corps as a second lieutenant. After earning a high score on an army intelligence test, Munger was sent to study meteorology at the California Institute of Technology. He then applied to Harvard Law School, but was rejected at first because he didn't have an undergraduate degree. Roscoe Pound, the school's former dean, was a friend of the Munger family and intervened on his behalf, allowing Munger to gain admission. He graduated magna cum laude in 1948 with a doctor of jurisprudence degree, despite never earning an undergraduate degree.

After graduating from Harvard Law School, Munger moved to California with his wife, Nancy Huggins, and began practicing real estate law. He joined the law firm Musick Peeler & Garrett, which represented wealthy local entrepreneurs. He also partnered with Franklin Otis Booth to develop real estate. They handled multiple projects at once, netting Munger several million dollars within a few years. In 1959, Munger met Warren Buffett at a dinner party held by a mutual acquaintance. The two immediately hit it off and went out later that same night by themselves. In a recall of the night, Buffett stated, “We went to dinner, and in five minutes, Charlie was rolling on the floor laughing at his own jokes—and I do the same thing. We knew we were sort of made for each other." In 1962, Munger founded the law firm Munger, Tolles & Olson, which he left in 1965 in order to focus on investing full timefull-time due to Buffett's advice.

In 1962, Munger founded a hedge fund called Wheeler, Munger & Co., which he ran until 1975. During those years, he generated compound annual returns of 19.8 percent, compared to the 5 percent annual appreciation rate for the Dow during that same time. Munger then became vice chairman of Berkshire Hathaway in 1978, serving as Warren Buffett's right-hand man and investment partner. Munger took a calculated and objective approach to investments throughout his life. He analyzed companies without emotion or hope, choosing ones that appeared timeless yet undervalued. He once stated, “Forget what you know about buying fair businesses at wonderful prices; instead, buy wonderful businesses at fair prices.” Buffett said that Munger kept him from allowing Berkshire to pursue the "foolish" approach of cigar butt investing, which is the practice of investing in a dying business for cheap to make a small profit: “Charlie understood this early; I was a slow learner.” Munger purchased stocks with the intention of holding them long-term in order to generate compound interest for many years. This practice allowed for a greater return and a lower tax burden upon the eventual sale of the stocks.

Buffett said that Munger kept him from allowing Berkshire to pursue the "foolish" approach of cigar butt investing, which is the practice of investing in a dying business for cheap to make a small profit: “Charlie understood this early; I was a slow learner.” Munger purchased stocks with the intention of holding them long-term in order to generate compound interest for many years. This practice allowed for a greater return and a lower tax burden upon the eventual sale of the stocks.

Munger donated hundreds of millions of dollars to educational institutions throughout his lifetime, including to the University of Michigan, Stanford University, Harvard Law School, University of California Santa Barbara (UCSB), Polytechnic School, and Harvard-Westlake. His donations were often made with the stipulation that the funded school accept his architectural designs for buildings, even though he was not a trained architect. Munger received backlash for his design of a largely windowless dorm for UCSB, which he described as "cheerful." He also made donations to Good Samaritan Hospital, Huntington Library, and Planned Parenthood.

Munger married his first wife, Nancy Huggins, in 1945. Huggins was Munger's sister's college roommate. The couple had three children together: Wendy, Molly, and Teddy, who died of leukemia at age nine. Huggins and Munger divorced in 1953, and a few years later, Munger married Nancy Barry. Barry and Munger had four children of their own: Charles Jr., Emilie, Barry, and Philip. Munger was also a stepfather of Barry's two children, William Harold Borthwick and David Borthwick. They remained married until Nancy's death on February 6, 2010.

On November 28, 2023, Munger died at a California hospital. He was 99ninety-nine. Warren Buffett stated, "Berkshire Hathaway could not have been built to its present status without Charlie's inspiration, wisdom, and participation." Berkshire has not publicly discussed a replacement for Munger.

In the chronicles of American financial history, Charlie Munger will be seen as the proverbial enigma wrapped in a paradox—he is both a mystery and a contradiction at the same time."––David Clark, The Tao of Charlie Munger: A Compilation of Quotes from Berkshire Hathaway’s Vice Chairman on Life, Business, and the Pursuit of Wealth.

Charlie Thomas Munger is an American business magnate, lawyer, investor, and philanthropist born in Omaha, Nebraska on January 1, 1924. He is the vice chairman of Berkshire Hathaway, chairman of the Daily Journal Corporation, chairman of Wesco Financial Corporation, Chairman of Good Samaritan Hospital, and the director of Costco Wholesale Corporation.

Munger graduated from with a J.D. from Harvard University in 1948, and afterwards founded his own law firm in Los Angeles, California called Munger, Tolles & Olson. He left Munger, Tolles & Olson in 1965 to focus full time on investing after being convinced by Warren Buffet to join him at Berkshire Hathaway. Charlie Munger is often spoken about by news outlets as "Warren Buffet's right-hand man". As of 2019 Charlie Munger has an estimated net worth of $1.6 billion, is living in Los Angeles, California, and identifies as a Republican.

Charlie also has a passion for architecture. He designed his own house in Los Angeles, and in his 30's designed and built five apartment projects near Los Angeles. He also designed dorm complexes at Stanford University and the University of Michigan.

David Clark in his book, The Tao of Charlie Munger: A Compilation of Quotes from Berkshire Hathaway's Vice Chairman on Life, Business, and the Pursuit of Wealth, describes how he thinks society will see Charlie Munger in the future by writing "Charlie Munger will be seen as the proverbial enigma wrapped in a paradox—he is both a mystery and a contradiction at the same time". Bill Gates spoke gave his opinion of Munger by saying "He is truly the broadest thinker I have ever encountered", and Warren Buffet describes Munger in the following manner "He comes equipped with rationality... I would say that to try and typecast Charlie in terms of any other human that I can think of, no one would fit. He's got his own mold".

Charlie Munger (January 1, 1924––November 28, 2023) was an American business magnate, lawyer, investor, and philanthropist. At the time of his death, Munger was serving as Berkshire Hathaway's vice chairman, a role which he had held since 1978. Known as Warren Buffett's "right-hand man," Munger was instrumental in Berkshire's growth into a large and successful diversified holding company. Munger also served on the boards of Daily Journal Corporation and Costco until his death in 2023. He was chairman of Wesco Financial Corporation from 1984 to 2011. As of April 2023, Munger's net worth was $2.2 billion. He was ranked #1,368 on Forbes's Billionaires (2023) list.

Munger was born as Charles Thomas Munger in Omaha, Nebraska on January 1, 1924 to parents Alfred and Florence "Toody" Munger. His grandfather was Thomas Charles Munger, a judge of the US District Court for the District of Nebraska. As a teenager, Munger worked at a grocery store owned by the grandfather of Warren Buffett, his future business partner. However, Munger and Buffett didn't meet each other until nearly two decades later.

Charlie Munger enrolled in the University of Michigan in 1941 to study mathematics when he was 19 years old. During his time at the University of Michigan he joined the Sigma Phi Society fraternity. He dropped out in 1943 to join the U.S. Army Air Corps a few days after his 19^th birthday. During his time in the army Charlie Munger would become a meteorologist, earn the rank of second lieutenant, and marry Nancy Huggins.

Charlie Munger studied physics and meteorology at Caltech Pasadena to become a meteorologist for the American military during World War II after getting a high score ion the Army General Classification Test. During his time in college and the military Charlie Munger learned how to play cards, and claims to have learned important lessons about business and life from playing the game.

What you have to learn is to fold early when the odds are against you, or if you have a big edge, back it heavily because you don't get a big edge often. Opportunity comes, but it doesn't come often, so seize it when it does come.

After taking several university level courses at a few different American Universities with financial support from the Servicemen's Readjustment Act of 1994. Munger was initially rejected from attending Harvard because he did not hold an undergraduate degree. Mungers father attended Harvard University to become a lawyer, and a family friend of theirs named Roscue Pound, former dean of Harvard, convinced the dean of Harvard at the time to admit Charlie Munger into their law program. After Charlie Munger was admitted to Harvard University to study law he moved to Boston with his wife. During his time at Harvard Munger was a member of the Harvard Legal Aid Bureau, and he graduated magna cum laude with a Jurisprudence degree (J.D.) in 1948.

Munger began attending the University of Michigan in 1941, where he studied math. In 1943, he joined the US Army Air Corps as a second lieutenant. After earning a high score on an army intelligence test, Munger was sent to study meteorology at the California Institute of Technology. He then applied to Harvard Law School, but was rejected at first because he didn't have an undergraduate degree. Roscoe Pound, the school's former dean, was a friend of the Munger family and intervened on his behalf, allowing Munger to gain admission. He graduated magna cum laude in 1948 with a doctor of jurisprudence degree, despite never earning an undergraduate degree.

After graduating from Harvard Law School, Munger moved to California with his wife, Nancy Huggins, and began practicing real estate law. He joined the law firm Musick Peeler & Garrett, which represented wealthy local entrepreneurs. He also partnered with Franklin Otis Booth to develop real estate. They handled multiple projects at once, netting Munger several million dollars within a few years. In 1959, Munger met Warren Buffett at a dinner party held by a mutual acquaintance. The two immediately hit it off and went out later that same night by themselves. In a recall of the night, Buffett stated, “We went to dinner and in five minutes, Charlie was rolling on the floor laughing at his own jokes—and I do the same thing. We knew we were sort of made for each other." In 1962 Munger founded the law firm Munger, Tolles & Olson, which he left in 1965 in order to focus on investing full time due to Buffett's advice.

In 1962 Munger founded a hedge fund called Wheeler, Munger & Co., which he ran until 1975. During those years he generated compound annual returns of 19.8 percent, compared to the 5 percent annual appreciation rate for the Dow during that same time. Munger then became vice chairman of Berkshire Hathaway in 1978, serving as Warren Buffett's right-hand man and investment partner. Munger took a calculated and objective approach to investments throughout his life. He analyzed companies without emotion or hope, choosing ones that appeared timeless yet undervalued. He once stated, “Forget what you know about buying fair businesses at wonderful prices; instead, buy wonderful businesses at fair prices.” Buffett said that Munger kept him from allowing Berkshire to pursue the "foolish" approach of cigar butt investing, which is the practice of investing in a dying business for cheap to make a small profit: “Charlie understood this early; I was a slow learner.” Munger purchased stocks with the intention of holding them long-term in order to generate compound interest for many years. This practice allowed for a greater return and a lower tax burden upon the eventual sale of the stocks.

Munger donated hundreds of millions of dollars to educational institutions throughout his lifetime, including to the University of Michigan, Stanford University, Harvard Law School, University of California Santa Barbara (UCSB), Polytechnic School, and Harvard-Westlake. His donations were often made with the stipulation that the funded school accept his architectural designs for buildings, even though he was not a trained architect. Munger received backlash for his design of a largely windowless dorm for UCSB which he described as "cheerful." He also made donations to Good Samaritan Hospital, Huntington Library, and Planned Parenthood.

Charlie Munger was born in Omaha, Nebraska January 1,1924 and has 9 children (7 of his own and two step children). Munger's first marriage (at the age of 21) was with Nancy Huggins Freeman. They had 3 children together and divorced in 1953. Nancy Freeman died on July 22, 2002 at the age of 76 from cancer. A few years after his divorce with Nancy Freeman, Charlie Munger married Nancy Barry in 1956, and her two children became Charlie Munger's step children. They stayed married until Nancy's death on February 6, 2010 at the age of 86. Nancy Barry and Charlie Munger had 4 children together, and one of their children named Teddy was diagnosed with leukemia at the age of 8 and would later die at the age of 9.

Charlie Munger is the son of Alfred Charles Munger (a Harvard educated a lawyer) and Florence Munger, and the grandson of Thomas Charles Munger. His grandfather was Thomas Charles Munger, was born into poverty on July 7, 1861 in Fletcher, Ohio. He worked to improve the circumstances of his family throughout his life, and was known for being a strict disciplinarian. He made sure everyone in his family read Robinson Crusoe by Daniel Defoe, to better understand that conquest of the natural world is possible through discipline. He enjoyed lecturing his family on the virtues of saving money and avoiding vices such as saloons and gambling.

Munger married his first wife, Nancy Huggins, in 1945. Huggins was Munger's sister's college roommate. The couple had three children together: Wendy, Molly, and Teddy, who died of leukemia at age nine. Huggins and Munger divorced in 1953, and a few years later Munger married Nancy Barry. Barry and Munger had four children of their own: Charles Jr., Emilie, Barry, and Philip. Munger was also a stepfather of Barry's two children, William Harold Borthwick and David Borthwick. They remained married until Nancy's death on February 6, 2010.

On November 28, 2023, Munger died at a California hospital. He was 99. Warren Buffett stated, "Berkshire Hathaway could not have been built to its present status without Charlie's inspiration, wisdom and participation." Berkshire has not publicly discussed a replacement for Munger.

In the chronicles of American financial history, Charlie Munger will be seen as the proverbial enigma wrapped in a paradox—he is both a mystery and a contradiction at the same time."––David Clark, The Tao of Charlie Munger: A Compilation of Quotes from Berkshire Hathaway’s Vice Chairman on Life, Business, and the Pursuit of Wealth

Thomas C. Munger would later be nominated by Theodore Roosevelt on February 27, 1907 to become a judge for U.S. District Court of Nebraska. Charlie Munger's daughter Molly Munger said the following addressing the influence of her great grandfather, Thomas Charles Munger, has had on the Munger family during a special event at the Harvard Law School Alumni Center:

I’m the descendant of a great-grandfather who taught his children that you don’t get that many opportunities in life, and when one comes along, you have to have the courage and determination to grasp it, and play the game hard… That is a lesson that any of you can learn.

Charlie Munger is most well known around the world for his investment activities. After successfully founding his own law firm working as a real estate attorney, Munger gave up practicing law to focus on managing investments. From 1962 to 1975 Charlie Munger ran his own investment partnership where he generated approximately a 19.8% compound return (compared to the 5% annual return of the DOW during the period of time between 1962 to 1975).

He would later meet Warren Buffet at a friends homecoming dinner party in 1959, after being introduced to each other by a doctor in Omaha attending the party who believed the two would get along. After meeting each other both Munger and Warren began speaking on a regular basis through phone calls and handwritten letters. Warren Buffet noticed the success of Munger's investments and investing philosophy and chose to bring him to Berkshire Hathaway, where Munger would eventually become vice chairman. In an interview in the Wall Street Journal, Charlie Munger told reporters that he holds Warren Buffet solely responsible for convincing him to leave his law practice to focus on investing, he said:

Warren talked me into leaving the law business, and that was a very significant influence on me. I was already thinking about becoming a full-time investor, and Warren told me I was far better suited to that. He was right. I would probably have done it myself, but he pushed me to it. I have to say, it isn’t an easy thing to work very hard for many years to build up a significant career, as I had done, and then to destroy that career on purpose. That would have been a lot harder to do if not for Warren’s influence on me. it wasn't a mistake. It worked out for the both of us and for a lot of other people...

Warren Buffet is confident him and Charlie Munger made Berkshire Hathaway into a successful investment management business that will last long after they leave the company. During the 2014 Berkshire Hathaway annual shareholders meeting Buffet said:

All told, Berkshire is ideally positioned for life after Charlie and I leave the scene. We have the right people in place – the right directors, managers and prospective successors to those managers. Our culture, furthermore, is embedded throughout their ranks. Our system is also regenerative. To a large degree, both good and bad cultures self-select to perpetuate themselves. For very good reasons, business owners and operating managers with values similar to ours will continue to be attracted to Berkshire as a one-of-a-kind and permanent home.

Charlie Munger is also the chairman of Wesco Financial Corporation, a subsidiary of Berkshire Hathaway. Wesco began as a savings and loans association and expanded into controlling Precision Steel Corp., CORT Furniture Leasing, Kansas Bankers Surety Company, and several other ventures. Munger also helped Wesco build an equity portfolio worth over $1.5 billion. Wesco's equity portfolio is primarily made up of Coca-Cola, American Express, Wells Fargo, and Proctor & Gamble. During the annual shareholders meeting for Wesco, Munger is known to speak for hours with shareholders and joke about what one his his idols, Benjamin Franklin, would do in given situations.

Charlie Mungers investing philosophy focuses on minimizing risk by simplifying his investment portfolio into a concentrated number of stocks he knows very well, and ensuring he maintains highly ethical investment standards. Charlie Munger made the following statements about why he keeps his investment strategy simple "Simplicity has a way of improving performance by enabling us to better understand what we are doing", and "If something is too hard, we move onto something else. What could be simpler than that? We have passion for keeping things simple". At the annual Wesco Financial meeting of 2009 Munger commented on the importance of ethical investing by saying "Good Businesses are ethical businesses. A business model that relies on trickery is doomed to fail".

In June 1995 Charlie Munger gave a famous speech at the Harvard Law School titled "The Psychology of Human Misjudgement" where he spoke about how minimizing misjudgement has been the key to his investment success over the course of his life. During his speech Munger outlined what he believes to be the 22 standard causes of human misjudgement. They are:

1. First: Under-recognition of the power of what psychologists call “reinforcement” and economists call “incentives.”
2. My second factor is simple psychological denial.
3. Third: invcentive-cause bias, both in one's own mind and that of ones trusted advisor, where it creates what economists call 'agency costs.'
4. Fourth, and this is a superpower in error-causing psychological tendency: bias from consistency and commitment tendency, including the tendency to avoid or promptly resolve cognitive dissonance. Includes the self confirmation tendency of all conclusions, particularly expressed conclusions, and with a special persistence for conclusions that are hardwon.
5. Fifth: bias from Pavlovian association, misconstruing past correlation as a reliable basis for decision-making.
6. Sixth: bias from reciprocation tendency, including the tendency of one in a role to act as other persons expect.
7. Seventh, now this is a lollapalooza, and Henry Kaufman wisely talked about this: bias from over-influence by social proof -- that is, the conclusions of others, particularly under conditions of natural uncertainty and stress.
8. Nine [he means eight]: What made these economists love the efficient market theory is the math was so elegant.
9. Nine: bias from contrast-caused distortions of sensation, perception and cognition.
10. Bias from over-influence by authority.
11. Eleven: bias from deprival super-reaction syndrome, including bias caused by present or threatened scarcity, including threatened removal of something almost possessed, but never possessed.
12. Bias from envy/jealousy.
13. Bias from chemical dependency.
14. Bias from mis-gambling compulsion.
15. Bias from liking distortion, including the tendency to especially like oneself, one’s own kind and one’s own idea structures, and the tendency to be especially susceptible to being misled by someone liked. Disliking distortion, bias from that, the reciprocal of liking distortion and the tendency not to learn appropriately from someone disliked.
16. Seventeen [he means 16]: bias from the non-mathematical nature of the human brain in its natural state as it deals with probabilities employing crude heuristics, and is often misled by mere contrast, a tendency to overweigh conveniently available information and other psychologically rooted misthinking tendencies on this list.
17. Now we come to bias from over-influence by extra-vivid evidence.
18. Twenty-two [he means 18]: Mental confusion caused by information not arrayed in the mind and theory structures, creating sound generalizations developed in response to the question “Why?” Also, mis-influence from information that apparently but not really answers the question “Why?” Also, failure to obtain deserved influence caused by not properly explaining why.
19. Other normal limitations of sensation, memory, cognition and knowledge.
20. Stress-induced mental changes, small and large, temporary and permanent.
21. Then we’ve got other common mental illnesses and declines, temporary and permanent, including the tendency to lose ability through disuse.
22. And then I’ve got mental and organizational confusion from saysomething syndrome.

Charlie Munger has made many philanthropic contributions over the course of his life primarily to improve health, education, and the Los Angeles community. He was critical of philanthropy until later in his career where he began engaging in philanthropic activities.

Charlie Munger has not signed the Giving Pledge created by his partner Warren Buffet because he says that he has already violated its terms. In an interview with Andrew Serwer Munger said:

Well, I wouldn't sign the Giving Pledge 'cause I've already transferred so much to my children that I've already violated it. So I think I'm asking, I'm seeking false credit if I join them and say I'm a big philanthropist that's going to give more than half of my wealth to charity. I've already given more than half of it to my children. So I can't join them. It's like coming back from the dead. I can't do it.

Munger has donated more than $110 million dollars to the University of Michigan (the largest donations in the universities history) to build their graduate center ($10 million went directly to fund graduate student fellowships), contributed $65 million to the theoretical physics department at the University of Santa Barbara (UCSB), another $200 million to UCSB at a later date, and a $20 million donation of class A Berkshire Hathaway stocks to the University of South Carolina Beaufort.

Munger's donation of $110 million to build a graduate student building at the University of Michigan was to encourage graduate students of different disciplines to exchange ideas with each other because during his time at studying law at Harvard University he saw little interactions between students of different disciplines. Munger's $65 million dollar donation the theoretical physics department of the University of Santa Barbara went towards creating a 61-bed residence for physicists visiting the institute to help them exchange ideas with each other. Munger said his donation is significant because:

U.C.S.B. has by far the most important program for visiting physicists in the world. Leading physicists routinely are coming to the school to talk to one another, create new stuff, cross-fertilize ideas.

In March 2016 Charlie Munger donated another $200 million to UCSB for building a new residence halls on their campus, and Munger said the funds will be used to create "the best undergraduate housing in the world". The funds will build two student housing projects on 28-acres of land where existing dormitories already exist. The residences will be two six story building, and are estimated to reduce the cost of student housing for students by approximately 60%.

Munger has also been a major contributor to Stanford University, Polytechnic School in Pasadena, California Harvard -Westlake, and other academic institutions him and his family have been involved with. He has also made a point of focusing his philanthropic contributions directly to educational institutions operating within the Los Angeles community by giving gifts to the Huntington Library and the Los Angeles YMCA.

Charlie Munger is the chairman of Good Samaritan Hospital and has helped with several major funding campaigns for the hospital. Munger also has donated some of his Berkshire Hathaway stock to Planned Parenthood.

On March 5, 2019 Charlie Munger was ranked number 1425 on the Forbes annual list of billionaires with a reported net worth of $1.6 billion.

Charlie Thomas Munger is an American business magnate, lawyer, investor, and philanthropist born in Omaha, Nebraska on January 1, 1924. He is the vice chairman of Berkshire Hathaway, chairman of the Daily Journal Corporation, chairman of Wesco Financial Corporation, Chairman of Good Samaritan Hospital, and the director of Costco Wholesale Corporation.