Inspired by Charlie Mungers speech on twenty-five psychological tendencies that bring about misjudgment, as presented inPoor Charlies Almanack, I wrote this article in 2016 and also wrote additional articles on several of the specific tendencies. This newsletter is not investment advice and all content is subject to thecopyright and disclaimer policyof The Rational Walk LLC, publisher of Rational Reflections. Charlie Munger: Investment partnership. The Rational Walk is now available either on this website or on Substack where readers can subscribe for free to receive articles via email. [68] Munger states he is "not a normal Republican", for example advocating "medicare for all" as a fix to the U.S. healthcare system, saying "I think we should have It took my attendance at the 2000 Berkshire Hathaway annual meetingto get a senseof Mr. Mungers personality, intellect, and character. The chapters of Charlie Mungers life in the 2000s, 2010s, and 2020s deserve to be documented in a new biography. Janet Lowe's access to the Munger family provided much insight into Charlie Munger's personality from the perspective of his wife, children, grandchildren, and friends. A few years later, in 1953, Charlie was 29 years old when he and his wife divorced. In addition, he served as Chairman of Wesco Financial until Berkshire acquired the remaining minority interests in Wesco in 2011. Charles Munger, vice chairman of Berkshire Hathaway Inc., left, and Warren Buffett, chairman of Berkshire Hathaway Inc., attend a BYD Co. press event in China, on Monday, Sept. 27, 2010. Charlie Munger's Midwestern family valued hard work and integrity. "A happy life is very simple," the 97-year-old Munger said during the Annual Meeting of. ", Instead of living with high expectations and worrying about what will come next, Munger suggests you "slug it out one inch at a time, day-by-day, and at the end of the day if you live long enough like most people, you will get out of life what you deserve. I thought it was undignified to have to send invoices to other people. Discharge your duties faithfully and well. Divorce had a huge social stigma attached at that time and it was the first blow for Munger. I had Thomas Jefferson over my bed at seven or eight. Those include: adding operable windows to each multi-bedroom suite and as many bedrooms as possible, increasing the size of single bedrooms to match their current size of other singles within the universitys existing housing, and reducing the building mass and population density. "[21] During an interview and Q&A session at Harvard-Westlake School on January 19, 2010, Munger referred to American philosopher Charles Frankel in his discussion on the financial crisis of 200708 and the philosophy of responsibility. My goal is to eventually write one article on each of the twenty-five tendencies. A traditional midwestern upbringing during the Great Depression is a big part of Charlie Mungers life experience. in January 2001, no doubt as a gift, although I cannot recall who I gave the book to. These questions are difficult to answer. is that it is now quite outdated. Munger responded with his three basic rules: During the Berkshire Hathaway Annual Shareholders Meeting in 2017, Munger and Berkshire Hathaway CEO Buffett agreed that young people should pursue a career they love and believe in, rather than picking the job that pays the most. Inspired by Charlie Mungers speech on twenty-five psychological tendencies that bring about misjudgment, as presented inPoor Charlies Almanack, I wrote this article in 2016 and also wrote additional articles on several of the specific tendencies. Young Charlie had a reputation for being a star student, but he could be challenging for teachers to deal with due to his fierce independence. He had been married since he was 21. He has four children from his second marriage with Nancy Barry, the daughter of David Noble Barry Jr. and Emilie Hevener Barry: physicist and Republican activist Charles T. Munger Jr., Emilie Munger Ogden, Barry A. Munger, and Philip R. Munger, and two stepchildren: William Harold Borthwick and David Borthwick. The renovated portion of the Lawyers Club will be renamed the Charles T. Munger Residences in the Lawyers Club in his honor. Here was a man in his mid-30's, with health problems, family problems, and money . [19], In multiple speeches, and in the book Poor Charlie's Almanack: The Wit and Wisdom of Charles T. Munger, "worldly wisdom" consists of a set of mental models framed as a latticework to help solve critical business problems. By 1953, he had three children and was going through a divorce. In the decade after meeting Warren Buffett, Charlie Munger became a participant in a series of meetings with disciples of Benjamin Graham. The next year, Mr. Mungers son, Teddy, was diagnosed with leukemia, a disease that had no treatment at the time. He eventually achieved his dream of having a lot of money, a house full of books, and a huge family. Although Charlie Munger often minimizes his role in leading Warren Buffett away from cigar butt investing and toward commitments to high quality companies, the truth is that Mr. Mungers role is simply undeniable. Munger moved into dreadful conditions at the University Club and drove a terrible yellow Pontiac, which his children said had a horrible paint job. This was despite the fact that the 1973-74 bear market was brutal for the partnership with a loss of 31.9% in 1973 and 31.5% in 1974, far in excess of the DJIAs decline of 13.1% and 23.1%, respectively. I was first introduced to Charlie Munger in the pages of Roger Lowensteinsbiography of Warren Buffett which I read shortly after it was published in 1995. Such meetings were often perfunctory, but Munger interacted with the other Wesco shareholders at considerable length, sometimes speculating about what Benjamin Franklin would do in a given situation. The acquisition of this company was controversial following accusations that Buffett's company, Blue Chip bought Wesco shares to defeat an impending merger between Wesco and Financial Corp.[14][15] Wesco began as a savings and loan association, but eventually grew to control Precision Steel Corp., CORT Furniture Leasing, Kansas Bankers Surety Company, and other ventures. The dawning of a new year is a time for optimism and hope for self-improvement, but vague wishes rarely bring about concrete results. [4] The couple also donated to the Polytechnic School in Pasadena and the Los Angeles YMCA. and will be of interest to readers who follow the company. When he was a teenager, he was employed at Buffett & Son, a grocery store of which Buffett's grandfather was the owner. Recently, I realized thatDamn Right! He is vice chairman of Berkshire Hathaway, the conglomerate controlled by Warren Buffett; Buffett has described Munger as his closest partner and right-hand man. They never met at the time, as Munger is six years older than the other man. It is tempting to emulate investors who we admire but it is unwise to blindly follow any investor into a stock. Get Make It newsletters delivered to your inbox, Learn more about the world of CNBC Make It, 2023 CNBC LLC. The panel cited the risk of COVID-19 transmission and other illnesses, safer evacuation routes, and less of a psychological strain on students linked to living in rooms without natural air or sunlight as a few issues that factored into their recommendations. He was hired at the law firm of Wright & Garrett for $3,300 per year, or $29,851 in inflation-adjusted dollars as of 2010. However, the team said that modifications to the design based on feedback represent a meaningful challenge and will require thoughtful consideration.. The biography had atransformational effecton my life but the focus of the book was not on Charlie Munger. Feeling like a victim is a perfectly disastrous way to go through life. [57][58] In October, 2021, Munger's insistence that the university follow his design compelled professional architect, Dennis McFadden, who had served the university for two decades, to resign from the university's Design Review Committee. [42][43], Munger has not signed The Giving Pledge that was started by his partner Warren Buffett and co-director, Bill Gates,[44] and has stated that he "can't do it" because "[he has] already transferred so much to [his] children that [he has] already violated it."[45]. Ireviewedthe book in 2015. Overpaying for an investment is undesirable but time can heal many wounds if the underlying business continues to perform well. He is known for being a Entrepreneur. While Munger attended several universities for various advanced courses, he never obtained an undergraduate degree. If you just take the attitude that however bad it is in anyway, its always your fault and you just fix it as best you can the so-called iron prescription I think that really works.Charlie Munger. In the 2018 edition of "Poor Charlie's Almanack," a book of insight from Charlie Munger throughout his career, editor Peter Kaufman asked Munger what young people should look for in a career. In the Tupperware party, you have reciprocation, consistency and commitment tendency, and social proof. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice| Do Not Sell/Share My Personal Information| Ad Choices I highly recommend it. It makes no sense to engage in short term relationships with investments, but it is also hazardous to fall in love with a company or its management. The story of how Charlie Munger and Rick Guerin acquired control of Daily Journal is covered inDamn Right! Munger has been a trustee of the Harvard-Westlake School in Los Angeles for more than 40 years, and previously served as chair of the board of trustees. Dan Sickles, a 33-year-old New York-based filmmaker who purchased an NFT of Buffett's painting Opal Moon No. Mr. Munger enrolled in college in the fall of 1941 shortly before the Pearl Harbor attack upended American life. He regards all eight as simply his children without making any distinctions. Munger believes that holding a concentrated number of stocks that he knows extremely well will in the long term produce superior returns. 1999 was the last year that Berkshire disclosed Sees results as a separate business segment. Charles Thomas Munger is a business owner, investor, former real estate lawyer, and philanthropist from America, who presently serves as the vice-chairman of Berkshire Hathaway, the conglomerate controlled by Warren Buffett. In addition to the his role alongside Buffett, Munger is chairman of the publisher the Daily Journal Corp. and is on the board of the big-box retailer Costco. ", "I've got some advice for the young," Munger added. I cant remember when I first read Ben Franklin. The massive 11-story, 1.68 . Buffet has described Munger as " [his] partner." Munger served as chairman of Wesco Financial Corporation from 1984 through 2011. Charlie Munger was married to his first wife, Nancy Huggins, from 1945 to 1953. Behind the Scenes with Charlie MungerI apparently purchased a second copy ofDamn Right! In 1978, he was appointed the vice-chairman of Berkshire Hathaway, where he and Buffett have worked together ever since. Last week, at The Daily Journal annual meeting in Los Angeles, California, Munger was asked to reflect on that journey. might be surprised to learn that this habit began in early childhood. [71][72], In his 50s, after a failed eye cataract surgery that rendered his left eye blind, Munger had his left eye removed due to severe pain. After the firm accumulated losses of 32% in 1973 and 31% in 1974, he was forced to wind it up in 1976. [40], On December 28, 2011, Munger donated 10 shares of Berkshire Hathaway Class A stock (currently valued at $481,021 per share, or $4.81 million total) to the University of Michigan. Subscribe to CNBC Make It on YouTube! I submitted three questions to Becky Quick for consideration. Although not known for extravagance, the Munger family has long enjoyed reuniting for summer vacations at a family compound at Star Island which is situated in a lake in northern Minnesota. A better approach is to seek wisdom from those who have been successful in businessandin life so we can emulate what has already worked for others. In 1955, Teddy died at the age of nine leaving Mr. Munger devastated by his loss. Pasadena was also the site of the company's annual shareholders' meeting, which were typically held on the Wednesday or Thursday after the more famous Berkshire Hathaway annual meeting. An experiment. Munger said he was "intimately familiar with university housing," because of his experience with his children and grandchildren, . Charlie Munger moved back to Omaha during 1959 and was soon introduced to Warren Buffett. Well-managed expectations, according to Berkshire Hathaway ( BRK-A, BRK-B) Vice Chairman Charlie Munger. The price tag was three times book value, a figure that no doubt gave Warren Buffett heartburn! After posting a 73.2% return in 1975, the partnership shut down. A better approach is to seek wisdom from those who have been successful in businessandin life so we can emulate what has already worked for others. "When you go out in the world, look for the job you would take if you didn't need the money," Buffett said. It was an unusual move for the billionaire investor and Warren Buffetts right hand man, which almost instantly invited backlasha consulting architect quit in protest, and in his resignation letter called the building unsupportable from my perspective as an architect, a parent, and a human being.. This is an outstanding book that explains the multi-disciplinary mindset expressed in Charlie Mungers speeches and writings, several of which are presented in its illustrated pages. That was certainly true of Sees Candies at the time and proved to be even more true as time went on. He is vice chairman of Berkshire Hathaway, the conglomerate controlled by Warren Buffett. In the essay The Superinvestors of Graham-and-Doddsville, published in 1984, Buffet wrote that the compound annual returns of Mungers investment partnership were of 19.8% during the 196275 period compared to the 5.0% annual appreciation rate for the Dow. The only real criticism ofDamn Right! He's been Warren Buffett 's right-hand man for the last 40 years, and is more formally known as vice chairman of Berkshire Hathaway. The dawning of a new year is a time for optimism and hope for self-improvement, but vague wishes rarely bring about concrete results. For the American politician, mayor of Orlando, see, Munger at Berkshire Hathaway's 2010 shareholder meeting, Criticism of cryptocurrencies and Robinhood, The Superinvestors of Graham-and-Doddsville, Poor Charlie's Almanack: The Wit and Wisdom of Charles T. Munger, "Munger, Thomas Charles | District of Nebraska | United States District Court", "The World's Billionaires #1324 Charles Munger", "The Superinvestors of Graham-and-Doddsville", "$45,000 a Share, $1,500 a Share or $264 a Share", "Financier Munger Gives DuBridge Lecture", "Whitney Tilson's 2007 Wesco Annual Meeting Notes", "Interview with Peter Bevelin, author of Seeking Wisdom - from Darwin to Munger", Charlie Munger's got a billion words of wisdom, "Charlie Munger on the Psychology of Human Misjudgment", "Inversion and The Power of Avoiding Stupidity", "Bitcoin breaks 7,000 after Buffet investment chief calls it 'poison', "Bitcoin is 'disgusting and contrary to the interests of civilization' says famed investor Charlie Munger", "Charlie Munger says cryptocurrencies should have been banned earlier", "Charlie Munger on bitcoin: 'Disgusting,' 'stupid,' 'immoral,' 'turds', "Buffett business partner Munger slams US-China tensions, crypto", "Bitcoin bulls go on the offensive against Berkshire Hathaway", Berkshire's Munger Gives $20 Million to Michigan Law School, Former Michigan student Charles Munger donates $20 million for Lawyers Club renovation project, $20 million gift jumpstarts renovation at M Law's Lawyers Club, "Munger Donates $1.2 Million to University of Michigan", Mungers donate $43.5 million to help construct new graduate student residence, Stanford: $43.5 million given for more graduate student housing, "Charlie Munger talks about investing and life choices that secure prosperity", "Architect Resigns in Protest over UCSB Mega-Dorm", "Buffett associate Charlie Munger pledges $110 million to University of Michigan", "$110 million donation largest in UM history", "Warren Buffett's Investing Pal Charlie Munger Has Been Busy Designing College Dorms", Memorial to be held in March for former trustee Nancy Barry Munger, Munger donates $800,000 of stock to school, Munger Gives 100 Shares of Berkshire to Prep School, A Science Teacher's Dream in Studio City: New $13-million center gives students at Harvard-Westlake School top-notch, hands-on lessons, "Charles Munger, Warren Buffett's Longtime Business Partner, Makes $65 Million Gift", "Charlie Munger Donates $200 Million to UCSB for New Dorms", "Billionaire Donates $200M To Fix 'Gross' Dorms", "Political novice no stranger to upending status quo", "Chapter One: An Extraordinary Combination of Minds", "Memorial to be held in March for former trustee Nancy Barry Munger", "Charlie Munger: Democrats hate Trump 'so much that they're against him even when he's right', "Full Transcript: Billionaire Investor Warren Buffett Speaks with CNBC's Becky Quick on 'Squawk Box', "Charlie Munger: We Should Have Single-Payer Medicine | Squawk Box | CNBC", "Charlie Munger on health care: 'We should have a single payer system', "Charlie Munger: America's health care system is a 'national disgrace', "Lessons on Adversity from Charlie Munger: Be a Survivor, Not a Victim", https://en.wikipedia.org/w/index.php?title=Charlie_Munger&oldid=1139674224, American chief executives of financial services companies, California Institute of Technology alumni, People associated with Munger, Tolles & Olson, United States Army Air Forces personnel of World War II, University of Michigan College of Literature, Science, and the Arts alumni, Articles with dead external links from November 2019, Articles with permanently dead external links, Short description is different from Wikidata, Pages using infobox person with multiple spouses, Pages using infobox military person with embed, Creative Commons Attribution-ShareAlike License 3.0, Leading investments at Berkshire Hathaway with. Recently, I realized thatDamn Right! "), "[Jacobi] knew that it is in the nature of things that many hard problems are best solved when they are addressed backward," Munger counsels. [69][70] Munger repeated his sentiments in another interview, praising Singapore's single payer system in contrast to the U.S. "insane" system which is a "national disgrace". No email addresses or any other subscriber information is ever sold or provided to third parties. When the merger was defeated, Wesco shares fell and Blue Chip moved to acquire control. Weight, Hair color An independent panel of UCSB faculty experts, outside stakeholders, and industry leaders reviewed and discussed the proposed plan for five months before delivering their recommendations this week. According to Charlie Munger, during his time in college and the army, he learned a very important skill, playing cards. "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. Author Peter Bevelin explained his key learnings from both Munger and Buffett in a 2007 interview: "How to think about businesses and investing, how to behave in life, the importance of ethics and honesty, how to approach problems but foremost how to reduce the chance of meeting problems." The Mungers had previously made a gift to build the $13 million Munger Science Center at the high school campus, a two-story classroom and laboratory building which opened in 1995 and has been described as "a science teacher's dream". This began a longstanding partnership that has lasted over six decades. Following the chapters on Blue Chip Stamps and Wesco, the book covers events that are increasingly familiar to most readers who have followed the history of Berkshire Hathaway, including the rapid growth of the company throughout the 1980s and the transformation of the company in the 1990s with the General Re and GEICO acquisitions. At the age of nine, Teddy died of leukaemia. Graduating in 1948, Mr. Munger joined a law firm in the Los Angeles area and seemed to be set for a traditional career in law. FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. https://www.youtube.com/watch?v=peUrLZ24GfM, https://www.youtube.com/watch?v=MsAzifTfM7w, https://www.youtube.com/watch?v=8MUAz1mqNCQ, https://www.youtube.com/watch?v=gLPJHTlYZxI, https://www.youtube.com/watch?v=tf6PQBkXGxY. Poor Charlies Almanack. In 1949, Charlie Munger was 25 years old. If you don't see . They had three children, Wendy Munger (a former corporate lawyer, trustee of Stanford University, and trustee of The Huntington Library[61][62]), Molly Munger (a civil rights attorney and funder of a ballot initiative to raise California taxes for public education[63]) and Teddy Munger (deceased, leukemia, age 9). This led to an unpleasant investigation of the tangled web of ownership between Berkshire, Diversified Retailing, Blue Chip, and Wesco that was eventually settled for $115,000.