On Tuesday, November 28th local time, Berkshire Hathaway released a statement on its subsidiary, the US Business Information website, stating that the family of Vice Chairman Charlie Munger had informed the company a few minutes ago that Munger had passed away peacefully in a hospital in California that morning at the age of 99. It's only over a month since his 100th birthday.
Warren Buffett stated in a statement, "Without Charlie's inspiration, wisdom, and involvement, Berkshire Hathaway could not have achieved its current status."
In addition to serving as the deputy to Warren Buffett, the stock god, at Berkshire, Munger also serves on the boards of Daily Journal Corp and Marketplace. According to Forbes data, as of November 28th, Munger's net worth was $2.6 billion.
Legend of Generation One Investment
Public information shows that Charlie Munger was born on January 1, 1924, and is an American investor, Warren Buffett's golden partner, and the vice chairman of Berkshire Hathaway.
This 99 year old man, in the past 46 years, has teamed up with Buffett to create the best investment record ever - Berkshire's stock book value has created an investment myth with a compound annual return of 20.3%, and now the stock price per share is $547000.
In the early stages of his career, Charlie Munger was a lawyer, but he gradually developed a strong interest in investing. His acquaintance with Warren Buffett changed his life trajectory. The two shared common interests and began to invest together, founding the Berkshire Hathaway Company in 1965.
From 1984 to 2011, Charlie Munger served as the Chairman and CEO of Wesco Financial, when Buffett's Berkshire acquired the remaining shares of the insurance and investment company headquartered in Pasadena, California. Buffett praised Munger for expanding his investment strategy, shifting from favoring struggling companies at low prices for profit, to focusing on higher quality but underpriced companies.
In 1972, Munger convinced Buffett to agree to Berkshire's acquisition of See's Candies for $25 million, despite the California candy manufacturer's annual pre tax revenue being only about $4 million, as early examples of this transformation illustrate. Since then, the company has generated over $2 billion in sales for Berkshire.
Charlie Munger is also a philanthropist. Charlie Munger donated hundreds of millions of dollars to educational institutions including the University of Michigan, Stanford University, and Harvard Law School, and often required schools to accept his architectural designs, even though he did not receive formal training as an architect.
In 1977, Buffett recalled in an interview, "Our thoughts were so similar that it was chilling." "He was the smartest and most outstanding person I ever met."
In 2018, Buffett told CNBC's Becky Quake, "Throughout the entire time we've known each other, we've never had an argument, and it's almost 60 years now." "Charlie Munger gave me the ultimate gift that someone can give to others. He made me a better person than others... Over time, he gave me a lot of good advice... because of Charlie Munger, I lived a better life."
The fusion of ideas focuses on value investing, choosing stocks because their prices seem to be undervalued based on the company's long-term fundamentals. Charlie Munger once said, "All wise investments are value investments, that is, obtaining more than what you pay.". "You must value the company in order to value stocks."
During the COVID-19 in early 2020, Berkshire suffered a huge loss of $50 billion in the first quarter. Charlie Munger and Buffett were more conservative than during the Great Recession, when they invested in American airlines and financial companies hit hard by the recession, such as Bank of America and Goldman Sachs.
Munger believed that investment is not just a matter in the financial field, but involves a wide range of social, psychological, and cognitive sciences. His way of thinking and investment strategy are deeply influenced by these disciplines. He advocates that investors should have the ability to think independently, not be affected by short-term market fluctuations, and adhere to a long-term investment philosophy.
Overall, Charlie Munger is a legendary investment guru. His life experience and investment philosophy have profound enlightening significance for us to understand and handle the complexity of financial markets, as well as how to use wealth for social welfare and other aspects.
Attended the shareholder meeting in May this year
In May of this year, Berkshire's annual shareholder meeting, known as the "Spring Festival Gala" in the global investment community, was held in Omaha, Nebraska, the hometown of stock god Warren Buffett. Excluding the one hour lunch break at noon, 92 year old Buffett and 99 year old Munger answered a total of over 5 hours of questions. This is also Munger's last clear participation in the shareholder meeting.
Charlie Munger gave advice to value investors on how to maintain success in a rapidly changing environment: "Get used to diminishing returns." "What gives you the opportunity is for others to do stupid things." Buffett said, "People do big and stupid things, and the reason they do it is partly because they are more likely to get funding than we were at the beginning."
Munger said in response to investor questions that engaging the smartest people in wealth management is harmful to civilization, and we don't need so many wealth management managers.
Charlie Munger said, "I really don't like what these wealth managers are doing. I don't want anyone to enter this industry. I think because of them, the world has become crazy."
When answering questions about the future of artificial intelligence, Warren Buffett and Charlie Munger are both skeptical.
Munger said that if you go to BYD's factory in China, you will see robots everywhere, and the usage rate is really high. "So I think the use of robots will be increasing globally, and I myself feel a bit confused about some of the hype, especially about artificial intelligence. I think hiring people now is actually quite good."
On May 6th, Berkshire Hathaway released its Q1 2023 performance report, with Q1 revenue of $85.393 billion, compared to $70.843 billion in the same period last year; The net profit was 35.5 billion US dollars, compared to 5.58 billion US dollars in the same period last year. Investment and derivative gains amounted to $34.758 billion, with a loss of $1.978 billion in the same period last year.
Source: Berkshire Hathaway subsidiary website, Caixin, First Financial