On the evening of February 24th Beijing time, Berkshire Hathaway released its 2023 annual report and Buffett's annual shareholder letter. Unlike previous years, Buffett's old partner Charlie Munger passed away in November last year at the age of 99. So this year's annual report starts with a letter from Buffett commemorating his old friend.
The following is the original text of Buffett's handwritten letter:
Charlie Munger - Architect of Berkshire Hathaway
Charlie Munger passed away on November 28th, just 33 days after his 100th birthday.
Although he was born and raised in Omaha, Nebraska, he lived 80% of his life elsewhere. Therefore, it was not until 1959, when he was 35 years old, that I first met him. In 1962, he decided to start working in the fund management industry.
Three years later, he told me - this was a very correct thing - that my decision to buy Berkshire was foolish. However, he assured me that since I had taken action, he would tell me how to correct my mistake.
In the following narrative, please remember that Charlie and his family did not invest a single penny in the small investment partnership I managed at the time, and it was with these funds that I purchased Berkshire. Moreover, we never expected Charlie to own shares in Berkshire at the time.
However, Charlie immediately advised me in 1965, "Warren, forget about buying other companies like Berkshire. But since you now control Berkshire, increase the number of excellent businesses that buy at fair prices and abandon the practice of buying ordinary businesses at good prices. In other words, abandon everything you learned from your hero Ben Graham.". This method is effective, but only works for small-scale operations After looking back multiple times, I finally followed his guidance.
Many years later, Charlie became my partner in running Berkshire and repeatedly pulled me back to rationality when I fell into old habits. Until his death, he continued to play this role, and together with those who had invested with us in the early days, our ultimate achievements far exceeded the possibilities that Charlie and I had imagined.
In fact, Charlie is now the "architect" of Berkshire, and I play the role of the "general contractor", fulfilling his vision day after day.
Charlie never attempted to take credit for his role as a creator, but instead asked me to accept applause and honor. In a sense, the relationship between him and me is both like a brother and a loving father. Even when he knew he was right, he gave control to me, and when I (eventually realized) made a mistake, he never - never - repeated my mistake.
In the material world, great buildings are associated with their architects, and those who pour concrete or install windows are quickly forgotten. Berkshire has grown into a great company. Although I have been in charge of the construction team for a long time, Charlie should always be considered an architect.
English original text:
Charlie Munger - The Architect of Berkshire Hathaway
Charlie Munger died on November 28, just 33 days before his 100th birthday
Through born and raised in Omaha, he spent 80% of his life dominated elsewhere Consistently, it was not until 1959 when he was 35 that I first met him In 1962, he decided that he should take up money management
Three years later he held me - correctly! - That I had made a dummy decision in buying control of Berkshire But, he assured me, since I had already made the move, he would tell me how to correct my mistake
In what I next related, bear in mind that Charlie and his family did not have a dim invested in the small investing partnership that I was then managing and which money I had used for the Berkshire purchase Moreover, neither of us expected that Charlie would ever own a share of Berkshire stock
Never less, Charlie, in 1965, prompt advised me: "Warren, forget about ever buying another company like Berkshire. But now that you control Berkshire, add to it wonderful businesses purchased at fair prices and give up buying fair businesses at wonderful prices. In other words, on everything you learn from your hero, Ben Graham. It works but only what" en practiced at small scale. " With multiple back sliding I subsequently followed his instructions
Many years later, Charlie was my partner in running Berkshire and, repeatedly, jerked me back to sanity when my old hats surface Until his death, he continued in this role and together we, along with those who are early on invested with us, ended up far better off than Charlie and I have ever dreamt possible
In reality, Charlie was the "architect" of the present Berkshire, and I acted as the "general contractor" to carry out the day by day construction of his vision
Charlie never thought to take credit for his role as creator but instead let me take the bows and receive the accolades In a way his relationship with me was part older brother, part loving father Even when he knew he was right, he gave me the reins, and when I blurred he never never never reminded me of my mistake
In the physical world, great builds are linked to their architect while those who have pooled the concrete or installed the windows are soon forgotten Berkshire has become a great company Through I have long been in charge of the construction crew; Charlie should never be credited with being the architect