[News Figures] Investment Genius's Close Partner 'Charlie Munger' Passes Away... End of 64-Year Friendship with Buffett

First Meeting in 1959 Introduced by a Local Acquaintance
Munger Joined Buffett's Berkshire in 1978
Buffett "Similar Thinking"... Munger "Mutual Respect"

Charlie Munger was always by the side of Warren Buffett, the "investment genius" who enjoys worldwide popularity. Every year at the annual shareholders' meeting, they sat side by side to share Berkshire Hathaway's investment approach and their investment philosophy with investors. At the 2002 meeting, Buffett said of Munger sitting next to him, "It's very good to have a partner who tells you 'you are thinking wrong'." Munger replied cheerfully, "That doesn't happen often." Laughter erupted among the shareholders present.

Chairman Warren Buffett (left in photo) and Vice Chairman Charlie Munger of Berkshire Hathaway
[Image source=AFP Yonhap News]

Vice Chairman Munger and Chairman Buffett built a friendship over nearly 70 years and were the best business partners leading the investment company Berkshire. On the 28th (local time), when Vice Chairman Munger passed away at the age of 99, Chairman Buffett mourned, saying, "Without Munger's inspiration, wisdom, and involvement, Berkshire would never have achieved its current status."

The first time Buffett and Munger connected was in 1959. According to CNBC and others, Munger, then in his mid-30s, was already renowned as a lawyer and investment manager who graduated from Harvard Law School. While working based in California, Munger’s father passed away, and after holding the funeral and settling his father's estate, Munger returned to Omaha, where a local doctor, Edwin David, introduced him to Buffett.

Buffett recalled several times in public how pleasant their first meeting was. During a meal, seeing Munger lying on the floor laughing heartily at one of his jokes, Buffett felt a great fondness and was instantly captivated.

In a 2021 CNBC interview, Buffett reflected, "I thought I couldn't find a man like this anywhere else." He added, "I immediately realized Charlie was someone I would like and had a lot to learn from." Munger also said he was drawn to Buffett’s humble demeanor.

Munger was born in 1924, and Buffett in 1930, making them six years apart. They quickly built a friendship based on their common origin from Omaha, Nebraska. Buffett said in a 2016 broadcast, "We grew up in similar environments. We both respected our fathers." Both had worked in a grocery store run by Buffett’s grandfather during childhood, but they did not meet at that time.

After becoming adults and establishing a personal friendship in their hometown, they officially became business partners more than ten years later, in 1978. Until then, in the 1960s, Munger worked at a California law firm and ran his own investment company.

However, Munger recorded significant losses of over 30% in his investment company in 1973 and 1974. He recalled, "It took a long time to realize that (Buffett) had a better way to build a life than I did," adding, "But eventually, he made me realize I was wasting my time."

Charlie Munger, Vice Chairman of Berkshire Hathaway
[Photo by Reuters Yonhap News]

Buffett began purchasing shares of Berkshire in 1962 and took over management in 1965, during which he often sought Munger’s advice. At that time, Buffett invested by acquiring struggling companies at low prices and later selling them. Munger advised that to build a sustainable company, they should buy companies with strong brands. Buffett credits this advice from Munger as the foundation of Berkshire’s current investment approach. Buffett described, "Munger was the architect, and I was the general contractor."

After Munger joined in 1978, Berkshire grew rapidly. From 1965 to last year, Berkshire recorded an average annual return of 20%. It currently owns insurance company Geico, BNSF Railway, and holds stakes in Coca-Cola, American Express, IBM, Wells Fargo, among others. As of last year, it employed over 370,000 people.

Many global business partners part ways easily, but these two maintained a strong partnership for over 40 years. They often discussed various issues together but rarely had major conflicts. Buffett attributed this to "thinking alike," meaning they shared similar senses of humor and points of empathy, which prevented serious clashes. Munger said, "We don’t think the same about everything, but we respect each other greatly."

In his annual letter to shareholders last year, Buffett described Munger as follows:

"Charlie and I think almost alike. But while I need about a page to explain an issue, he summarizes it in one sentence. Moreover, his explanations are always more rational and artistic. Some might say more straightforward."

Despite Munger’s passing, foreign media predict no impact on Berkshire’s management. Buffett and Munger, aware of their advanced age, recognized the need for younger executives and in 2021 appointed Greg Abel (61), Berkshire’s Vice Chairman and head of non-insurance business, as the next CEO. With Munger’s passing, Vice Chairman Abel is expected to build a closer relationship with Buffett and eventually succeed him in leading the company when Buffett steps down.