Buffett companion Charlie Munger dies at the age of 99
Charlie Munger, the closest confidant and companion of investment legend Warren Buffett, has died at the age of 99. Buffett emphasized in a statement that without Munger's inspiration and wisdom, their investment holding Berkshire Hathaway would never have become so big. Munger died on Tuesday morning in a hospital in California, it was reported without further details. He would have been 100 years old on January 1.
Munger was active at Berkshire Hathaway for decades together with Buffett (93). He was vice chairman of the board and one of the largest shareholders. This also made him a billionaire. Berkshire Hathaway owns the insurer Geico, the railroad company BNSF and the battery manufacturer Duracell, among others. Berkshire's flair for good business has ensured that its investments in various companies have significantly outperformed the stock market on average over the years. An investment of 1,000 dollars in Berkshire Hathaway in the mid-1960s is worth more than 10 million dollars today.
Investment philosophy
Munger and Buffett both grew up in Omaha in the US state of Nebraska. Munger even worked in Buffett's grandfather's grocery store when he was young - but the two men only met for the first time in 1959. Buffett later said that Munger had changed his approach as an investor.
Originally, he had only been on the lookout for bargains - "decent companies at a wonderful price", as Buffett put it. Munger convinced him that wonderful companies at a fair price were a much better deal. Buffett emphasized that this new perspective had made him much richer than he would ever have been as a bargain hunter.
The purchase of the textile company Berkshire Hathaway, which ultimately became the world's most famous investment holding company, was still a classic Buffett deal: shaky and cheap. One of the first major deals based on the new philosophy was the purchase of the American chocolate chain See's Candies in the early 1970s. Berkshire paid three times more than the company was worth - but See's generated more than two billion dollars in profits over the years, making it a lucrative investment.
Humorous streak
Munger was already a successful investor in his own right before he officially joined Berkshire Hathaway. He is regarded as the driving force behind early investments in technology companies such as the Chinese electric car and battery specialist BYD. Berkshire also stocked up heavily on Apple shares - while the price already seemed too high to many investors. But spurred on by the success of the iPhone, the price rose even higher.
While Buffett often comes across as the "Oracle of Omaha", investors often liked Munger's humorous streak. When the Internet bubble burst in 2000, Buffett gave a long, serious answer about snowball systems at the 2000 shareholders' meeting when asked about the consequences of speculation. Munger remarked succinctly and dryly: "If you mix raisins with excrement, it remains excrement." Munger took a similar view of cryptocurrencies, which he campaigned for to be banned this year because they were like gambling.
Until shortly before his death, Munger hosted his Friday lunches, which were attended by video game entrepreneur Bobby Kotick and the founders of the payment company Stripe, Patrick and John Collison, for example. His favorite pastime was "figuring out what works and what doesn't - and why," he told the Wall Street Journal four years ago.
Despite Munger's passing, his influence on Berkshire Hathaway's investment strategy, spearheaded by Warren Buffett, is undeniable. Munger's emphasis on investing in 'wonderful companies at a fair price' significantly shifted Buffett's approach, leading to substantial financial gains.
In the realm of stock exchanges, Munger, as a board vice chairman and large shareholder of Berkshire Hathaway, played a crucial role in the company's foray into tech companies like BYD and Apple, which significantly outperformed market averages.
Source: www.dpa.com
