Charlie Munger’s Life Was About Way More Than Money
Charlie Munger’s Life Was About Way More Than Money
By Jason Zweig
It’s 1931, and a boy and girl, both about seven years old, are playing on a swing set on N. 41st St. in Omaha. A stray dog appears and, without warning, charges. The children try to fight the dog off. Somehow, the boy is unscathed, but the dog bites the girl.
She contracts rabies and, not long after, dies. The boy lives.
His name? Charles Thomas Munger.
Charlie Munger, the brilliant investing billionaire who died on Tuesday in a California hospital 34 days before his 100th birthday, told me that story when I interviewed him last month. I’d asked the vice chairman of Warren Buffett’s Berkshire Hathaway BRK.B -0.81%decrease; red down pointing triangle: What do you think of people who attribute their success solely to their own brilliance and hard work?
“I think that’s nonsense,” Munger snapped, then told his story, which I can’t recall him ever publicly recounting. “That damn dog wasn’t 3 inches from me,” he said. “All my life I’ve wondered: Why did it bite her instead of me? It was sheer luck that I lived and she died.”
He added: “The records of people and companies that are outliers are always a mix of a reasonable amount of intelligence, hard work and a lot of luck.”
I had the extraordinary good luck to get to know Charlie Munger in the past two decades. If you think his life was only about piling up money, think again. Few people have ever been wealthier, in all the senses of the word, than Munger was.
Those who know only a little about him think Munger was a paragon of how to pick stocks—which he was. But those who knew him well consider him a moral exemplar—someone who showed how to think clearly, deal fairly and live fully. He took nothing for granted.
More than almost anyone I’ve ever known, Munger also possessed what philosophers call epistemic humility: a profound sense of how little anyone can know and how important it is to open and change your mind.
Of course, many people regarded Munger as an arrogant curmudgeon, like a hybrid of Mr. Burns and Grampa Simpson from “The Simpsons,” who had been handed billions of dollars and one of the biggest microphones in the business world.
“In my whole life nobody has ever accused me of being humble,” Munger admitted in 1987. “Although humility is a trait I much admire, I don’t think I quite got my full share.”
Munger—who graduated magna cum laude from Harvard Law School without ever earning a college degree—knew perfectly well how smart he was. And it is an understatement to say he didn’t suffer fools gladly. In an interview with The Wall Street Journal in 2019, he used the phrase “massively stupid” at least seven times to describe other people and even entire professions.
So was he a cocky, cranky old man yelling at the clouds?
No. If there was one thing Munger knew, it was himself. As he told me in 2014, “Confucius said that real knowledge is knowing the extent of one’s ignorance…. Knowing what you don’t know is more useful than being brilliant.”
Munger (and Buffett) called this “the circle of competence” and often pointed out that the diameter of the circle doesn’t matter. What does matter is making sure you don’t fool yourself into thinking the diameter is wider than it is.
That’s why the two men had what they called their “too-hard pile,” a mental dustbin into which they threw every investment idea they felt they couldn’t understand. That’s why Munger said investors should wait years, or decades, for a good idea at a great price—and do nothing the rest of the time.
“Part of the reason I’ve been a little more successful than most people is I’m good at destroying my own best-loved ideas,” Munger told the Journal in 2019. “I knew early in life that that would be a useful knack and I’ve honed it all these years, so I’m pleased when I can destroy an idea that I’ve worked very hard on over a long period of time. And most people aren’t.”
His curiosity and mental agility kept Munger working—and brought people on pilgrimages to see him—until a few days before he died.
He may well have been the busiest near-centenarian in business history. Besides being Buffett’s right-hand man, Munger was chairman of legal publisher Daily Journal, director of retailing behemoth Costco Wholesale, an active investor in Chinese companies and a partner in one of Southern California’s biggest apartment developers. He also met several times a week with chief executives, government officials, university presidents, scientists, venture capitalists, fund managers, Silicon Valley entrepreneurs and others eager to tap his experience and expertise.
In his spare time Munger still indulged his hobby of designing architectural projects.
In late October, the day after participating in an all-day Costco board meeting on a Zoom call, Munger showed no signs of fatigue when he spoke with me for an hour. “You don’t call it work when you enjoy it,” he said. “That doesn’t mean I enjoy all my work—I don’t—but I enjoy most of it.”
Added Munger: “My days are not as full as when I was 40 or 50, but I haven’t slowed down a lot. I’ve just changed a little.”
The main change: Although he still traveled locally by car and whizzed around in a golf cart inspecting apartment buildings and construction sites, Munger seldom got on airplanes anymore.
Instead, people came to him—either on Zoom or in person.
Munger deliberately kept himself surrounded by people he liked. “Many of the richest people have holes inside of them that they’re always trying to fill,” Munger’s friend Peter Kaufman said last month. “But Charlie knows you can’t fill those holes with money. That’s why he spends so much time with friends and family.”
For his 100th birthday, Munger’s family was planning to host a black-tie evening party on New Year’s Eve—with more than 500 invited guests—at the California Club in downtown Los Angeles.
Immediately after New Year’s Day, Munger told me, he planned to get right back to work.
Typically over lunch, sometimes at dinner, Munger would answer questions and hold forth on various topics for hours. The food and flowers came from Costco. So did most of his clothes and his $75 wristwatch.
Most days, Munger got up between 6 a.m. and 8 a.m. and usually went to bed about 10 p.m., Oscar Estrada Gómez, his household manager, told me last month. Munger would watch “Seinfeld” reruns on TV for a while, then read himself to sleep with a book on science or history. He still consumed dozens of books a year.
“Sometimes he reads until 1 a.m.,” said Gómez. “If he’s obsessed with a book, it’s like when a dog is chewing on a bone and devouring it. He can read a book in two days.”
Munger did have less energy in the mornings than in the afternoons, said visitors who came to see him over lunch and dinner. Overall, though, they said he gave them extraordinary insights.
“He doesn’t just give you advice, but he thinks about it for a couple of hours a week for a few weeks and keeps fine-tuning it and iterating on it,” said John Conlin, former CEO of investment bank Robertson Stephens, now a money manager and regular attendee at Munger’s gatherings. “Not much feels better than having somebody do that for you.”
On the Costco board, said CEO Craig Jelinek, Munger “made sure that nothing could ever be perceived as harming the reputation and integrity of our business.” Munger also spent several years patiently prodding senior management to expand into China, one of his favorite global markets. The company made its debut in China in 2019 and will soon have seven locations there.
And what did high-tech entrepreneurs think they could learn from a 99-year-old notorious for ridiculing overpriced technology stocks?
“Duration,” said Patrick Collison, co-founder of digital-payments company Stripe and a frequent visitor at Munger’s gatherings. “Duration enables compounding. If we’re to be successful into the future, we will have to get really deft at thinking and investing on long-term horizons.”
Berkshire Hathaway, where Buffett has been chairman since 1965 and Munger vice chairman since 1978, is a model of adaptive survival, said Collison.
One lesson: the importance of what Munger called “a seamless web of deserved trust” in which a company deals fairly with employees, customers, competitors and other constituencies.
“If you’re structurally adversarial to those adjacent to you in the ecosystem, maybe you prosper for five years,” said Collison, “but not for 75 years!”
On Dec. 5, Stripe Press, a unit of Stripe, will publish a new, abridged edition of “Poor Charlie’s Almanack,” a compendium of speeches and writing by and about Munger. Existing editions have sold about 175,000 copies in English and 1.2 million copies in Chinese.
“It’s very rare for people to have sound judgment and to be untouched by the magnitude of emotions that surround them. You can only do that after years of self-cultivation,” said Li Lu, who runs Himalaya Capital, a global investment firm in Seattle with large holdings in Chinese stocks. “People in China really do regard Charlie as an example of modern Confucianism.”
Munger talked frequently about the importance of investing for decades into the future, a focus he maintained to the very end.
“You know how a lot of old people say, ‘At my age I don’t even buy green bananas’?” regular guest John Hawkins, co-founder of private-equity firm Generation Partners, said recently. “Well, Charlie is buying green bananas by the truckload. He’s making investments for the next 10, 20, 30 years. He has his foot on the gas and is not taking it off.”
Among those investments: Chinese companies through Himalaya Capital, where Munger was the largest outside individual investor, and garden apartments in California and other states through Afton Properties, run by his neighbor and friend Avi Mayer.
At his gatherings, Munger regaled guests with zingers and old jokes repurposed to ridicule what he regarded as some of the business world’s most foolish practices.
He mocked the marketing of short-term investment performance by telling a story about a man who walks into a fishing-tackle store and sees a bunch of gaudy, iridescent lures. “My God, they’re purple and green!” he says to the owner. “Do fish really take these lures?” The store owner answers, “Mister, I don’t sell to fish.”
One Friday, several friends arrived for lunch to find Munger seated at his dining-room table. Instead of getting a head start on the meal, he was poring over architectural plans and financial statements as he decided whether to develop a piece of property he owns. After lunch that day, he had a 4 p.m. business meeting, then a working dinner.
That was a year ago, one month shy of Munger’s 99th birthday.
Last month, I asked Munger how long he could keep going at a pace that might tire many people one-third his age.
“I haven’t the faintest idea,” he said. “When it stops working I’ll stop doing it.”
Then I asked what he might want for an epitaph of no more than 10 words.
His reply was immediate and full of epistemic humility: “I tried to be useful.”
Not “I was useful.” That would be for other people to judge. But “I tried.” That much he knew.
