Born on January 1, 1924, Charles T. Munger, became an American Investor and Philanthropist. Currently, Mr Munger is Vice Chairman of Berkshire Hathaway and Warren Buffet’s partner (according to Warren Buffet). Before this position, Mr Munger had served as Chairperson in Wesco Financial Corporation for 27 years until 2011. He also remains a director of Costo Wholesale Corporation and Chairman of the Los Angeles-based Daily Journal Corporation, in California.
Books and other resources
- Damn Right!: Behind the Scenes with Berkshire Hathaway Billionaire Charlie Munger by Janet Love
- Charlie Munger: The Complete Investor by Tren Griffin
- Poor Charlie’s Almanack: The Wit and Wisdom of Charles T. Munger by Peter D. Kaufman
The Psychology of Human Misjudgement (Lecture)
Early Life of Charlie Munger
Charles Thomas Munger was born in Omaha, Nebraska to a lawyer (Alfred C. Munger). It is here that he worked at one of Buffet’s family stores as a teenager. He later joined the University of Michigan and never reported moving back to Nebraska except when visiting. He cut short his course in mathematics to join the U.S Army Air Corps where he quickly rose to become Second Lieutenant. He performed so well in the Army General Classification Test that he was ordered to study meteorology at Caltech. He ended up making this town his home to date.
He took other advanced courses before applying to Harvard Law School having not completed his undergraduate. He eventually got admission to Harvard where he became a member of Harvard Legal Aid Bureau. Here, Charlie developed a skill in card playing. The game taught him many tricks to use in life’s decisions. For example, he learnt to make early calculations like folding early when the odds are against him especially if not having a big edge. According to him, all you do is wait and grasp for an opportunity when one is present.
Investment Journey
After moving to California and joining a local Law firm, he found great interest in real estate. He later gave up on law and focused on management of investments where he partnered with Otis Booth in real estate development. It is while in his early years that he also partnered with Jack Wheeler to form the investment firm with a seat on the Pacific Coast Stock Exchange. Huge losses of the early 1970s led to the crumbling down of the firms. He had been making up to 20% annual returns in a successful spanning 12 years until 1975.
Wesco Financial Corporation was first a savings and loan association, before being owned fully by Berkshire Hathaway. It has a concentrated equity portfolio of at least US $ 1.5 billion and based in Pasadena California. This has been his hometown ever since; and is where he held shareholder’s meetings annually.
Personal Life
At Caltech, Munger met and married Nancy Huggins, who hails from Pasadena. Huggins was a roommate to Munger’s sister back in College and Scripps. They got three children; Wendy who is now a trustee of Stanford University after working as a corporate lawyer, Molly, a civil rights attorney, and Teddy who died aged 9 of leukemia.
Later, he remarried Nancy Barry and fathered four children. They are; Charles Munger Junior, Emilie Ogden, Barry A, and Phillip R. This new wife died in 2010 but Munger has not remarried.
In his spare time, Munger enjoys architecture. He has designed many buildings including the house he lives in today
Wealth
According to the latest Forbes listing, Charlie Munger has an estimated net worth of $1.74 billion as of February 2018.
He is also a major benefactor of the University of Michigan where he once gave $3 million for lighting improvements in 2007. In 2011, he contributed a staggering $20 million of the $39 cost for renovations to the Lawyers Club housing complex covering half of the expenses. He donated 10 of his class A stock shares worth $2.88 million cumulatively to the institution before his largest gift in history, which was a US $110 million for a post-modern residence to foster a community of scholars. Stanford University has also had their fair share of Charles and the late Nancy B. Munger. Nancy (wife) and Wendy (from Charles first family) were alumni of the university and served in the board of trustees. There are many gifts from shares to regular funds for constructions such as the Green Library and housing complexes.
Apart from Stanford University and University of Michigan, others include; the Marlborough School in Los Angeles, Pasadena Polytechnic School, the LA YMCA, Harvard Westlake School, the Kavli Institute for Theoretical Physics, and University of California’s Santa Barbara. He has, however, not signed The Giving Pledge started by his partner Warren Buffet and Bill Gates yet.
Philosophy
In his book Poor Charlies Almanac, Munger introduces the concept of elementary, worldly wisdom in relation to business and finance. It encompasses a set of mental models framed as a latticework to help solve critical business-related challenges. Both Munger and Buffet are inspiration figures in the newer book Seeking Wisdom. The idea is not to restrict readers to business ideas but a wider perspective of life in general. They also focus on the role of ethics and honesty as approaches to success in any venture. Munger insists, for example, that ethical standards are an integral part of philosophy. Successful business models, should, therefore, be based on high standards of ethics as opposed to trickery. He insists that trickery will never be a long-term pillar to success in business.
He introduces the lollapalooza effect to refer to multiple biases, or mental tendencies, which act in relation to each other in the same direction. This is the model for extreme confusion and increased likelihood of acting irrationally. Charlie remains a strong negative opinion towards cryptocurrencies and refers to Bitcoin as poison.