(News Bulletin 247) – The famous businessman who helped the Oracle of Omaha transform Berkshire Hathaway into a successful investment company died overnight from Tuesday to Wednesday. A lawyer by training, he allowed Warren Buffett to broaden his investment principles and keep his feet on the ground.

“We think so much alike that it’s scary.” Warren Buffett summed up very well in 1978 the osmosis that reigned between his great partner, Charlie Munger, and himself. In sixty years of collaboration, the two men have never experienced the slightest argument, according to Buffett.

So they will never have one because Charlie Munger died on the night of Tuesday to Wednesday, at the age of 99, in a Californian hospital. Berkshire Hathaway, Warren Buffet’s investment company, announced this in a terse press release.

“Berkshire Hathaway could not have reached its current status without the inspiration, wisdom and participation of Charlie,” the billionaire summarily declared in this press release in tribute to his associate and friend.

Like Warren Buffet, Charlie Munger was from Omaha where he worked on weekends in Buffett’s grandfather’s grocery store when he was young. Even if the future partners did not meet at that time, it would wait until 1959.

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Remarkable performance at Berkshire Hathaway

A lawyer by training and brilliant in mathematics – he claimed to be able to get an A at school without the slightest effort – Charlie Munger began investing in the 1960s via the hedge fund Wheeler, Munger & Co, unhappy with the financial prospects of his career. “Like Warren, I had considerable passion for becoming rich,” he said as part of a book published in 1995, according to Bloomberg. “Not because I wanted Ferraris, but because I wanted independence. I wanted it desperately,” he added.

Also in the 1960s, Charlie Munger began his association with Warren Buffet but did not officially join Berkshire Hathaway until 1978, where he became vice-president.

The tandem will then generate an enviable performance. From 1965 to 2022, Berkshire Hathaway saw its market value appreciate by 19.8% per year, almost twice the performance of the S&P 500 (+9.9%).

Warren Buffett notably explained that Charlie Munger broadened his way of thinking about investing. His partner convinced him to bet on good quality but undervalued companies where the Oracle of Omaha tended to target companies in difficulty in the hope of turning them around and generating significant capital gains.

Buy quality companies

“He took me away from the idea of ​​buying very mediocre companies at very low prices, knowing that there was a small profit to be made from them, and pushed me to look for truly wonderful companies that we could buy at reasonable prices,” Warren Buffett explained to CNBC in May 2016.

This principle led the two men to buy the candy maker See’s Candies, which currently generates $2 billion in profits, according to Business Insider, for Berkshire Hathaway. This even though the acquisition had only cost $25 million.

According to Bloomberg, it was the success of this operation that led Warren Buffett to invest in Coca Cola in the 1980s, a stake that is currently worth more than $20 billion in Berkshire Hathaway’s financial statements.

“The Abominable Snowman”

Acerbic and outspoken, Charlie Munger often tended to temper Warren Buffett’s enthusiasm. To the point that the latter sometimes nicknamed him “the abominable snowman”.

This is because Charlie Munger did not hesitate to display his disagreements with Warren Buffett, which the latter greatly appreciated, explaining that his collaborator brought him back to earth. Too many general managers surround themselves with a “band of sycophants” who are reluctant to question their conclusions and their prejudices, the businessman said in 2002.

And like his partner, Charlie Munger did not fail to provide certain investment maxims.

“I have a friend who says the first rule of fishing is to fish where the fish are. The second rule of fishing is to never forget the first rule. We learned to fish where the fish are fish,” he declared in 2017.

Quite far from that of his sidekick, Charlie Munger’s fortune is estimated at 2.6 billion dollars. But it is only the remainder of his wealth, most of which he had given to charitable works during his lifetime.