Charlie Munger passed last week on Tuesday at 99 years old —11 weeks shy of his 100th birthday. If you did not know who Munger was, he was Warren Buffet’s right-hand guy for 60 years. Munger helped shape Warren as a person/investor and helped get Berkshire Hathaway to where it is today with about $1 Trillion in assets and currently sitting on $160 Billion in cash.
I always loved to listen to Munger and Buffet in interviews and always loved to learn how they approached investing. With a long track record and everyone able to watch them invest in companies over the past 60 years you really got to see the good and bad. Obviously, there was more good than bad but that did not mean every investment was a winner. Not everyone agreed with Munger and Buffet’s thoughts and advice on everything. Buffet and Munger did not always agree on everything either.
I was curious how Munger made his first money or heck his first million. Back in the 60’s could you imagine trying to make your first million, most of us are trying to do that in 2023. Munger started his career as a real estate attorney in the 50s when he moved to California. In 1961 he had an opportunity to partner with a developer in a real estate deal. That deal made him 400% on his money years later AKA first million and according to Munger, he made somewhere around $3 to $4MM in the 60’s combined on 5 real estate deals. Munger eventually in 1978 was on the board of Berkshire and when he passed he had a net worth of around $3 billion.
Here are some of Munger’s investing philosophies:
- Spend less than you earn.
- Invest Shrewdly.
- Avoid toxic people and activities.
- Keep learning all your life.
- Honesty and integrity.
- Have patience and discipline.
- Learn from your mistakes.
- Avoid mistakes.
- Read, read, read.
When it came to investing or making BIG returns or big money on a deal, he has some interesting advice. You must learn to be patient, with patience comes maybe 1,2,4 deals in your life that can change your financial picture. “The big money is not from the buying and selling, it is from the patience”. “ An idiot can diversify a portfolio or a computer. But the whole trick of the game is to have a few times when you know something is better than average and invest only where you have that extra knowledge”.
RIP Charlie Munger and if you wonder how Berkshire Hathaway stock has done over the past 60 years.
