Charles T. Munger, Much More Than Warren Buffett’s No. 2, Dies at 99

Charles T. Munger, who gave up an established career as a lawyer to become Warren E. Buffett’s partner and maxim-mongering alter ego as he turned a struggling New England textile company into the spectacularly successful investment firm Berkshire Hathaway, died Tuesday in Santa Barbara , California. He was 99.

His death at a hospital was announced by Berkshire Hathaway. He had a home in Los Angeles.

Although he was in the shadow of Buffett, who relished the spotlight, Mr. Munger, a billionaire himself – Forbes listed his fortune this year at $2.6 billion – had far more influence over Berkshire than his title as vice chairman suggests let.

Mr. Buffett has described him as the founder of Berkshire Hathaway’s investment approach. “The plan he gave me was simple: Forget what you know about buying fair companies at wonderful prices; Instead, buy wonderful companies at fair prices,” Buffett once wrote in an annual report.

This investment strategy was a revelation for Mr. Buffett, who made his name in the 1950s by buying troubled companies at steep discounts. (He called them “cigar butts” because, he said, investing in them was like “picking up a discarded cigar butt that still had a puff left in it.”)

Mr. Munger advised Mr. Buffett that if he wanted to build a large, sustainable company that would outperform other investors, he should buy solid, brand-name companies. “He was the architect and I was the general contractor,” Buffett said of their relationship.

The partnership, which spanned more than 50 years, created one of the most successful and largest conglomerates in history. Omaha-based Berkshire owns insurance giant Geico and Burlington Northern Santa Fe railroad, among others, and holds shares in Coca-Cola, American Express, IBM, Wells Fargo and other corporate heavyweights. In 2022, around 372,000 people were employed.

Mr. Munger, a learned man who peppered his conversations with allusions to Cicero, Albert Einstein, Mark Twain and Confucius, was widely known for his witty maxims of common sense, so much so that they called them Mungerisms and collected them in books including “ Poor “Charlie’s Almanack: The Wit and Wisdom of Charles T. Munger” (2005).

“Envy is a really stupid sin,” says one, “because it’s the only one you could never enjoy.” Another: “The ethos of not deluding yourself is one of the best you can have.” It’s powerful because it’s so rare.”

Mr. Buffett and Mr. Munger spoke on the phone for hours every day, Mr. Buffett from his office in Omaha (their shared hometown) and Mr. Munger from Los Angeles.

“We’ve never had an argument,” Buffett said. Mr. Buffett repeated one of Mr. Munger’s favorite lines, saying that if they disagreed, Mr. Munger would say, “Warren, think about it and you’ll agree with me because you’re smart and I’m right.”

Mr. Buffett and Mr. Munger were the faces of Berkshire’s annual meeting in Omaha, which became known as the Woodstock of capitalism. They appeared in front of tens of thousands of enthusiastic Berkshire shareholders, answering questions and sharing their investment knowledge for up to six hours.

“The problem with all of these statements is that people start to think they know something,” Mr. Munger told the audience in 2015. “It’s much better to think you’re ignorant.” He added: “If people weren’t so often wrong, we wouldn’t be so rich.”

Many of these listeners had become enormously rich through investments with Mr. Buffett and Mr. Munger himself. A $1,000 investment in Berkshire in 1964 is worth more than $10 million today.

Mr. Munger was often viewed as Berkshire Hathaway’s moral compass, advising Mr. Buffett on both personnel matters and investments. His hiring policy: “Trust comes first, ability comes second.”

Charles Thomas Munger was born in Omaha on January 1, 1924, the son of Alfred Case Munger, an attorney, and Florence (Russell) Munger. As a boy, he worked Saturdays at a grocery store that was then owned by Mr. Buffett’s grandfather. (Mr. Buffett worked there himself for a time, but the two didn’t meet until much later.) At 17, Charles went to the University of Michigan to study mathematics, but in his second year, after the attack on Pearl Harbor, He enlisted in the Army Air Corps.

He was promoted to lieutenant and sent to the California Institute of Technology in Pasadena to train as a meteorologist. In Pasadena he met Nancy Huggins, the daughter of a local shoe store owner, and they married, he at 21 and she at 19. They had three children.

He was soon transferred to Nome, Alaska, where he developed a talent that would serve him well.

“Playing poker in the Army and as a young lawyer honed my business skills,” Mr. Munger told Janet Lowe in her 2000 book “Damn Right!” Behind the Scenes with Berkshire Hathaway Billionaire Charlie Munger.”

“What you have to learn is to get out early when the odds are stacked against you,” he said, “or if you have a big advantage, bet big on it because you don’t often have a big advantage, so take it when you do it is present.” comes.

Even before his discharge from the Army in 1946, Mr. Munger, who once said he had a black belt in chutzpah, applied to Harvard Law School, from which his father had graduated, even though he had volatile work habits and no bachelor’s degree -had a degree. He was accepted only after the intervention of a fellow Nebraskan, Roscoe Pound, a retired dean of the school and a family friend.

After graduating with honors, Mr. Munger returned to California and began practicing law. Eventually he went into business for himself and founded the law firm Munger, Tolles & Olson. But his life began to fall apart: he and his wife divorced; their only son, Teddy, died of leukemia at age 9; and he suffered financial setbacks.

With Mr. Munger practically broke, his daughter Molly complained to him about his broken-down yellow Pontiac. “Dad, this car is just terrible, a mess,” she said. “Why are you driving it?” As Ms. Lowe’s biography puts it, he replied, “To deter gold diggers.”

Looking to rebuild and using his preternatural math skills (“I always took math classes because I could get A’s without working,” he said), he began investing in stocks, businesses and real estate on the side.

“I quickly realized that I would rather be one of our rich and interesting clients than be their lawyer,” he said.

His investments brought him his first million dollars.

Mr. Munger married Nancy Barry Borthwick in 1956 and met Mr. Buffett by chance three years later. Mr. Munger had been flying back to Omaha to settle his recently deceased father’s affairs when he was invited to lunch at the local Omaha Club. There he was introduced to Mr. Buffett by a mutual friend.

Later that week, Mr. Munger attended a dinner party to which Mr. Buffett was also invited. They got along well and spent the evening talking. Mr. Buffett later recalled: “He was rolling on the floor and laughing at his own jokes, and I thought, ‘That’s my type.’ I do the same.”

Days later, she and her wives went to Johnny’s Café for lunch.

As quoted in “The Snowball,” Alice Schroeder’s 2008 biography of Mr. Buffett, Nancy Munger once asked her husband, “Why are you paying him so much attention?” Mr. Munger replied, “You don’t understand. This is no ordinary person.”

The men soon spoke on the phone almost every day and talked about investment strategies. “Warren obviously had a better business model than I did,” Mr. Munger said, citing hourly billing for his legal services. “He kept pointing out to me that I had an insane way of making a living and that his was better and that I should do what he did.”

Mr. Munger was convinced. “Like Warren, I had a great passion for becoming rich,” Mr. Munger was quoted as saying in Roger Lowenstein’s book “Buffett: The Making of an American Capitalist” (1995). “Not because I wanted Ferraris – I wanted independence. I really wanted it. I thought it was disgraceful to have to send invoices to other people.”

Mr. Munger began investing alongside Mr. Buffett in companies such as Westco Financial and See’s Candies before officially joining him as vice chairman. During the first year, he said, “I kept one toe in the law firm in case my capitalist career failed.”

Together, they built Berkshire into a $500 billion-plus juggernaut whose original stocks posted average annual gains of 21.6 percent between 1965 and 2014, more than double the 9.9 percent gain of the Standard & Poor’s 500. (The company got its name when, early on, Mr. Buffett took over a fading textile manufacturer in Massachusetts called Berkshire Hathaway.)

The money Mr. Munger made far exceeded his greatest expectations, he said, but it could have been more. He said his biggest mistakes weren’t bad investments, but investments that Berkshire missed.

He and Buffett “were offered a stake in McDonald’s early on” and decided against it, he said.

“We should have bought a big block of young Wal-Mart products,” he added. “That was billions that we should have earned. We avoided the pharmaceutical industry completely and it was the easiest industry to make a lot of money out of any industry and we never made a dime from it.”

Mr. Munger used his many nickels on an unusual philanthropic passion: architecture. He donated hundreds of millions of dollars to university architecture projects, including $65 million to the Kavli Institute for Theoretical Physics at the University of California, Santa Barbara.

At least one of his projects caused controversy: his design for a windowless dorm building on the Santa Barbara campus, for which he contributed $200 million, was criticized by some architects and students. He defended it as efficient and effective.

Through his Giving Pledge, an organization he founded with Bill and Melinda Gates to persuade billionaires to give away at least half of their wealth, Buffett remained a vocal supporter of philanthropy. But Mr. Munger was conspicuously not on the list. He said it wasn’t that he didn’t want to sign the pledge. He said his wife Nancy, who died in 2010 at age 86, had wanted her half of the estate to pass to their children, “and I more than did that.” He added: “I felt that it would be hypocritical to be a big pledger. I have already violated the overall idea.”

Mr. Munger is survived by two daughters from his first marriage, Wendy and Molly Munger; a daughter from his second marriage, Emilie Munger Ogden; three sons from this marriage, Charles Jr., Barry and Philip; two stepsons, William and David Borthwick; 15 grandchildren; and seven great-grandchildren.

A treasured retreat for him was a wilderness area in northern Minnesota on Star Island in Cass Lake, where his grandparents began summer vacationing in 1932 and which became the extended family home. In addition to Los Angeles, he had a home in Hawaii.

Under Messrs. Buffett and Munger, Berkshire invested heavily in newspapers, including The Washington Post, The Buffalo News and The Omaha World-Herald. Mr. Munger himself was chairman of the Daily Journal Corporation, a newspaper publisher, from 1977 to 2022.

He remained active at Berkshire Hathaway into his 90s, while also serving for decades as chairman of Good Samaritan Hospital in Los Angeles, to which he donated generously. As a Republican, he also spoke out strongly in favor of Planned Parenthood.

Perhaps in another life Mr. Munger, with all his drive and self-confidence, would have been the head of a huge corporation. But he had no regrets about making his fortune in Mr. Buffett’s shadow.

“I didn’t mind playing second fiddle to Warren at all,” he said in an interview for this obituary. “I’m usually very dominant wherever I go, but if someone else is better, I’m willing to play second fiddle. It’s just that I’ve rarely been in this position, except with Warren. But I didn’t mind at all.”

Alex Traub contributed reporting.