By now, many, if not most, investors are aware of Charlie Munger, longtime business partner of Warren Buffett, who credited him with being the "architect" of Berkshire Hathaway (with Buffett considering himself merely the general contractor). Munger passed away in November 2023 at the age of 99, leaving an enormously impressive legacy, not just via Berkshire Hathaway, which has grown to be one of America's biggest companies, but also via countless brilliant things he said.
Along the way, Munger has offered us lessons he has learned through his life. Here are some of Munger's stories and what we can draw from them.
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Lessons from Charlie Munger's life
Keep persevering
Many might have looked at billionaire Munger and envied his life. But that life had more than its fair share of tragedy. He lost a son, age 9, to leukemia, and at one point was divorced and, according to some reports, broke. Being dealt such tough cards could derail some people's lives, but Munger persevered. He has said:
Self-pity is always counterproductive. It's the wrong way to think. And when you avoid it, you get a great advantage over everybody else, or almost everybody else, because self-pity is a standard response. And you can train yourself out of it.
On a more positive note, the benefits of sticking to things can be quite large. Munger recommended being faithful in meeting your obligations, arguing:
Systematically you get ahead, but not necessarily in fast spurts. Nevertheless, you build discipline by preparing for fast spurts. Slug it out one inch at a time, day by day. At the end of the day -- if you live long enough -- most people get what they deserve.
In our own lives, we might not face the dark times that Munger did, but we certainly might face sharp market downturns or an imploded stock or two. These kinds of things can throw us off our game and might even have us giving up on investing. Think of Charlie Munger, instead, and persevere. Sticking to a good plan even in the face of adversity is how you can ultimately succeed.
Being second fiddle is OK
Here's a thought that might be counterintuitive to many: It's OK to be second fiddle. We're generally used to competing in order to be the best, and we tend to cheer most loudly for those who win gold medals. But it's not so bad to be second fiddle or to be one or more spots from the top, as Munger has shown. He lived much of his life overshadowed to some degree by Buffett -- but he was still respected, heard... and very rich.
Think about companies. In many industries, there are two companies performing well at the top while rewarding shareholders, and investors can do well investing in either. Think, for example, of Coca-Cola and PepsiCo. Think of Boeing and Europe's Airbus -- the two primary commercial airplane manufacturers. (Boeing, of course, is facing some serious challenges these days.) In the financial world, there's Visa and Mastercard. More than two companies can do well in lots of industries, as well. If you're bullish on semiconductors, for example, there are many semiconductor stocks that have done well and that still have promising futures.
If you've been spending a lot of your life competing, stop and ask yourself whether that has been productive or pointless. If you're in a position that offers what you need or want most, such as respect, recognition, and/or solid compensation, perhaps you might relax a bit.
Keep reading and learning
A key thing that every Charlie Munger aficionado knows is that he was a huge advocate of reading deeply and broadly -- and of continually learning. He has said many things about this:
- "In my whole life, I have known no wise people (over a broad subject matter area) who didn't read all the time – none, zero."
- "I don't think you can get to be a really good investor over a broad range without doing a massive amount of reading. I don't think any one book will do it for you."
- "Spend each day trying to be a little wiser than you were when you woke up."
Many people think of Munger as someone with an extraordinary mind; he clearly became that way in large part via reading and learning. That's good news, because we can read and learn, too.
It's worth spending more time just learning about Munger himself, as he has shared many more pearls of wisdom. Two solid sources of information on him are Poor Charlie's Almanack: The Essential Wit and Wisdom of Charles T. Munger, edited by Peter D. Kaufman, and Janet Lowe's biography of him, Damn Right: Behind the Scenes with Berkshire Hathaway Billionaire Charlie Munger.
