Why was Charlie Munger so famous?

Nick Sundich Nick Sundich, November 29, 2023

In light of his recent passing, you might be wondering why was Charlie Munger so famous? If you’re reading this website, you’re probably interested in stocks – so you know that it is because he was such a great investor. Although he was arguably overshadowed by his business partner Warren Buffett for much of his career, it was not unreasonable to describe Munger as Buffett’s ‘right hand man’. Indeed, Buffett said in a statement overnight,’ Berkshire Hathaway could not have been built to its present status without Charlie’s inspiration, wisdom and participation’.

 

Why was Charlie Munger so famous?

In a nutshell, because he was a legend world of investing. He is famous for his partnership with Warren Buffett and their successful tenure at Berkshire Hathaway. However, there’s more to him than just being an investor. Born on January 1, 1924, in Omaha, Nebraska, Munger grew up during the Great Depression. This experience shaped his way of thinking and approach towards life. He graduated from Harvard Law School in 1948, where he met Warren Buffett for the first time.

It was this friendship that led to one of the most successful investing partnerships in history. Munger joined Berkshire Hathaway as Vice Chairman in 1978 and has been instrumental in helping the company grow into a multinational conglomerate.

 

But what makes Munger stand out among other investors?

The Berkshire Hathaway bosses’ approach towards investing is deeply influenced by his multidisciplinary thinking. The pair believes in not only understanding the principles of finance, but also incorporating insights from various fields such as psychology, biology and economics. Munger’s famous quote “I have nothing to add” highlights his belief in constantly learning and improving oneself. He is a voracious reader, often reading multiple books in a day.

Apart from his investment success, Munger was also known for his wit and wisdom. His speeches at the annual meetings of Berkshire Hathaway were always eagerly awaited by investors worldwide, where he shared his unconventional insights on investing and life. It’s not going to be the same next year without him. In addition to being an investor, Munger was also a philanthropist and has donated millions of dollars towards education and healthcare causes.

 

His most famous quotes

1. ‘I think that one should recognize reality even when one doesn’t like it; indeed, especially when one doesn’t like it’.

Munger emphasised the importance of being realistic and facing facts in the world of stock investing. This quote reminds us that while it may be tempting to ignore negative news or trends, it is essential to acknowledge and address them in order to make informed investment decisions.

 

2. ‘The big money is not in the buying and selling… but in the waiting’.

Munger believed that patience is a key virtue when it comes to stock investing. He advises against constantly buying and selling stocks and instead encourages investors to wait for the right opportunities.

 

3. ‘The best thing a human being can do is to help another human being know more’.

Munger places great value on knowledge and continuous learning. This quote highlights the importance of educating oneself about stock investing and sharing that knowledge with others.

 

4. ‘If you keep learning all the time, you have a huge advantage.’

Similar to his previous quote, Munger stresses the importance of continuous learning and how it can give investors an edge in the stock market. He believes that those who are constantly learning have a better chance at making successful investment decisions.

 

5. “It’s not supposed to be easy. Anyone who finds it easy is stupid.”

Munger acknowledges that stock investing is not an easy task and that it requires hard work, research and patience. This quote serves as a reminder to not fall for get-rich-quick schemes or believe that success in the stock market comes without effort.

 

6. “To the man with only a hammer, every problem looks like a nail.”

This quote highlights Munger’s belief in having a diverse set of tools and strategies when it comes to stock investing. He cautions against relying on a single approach and encourages investors to be open-minded and adaptable.

 

7. ‘It’s waiting that helps you as an investor, and a lot of people just can’t stand to wait.’

Munger emphasises the importance of patience once again in this quote. He believes that successful investors are those who can endure the waiting period and not give in to impulsive or emotional decisions.

 

8. ‘I constantly see people rise in life who are not the smartest, sometimes not even the most diligent, but they are learning machines.’

This quote highlights Munger’s belief that intelligence and hard work alone do not guarantee success in stock investing. Rather, it is those who are dedicated to continuous learning that will succeed.

 

9. ‘I think that every time you see the word EBITDA, you should substitute the words bullshit earnings’.

This quote would anger plenty of CEOs. Charlie Munger called EBITDA “bullshit earnings” because he believed that it is an unreliable measure of a company’s true profitability. He argues that by excluding important expenses like interest, taxes, and depreciation, EBITDA does not accurately reflect a company’s cash flow or its ability to generate sustainable earnings. And yes, he thinks these are expenses even if they are not necessarily cash outflows. As he notes, it can be easily manipulated by companies to make their financial performance appear better than it actually is.

 

Conclusion

Overall, Charlie Munger’s success can be attributed to his exceptional analytical skills, multidisciplinary approach, continuous learning mindset, and his ability to think beyond traditional investing methods. He truly is a legendary investor who has left a lasting impact on the world of finance.

So, it’s no surprise that he has long been considered a role model by many aspiring investors and business leaders, and he will inevitably be for decades to come. Munger’s life and achievements serve as an inspiration for anyone looking to achieve success through hard work, determination and constantly expanding one’s knowledge base.

His legacy will continue to live on and inspire future generations to come. So, next time you think of legendary investors, don’t forget to include Charlie Munger in the list. As he once said, “If you’re not where you want to be, it’s because you haven’t learned enough.” Let us all strive to follow his footsteps and always keep learning. May he rest in peace.

 

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