RIP Charlie Munger
Charlie Munger left us this week, departing life at the venerable age of 99. I’ve seen it said that his death marks the end of an era, but I’m not so sure. The mark of a great man is how he make a path for other great mean to follow. Charlie seems to have done that, leaving behind a legacy that extends far beyond the balance sheets and financial strategies he navigated.
I never met the man, but I read everything he and Buffett published, staring when I was in the 6th grade. I read my first shareholder’s letter then and begged my Dad to buy a share of Berkshire Hathway, then trading at $2,800 per share. He scoffed and said “It’s too expensive.” At Munger’s passing the stock priced at $545,000 per share, a 17% annual return, or almost 20,000% total return over 37 years. Munger 1; Dad 0.
It seem strange to some that you would call a man you never met a mentor, but I felt like Charlie put the right things into the world that those of who cared to find the breadcrumbs could do so, and in doing so find a guide and a fellow traveler. Munger’s disciples have a funny way of sussing each other out in a crowd. When I went to Law School, I met a kid, Chris Conoscenti and he and I were sizing each other up when he called himself a “cheerful pessimist.” Eyebrows raised, I said “You read Munger?” He responded, eyebrows raised, with “You do, too?” It was like finding a lost member of the tribe. We were fast friends throughout school and he has gone on to have a brilliant career.
As someone who found mentorship in his profound ideas from afar, Munger's impact on me has been profound. Munger's journey to wealth wasn't just about numbers; it was a masterclass in strategic intellect and an unwavering commitment to refining decision-making skills. His approach wasn't about making more decisions; it was about making the right decisions. To do so he collected thousands of “mental models” — small memetic devices, almost shorthand, for decisioning.
When I first heard him speak about Mental Models I felt like I had overheard a secret that I wasn’t supposed to know. Previous to that I thought that you had to start from zero every time you made a decision. That’s exhausting, doesn’t produce the best decisions, and severely limits the number of decisions you can make. Munger showed me how to leverage the thoughts and experiences of others to produce better results through better decisions. Today, I have a notebook filled with mental models, thanks to Charlie.
Another revelation that I remember was deep into my thirties when I was listening to something Munger had said in a speech. The speech was about the global economy and how Berkshire’s consumer business would respond to a global recession, pretty dry stuff. In the speech, though, he said “It isn’t only capital that benefits from the long term effects of compounding, decision-making does, too.” It was a throwaway line, and I suspect no one else heard it. I had to sit down, my knees had gone weak. It changed something in me immediately.
Munger was a reader, too — a voracious one. He mentioned once that if he wanted to know something about a subject, he’d read 4 books about it. That struck me as the most simple piece of genius advice I’d ever heard. For the next 20 years, I read 100 books every year, guided solely by what I wanted to know more about. Now when I enter a conversation, I draw on the wisdom of over 2000 authors to inform my thinking. The other parties to those conversations very rarely bring that breadth to the discussion. They haven’t found Munger yet.
Just last week I realized I didn’t know a thing about Julius Caesar’s final battle over Pompey the Great, at Pharsalus. I ordered 2 books about it, have finished them and a thought occurred to me. I bet for the rest of my life I will be the most knowledgeable person I meet about the Battle of Pharsalus. OK, maybe that isn’t worth much in the long run to most people, but in reading the books, I took two new mental models into my notebook, as well. Without Munger I would never have developed either habit.
As we reflect on Munger's life, let's not merely dissect his principles but celebrate the essence of the man. His journey is a testament to the American spirit—of intellect, perseverance, and an unyielding commitment to continuous improvement. In our hearts, we hold not just the financial principles he championed but the profound impact he had on our own thinking and decision-making.
This tribute seeks to capture the spirit of a man who went beyond definitions and theories. It's about delving deep into the concepts he lived by, understanding the philosophy that shaped his decisions, and embracing those principles in our own financial odyssey.