Чарли Мънгър: Последните години и уроците на милиардера

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Billionaire investor Charlie Munger, a highly respected figure in the U.S. business world known for his wisdom and sharp wit, played a pivotal role in building Berkshire Hathaway into a multi-trillion dollar company, Profit.bg reports. Munger’s passing marks the loss of a significant voice in the investment community, particularly as his insights continued to shape financial thinking.

He died two years ago, just weeks before he would have turned 100.

During his lifetime, Munger owned a home with stunning ocean views in Montecito, California. The sprawling estate, nicknamed “Mungerville” by locals, was entirely designed by Munger himself. He had shared with friends his intention to spend his final years there.

However, Munger ultimately chose to remain in his Los Angeles home, a residence that notably lacked air conditioning. During a heatwave three years prior to his death, friends provided fans to cool his library, according to The Wall Street Journal.

Munger wasn’t concerned with luxuries. He preferred to be close to the people he valued and the projects that engaged him. Instead of a quiet life by the sea, he spent his remaining years pursuing bold investments, forging unconventional friendships, and embracing new challenges, the WSJ reported, citing conversations with those close to him about a relatively unknown final chapter.

“[Buffett and I] have been smart enough to watch our friends who got rich build these really fancy houses,” Munger once said. “And I would say in almost every case, they make the man less happy, not more happy.”

“A ‘plain house’ is useful,” Munger added, noting that a larger home could facilitate entertaining more people – but that was its primary benefit. “It’s a very expensive thing and doesn’t do you much good.”

Another drawback of owning a mega-mansion, he explained, was the potential to spoil his children by encouraging them to “live high on the hog.” Munger had nine children from two marriages, including two stepchildren and a son who died of leukemia at age nine.

“[Buffett and I] considered bigger and better houses,” Munger said. “I had a huge number of children, so it was even justified. And yet I decided not to live a life where I looked like the Duke of Westchester or something. And I avoided it. I did it deliberately… I didn’t think it would be good for the children.”

In the year leading up to his death, Munger generated over $50 million from a bet in a sector he had previously avoided for 60 years. He ramped up activity in real estate, collaborating with a young neighbor to make substantial, long-term investments – an unusual move for someone of his age.

He faced health challenges and contemplated the future.

“Even a week or two before he died, he was asking questions like, ‘Is Moore’s Law applying in the age of artificial intelligence?’” his friend Jamie Montgomery recalled, as quoted by The Wall Street Journal.

Friends and family say Munger’s dynamic final period offers valuable lessons for investors – and a model for aging with dignity, composure, and purpose.

His stepson, Hal Bortwick, said:

His mind was working right up until the end. He never stopped learning.

Munger graduated from Harvard Law School and co-founded the law firm Munger, Tolles & Olson in Los Angeles. He left practice in 1962 to dedicate himself to investing. He later closed most of his investment partnerships and became vice chairman of Berkshire Hathaway in 1978.

He became Warren Buffett’s closest advisor and sounding board, pushing him to expand beyond “cheap stock” investing and acquire high-quality companies.

“Charlie and I are interchangeable in making business decisions,” Buffett said in 1982.

In the last decade of his life, Munger became less involved with Berkshire Hathaway, although his stake in the company was valued at $2.2 billion in 2023. He spoke with Warren Buffett once a week or two. Buffett resided in Omaha, Nebraska, while Munger lived in Los Angeles. During this period, both men experienced hearing loss, making communication more difficult.

“They were literally yelling at each other,” Whitney Jackson, Munger’s granddaughter’s wife and frequent visitor to his home in recent years, told the WSJ. “The conversations were supposed to be confidential, but anyone within a mile could hear them.”

Munger directed his attention to other ventures. He served on the board – and was a devoted customer – of retail giant Costco, where he held approximately $100 million in stock at the time of his death.

He also invested in Li Lu’s fund, Himalaya Capital, as well as smaller investment firms in Boston and Melbourne.

Munger made independent investments as well. Sitting in his library armchair, he would review data on public companies for hours, poring over Value Line green sheets from a nearby desk.

Friends told the WSJ that for decades he had largely avoided coal stocks, but in 2023, those companies caught his eye. Coal usage was in long-term decline, and investors saw a bleak future for the industry. However, many producers remained profitable and traded at low valuations. Munger argued to friends that coal would remain necessary as global energy demand grew.

“He read an article that coal was going to hell,” Bortwick recalled. “And he said, ‘Nonsense.’”

In May 2023, Munger purchased shares in coal company Consol Energy. Later that year, he bought stock in Alpha Metallurgical Resources, which produces coal for the steel industry. By the time of his death, Consol shares had doubled in value, and Alpha had also risen sharply, collectively generating over $50 million in unrealized gains, friends said.

“He made a very big bet – and it paid off handsomely,” Bortwick said.

Consol has since merged with another company and the price has fallen. Alpha has also declined. However, investor Monish Pabrai, a friend of Munger, argues that these investments would still be profitable if Munger had held them today. Pabrai said:

The lesson is clear: You don’t need to slow down – you just keep going.

Munger made another unusual bet near the end of his life. In 2005, at age 81, 17-year-old neighbor Avi Meyer knocked on his door in the Hancock Park neighborhood of Los Angeles, presenting him with a volume in Hebrew containing the Pentateuch.

“I had read about him and thought he was Jewish,” Meyer told the WSJ, whose grandfather had recently passed away, leaving a void in his life. (Munger was not Jewish.)

Meyer struggled in school, battling ADHD and feeling discouraged about his future.

“I was insecure,” he said. “My friends were applying to colleges, and I wasn’t.”

Meyer began spending time with Munger.

“He listened to my problems and talked about life principles and personal values,” Meyer said.

Munger told close associates he appreciated the young man’s intelligence and ambition. When Meyer hesitated about attending college, Munger encouraged him that he could attend “Munger University” instead – which he did.

“I watched him work and learned from him; he would occasionally give me books,” Meyer said.

When Meyer teamed up with childhood friend Reuben Gradon to invest in real estate, Munger followed their early steps. Several years later, he offered to back the two young entrepreneurs and their company, Afton Properties.

Around 2017, the three began acquiring low-rise apartment complexes in Southern California, becoming one of the largest owners of such properties in the state.

In his final years, Munger participated in every detail of their business – selecting neighborhoods, evaluating construction, even choosing paint colors. He took a particular interest in landscaping, insisting on low-density developments and authorizing the company to spend hundreds of thousands of dollars planting new trees, Meyer, now 37, said.

Munger encouraged Meyer and Gradon to take out long-term loans – even though many other real estate investors preferred short-term debt that could be quickly refinanced. His argument was that locking in low interest rates and holding assets for the long term was the path to true profit.

The strategy paid off: Afton’s holdings are now valued at around $3 billion, according to a source familiar with the business.

Munger privately battled serious health issues in the last decade of his life. In 1978, a surgeon botched cataract surgery, leaving him blind in one eye. He learned to compensate by installing bright lighting throughout the house.

Around 2014, however, he developed a problem with the optic nerve in his remaining eye. He faced the possibility of complete blindness – and yet accepted the situation with equanimity, Li Lu, a frequent visitor, recounted. Munger resolved to adapt, asking others to read to him and considering next steps.

“I’ll have to learn Braille,” he told a friend, but that didn’t come to pass. His remaining eye gradually improved. However, his mobility declined. Around 2016, he lost the ability to play golf – a lifelong passion – and began using a cane. Playing bridge with friends became difficult.

After losing his wife in 2010, Munger began to fear loneliness and a sense of uselessness.

He chose to spend more time with friends, which lifted his spirits. Every Tuesday, he met with half a dozen business partners and acquaintances for breakfast, typically at the Los Angeles Country Club. The group gathered around 7:30 a.m., and conversations sometimes lasted for hours. They discussed investments, exchanged jokes, and shared stories. Regular attendees included investors John Hawkins and John Conlin, Uber Chairman Ron Sugar, and later, Bobby Kotick, former CEO of Activision. Amgen CEO Robert Bradway occasionally joined. Munger, seated at the head of the table, would tell stories and share his philosophical views.

“He always said, ‘Take the first five investments of Berkshire out, and the return is pretty mediocre,’” Montgomery recalled – a lesson that success can come from a few big winning decisions.

As a younger man, Munger could be sharp and sarcastic; in his later years, however, he was warm and reflective. He told the group:

At my age, you either make new friends or you have no friends.

Munger retained his wit. When a high-ranking Ford executive came to breakfast, he surprised everyone by detailing the company’s individual product line profits for the past 25 years – then quipped:

“I don’t know why you bother making cars,” he said, implying that most of the profits came from the truck models.

Munger appeared genuinely invigorated by these gatherings – the last of which took place 10 days before his death. Paul Major, a local businessman and regular attendee, shared:

We were all learning from Charlie, and Charlie enjoyed learning from us.

Food became a particular passion. Every Friday, friends would bring lunch to Munger – chicken sandwiches with butter on soft white bread, sometimes without the crusts, fruit or salad, cherry pie, and vanilla ice cream.

For years, his family tried to keep him on a healthy diet. He resisted. “He drank water as if it were poison,” Jackson, his grandson’s wife, said.

Eventually, the family relented. They began ordering him food from outside.

“Like Korean fried chicken with kimchi fried rice and waffle fries,” Jackson said.

Jackson found the former executive chef of the Plaza Hotel in New York for his recipe for corned beef hash with lobster, but most of Munger’s favorite meals were far more accessible.

“He loved Costco hot dogs,” she said. “In the hospital, one of his last meals was an In-N-Out burger and a Diet Coke.”

Munger counted down the days to his 100th birthday on January 1, 2024. Friends and longtime business associates, including Jim Sinegal – Costco’s co-founder – planned to fly to Los Angeles for the celebration.

But his health deteriorated. He sensed the end was near. When a friend asked how he was feeling, Munger replied, “There are a lot of things wrong with me.”

Speaking about his legacy, he said he was completely at peace with his accomplishments and optimistic about the future of Berkshire.

At the end of his life, he used humor as a lifeline. He told his family he attributed his longevity to Diet Coke.

And he shared one wish:

“I wish I was 86 again…”

Late on Thanksgiving evening, two days before his death, Munger was admitted to a hospital near Montecito. He asked his family to leave so he could call Buffett for one last time.

The two exchanged final farewells.