What Does Warren Buffett Say About Charlie Munger? Any discussion of investment strategies is sure to touch on Warren Buffett. In the 80+ years since Buffett bought his first stock at the age of 11, he has developed a thoughtful, deliberate method of identifying the most promising companies and buying them at value prices.
Buffett took the helm of Berkshire Hathaway in 1965, and he transformed the struggling textile business into a wildly successful holding company. In addition to a $344 billion portfolio of securities, Berkshire Hathaway (BRK.A) owns a collection of subsidiaries like Pampered Chef, Dairy Queen, and Geico.
Though Warren Buffett is the man who comes to mind first when thinking of the world’s most successful investors, the fact is that he doesn’t work alone. Charlie Munger, Vice-Chairman of Berkshire Hathaway, is Buffett’s closest partner and an integral part of the company’s success.
How Much Berkshire Stock Does Charlie Munger Own?
As Charlie Munger approaches his 100th birthday, he remains an active participant in Berkshire Hathaway’s business. He has been Warren Buffett’s most trusted advisor since he joined the company in 1978, and he has worked alongside Buffett to grow Berkshire Hathaway into a massive enterprise valued at nearly $700 billion.
Buffett still owns a large stake in Berkshire Hathaway, which makes up the lion’s share of his total wealth. He has indicated that most of his billions will be given away to charity after his death, but for now, he controls approximately 30 percent of the company’s voting shares.
Munger started his philanthropic gifts years ago, so he no longer owns a significant portion of Berkshire Hathaway. However, as with Buffett, much of his net worth is tied up in the company. In a 1999 Berkshire Hathaway “Owner’s Manual”, Buffett said:
In line with Berkshire’s owner-orientation, most of our directors have a major portion of their net worth invested in the company. We eat our own cooking.
What Does Warren Buffett Say About Charlie Munger?
Warren Buffett never takes sole credit for Berkshire Hathaway’s success. He refers to Charlie Munger as his “right-hand man” and always uses the term “we” when discussing business decisions.
Buffett has recognized Munger for advice that transformed his investment strategy and likely ensured Berkshire Hathaway’s ability to beat the market over time. Before Munger, Buffett engaged in “cigar butt” value investing, which involved purchasing a dying business at a discount – say $0.80 on the dollar – to get the 20 cents of “free puff.”
Munger knew that buying an unsustainable business typically turned out to be a false discount, and once he showed Buffett this bit of wisdom, Berkshire Hathaway began choosing different types of acquisitions. Buffett and Munger took to buying great businesses for a bit over the intrinsic value if it was clear that the company would deliver strong growth and impressive long-term returns.
Buffett often quotes Munger as saying, “Forget what you know about buying fair businesses at wonderful prices; instead, buy wonderful businesses at fair prices.” It’s a different approach to value investing – but one that has worked well for Berkshire Hathaway.
Of course, neither Buffett nor Munger will live forever, and Berkshire Hathaway shareholders are thinking about what comes next. Buffett has indicated that Greg Abel, who is currently Berkshire Hathaway’s Vice President of Non-Insurance Operations, will be the company’s next leader. Abel shares the core values Buffett and Munger have baked into Berkshire Hathaway’s culture: integrity, honesty, trust, and humility.
It doesn’t appear that Buffett intends to step down from his leadership role anytime soon. In fact, in one memorable Warren Buffett quote, he said he doesn’t plan to retire until five years after his death. In the meantime, Buffett, Munger, Abel, and a number of other dedicated leaders continue to build value for Berkshire Hathaway’s shareholders.
Why Is Charlie Munger Worth So Little Compared to Buffett?
Charlie Munger is on the Forbes Billionaire List, but he ranks far below Warren Buffett.
Charlie Munger’s net worth in 2022 is approximately $2.5 billion, as compared to Warren Buffett’s net worth of $118 billion.
Certainly, Munger works as hard as Buffett, and his insights and direction are key to Berkshire Hathaway’s success. So, why is Charlie Munger worth so much less than Warren Buffett?
The answer comes down to charitable contributions.
While Buffett plans to have his wealth distributed to non-profits after his death, Munger elected to make large contributions during his lifetime. His primary interest is in education, which has resulted in substantial donations to the University of Michigan Law School, Stanford University, and the University of California – Santa Barbara, among others.
What Did Munger Say About Bitcoin?
It’s safe to say that both Warren Buffett and Charlie Munger hate cryptocurrency in general and Bitcoin in particular, but it seems Munger is a bit more passionate about the subject. The topic comes up at every shareholder’s meeting, and each year Buffett and Munger appear more disgusted by this new type of asset.
In 2013, they called Bitcoin “rat poison,” and their perspective hasn’t changed since, despite Bitcoin’s returns. Some speculate that Buffett and Munger feel an obligation to speak out against cryptocurrency investment because there is too much potential for inexperienced investors to realize significant losses.
Their primary concern appears to be with the fact that Bitcoin and other cryptocurrencies aren’t productive assets and don’t produce anything tangible. They aren’t well-regulated, and they are somewhat anonymous, which makes them an obvious choice for fraud and criminal activity.
At the most recent Berkshire Hathaway shareholder’s meeting, Charlie Munger said this about Bitcoin:
In the first place, it’s stupid because it’s still likely to go to zero. It’s evil because it undermines the Federal Reserve System … and third, it makes us look foolish compared to the Communist leader in China. He was smart enough to ban bitcoin in China.
Is Charlie Munger Holding Alibaba?
Warren Buffett and Charlie Munger usually see eye-to-eye, but there are a few occasions in which Buffett doesn’t follow Munger into a particular investment. Chinese e-commerce giant Alibaba is one example.
Throughout 2021, Munger insisted that market experts were wrong in saying that Chinese companies were in decline. He expressed confidence that most are better managed and more prepared for long-term success than their US counterparts, and he was particularly impressed by Alibaba (NYSE:BABA).
However, it seems Munger has reconsidered his faith in Alibaba, and he no longer promotes the purchase of Alibaba shares. Where he has decision-making authority in portfolio management, he has reduced or eliminated positions in Alibaba.
Munger hasn’t remarked on his change of heart – perhaps the fact that the company has lost at least 55 percent of its value in the past year influenced his perspective. In any case, it is clear that Munger no longer considers Alibaba stock a buy.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.