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Charlie Munger, vice chairman of Berkshire Hathaway and an investment partner of Warren Buffett, died Tuesday morning at the age of 99 in a California hospital, the American investment group said.
Munger, a trained attorney who still sits at the Los Angeles law firm Munger, Dolls & Olson, was instrumental in turning Berkshire into an investment powerhouse. .
“Berkshire Hathaway could not have been built to what it is today without Charlie’s inspiration, wisdom and participation,” Buffett, Berkshire’s chief executive, said in a statement.
Munger’s death brings Berkshire and its hundreds of thousands of shareholders closer to an era in which the nearly $800bn investment empire will be led by less familiar leaders.
Berkshire has been preparing for more than a decade for this moment, the day when 93-year-old Buffett hands over the reins. Munger casually revealed that Greg Abel, who rose through Berkshire’s energy business and is now vice president of its broader non-insurance division, would one day succeed the pair.
Abel is surrounded by a select team of Munger and Buffett. It includes many value investors, the board of directors and the board that decides how Berkshire invests its $319bn stock portfolio, sharing a similar approach to bond analysis with the two billionaires.
Despite his vice-chairman title, Munger was far more than Buffett’s second-in-command and was often the driving force behind investments. Before sitting down for an interview with the Financial Times this year at his home in Los Angeles, he was researching a potential real estate development deal.
Munger often consulted on major acquisitions, sometimes negotiating the details himself, people sitting across the table from him said. His passion for engineering helped guide the company in many of its investments, including Chinese carmaker BYD.
Munger was born on January 1, 1924 in Omaha, Nebraska. A survivor of the Great Depression, he studied meteorology while serving in the Army during World War II before graduating from Harvard Law School.
Munger met Buffett in 1959 and formed his law firm in 1962, the same year Buffett began buying shares in textile maker Berkshire Hathaway.
Buffett repeatedly pushed Munger to jump into the world of investing, at one point telling him that “law was good as a hobby, but he could do better.” Munger eventually formed his own investment partnership known as Wheeler, Munger & Company. Like Buffett, the returns were excellent. Munger’s partnership earned an average annual return of 24.3 percent between 1962 and 1975, compared with a 6.4 percent return for the Dow Jones Industrial Average.
Munger eventually joined the board of Berkshire Hathaway in 1978.
“Charlie Munger broke my cigar habit and paved the way to building a business with massively satisfying profits,” Buffett wrote to shareholders in 2015. About buying fair trades at amazing prices; Instead, shop for amazing deals at reasonable prices.
The pair’s investment acumen and ability to weather market downturns drew tens of thousands of shareholders to Berkshire’s annual meeting in Omaha. Munger told attendees at this year’s meeting: “The best path to human happiness is to expect less. I think it’s only going to get harder.
In a 1995 address to Harvard students, he focused on 24 misconceptions that he believed affected decision makers.
“The human mind is like the human egg, and the human egg has a closing device,” he said. “When one sperm gets in, it closes, so the next one can’t get in. The human mind has a great tendency of the same. Here again, it doesn’t catch ordinary people, it catches physical deities.
Despite his and Berkshire’s successes, Munger – whose fortune Forbes estimates at $2.6bn – remains wary of the prospects for other investors.
“We were a creature of a certain period and the perfect set of opportunities,” he told the FT this year, adding that he lived in “the perfect period to be a common stock investor”.
“It’s the nature of things that a very smart person can work hard and get three, four, five good long-term opportunities to buy great companies at cheap prices,” he said. “It rarely happens.”
Additional reporting by Peter Wells in New York