Warren Buffett tours the grounds of Berkshire Hathaway’s annual meeting in Omaha, Nebraska.
David A. Grogan | CNBC
Warren Buffett paid a heartfelt tribute to the late Charlie Munger, calling his 60-year-old business partner the architect of today Berkshire Hathaway.
In his must-read annual letter on Saturday, the 93-year-old “Oracle of Omaha” described Munger’s crucial role in expanding his conglomerate and reflected on his fruitful and loving relationship with his right-hand man.
“In reality, Charlie was the ‘architect’ of what is now Berkshire, and I served as the ‘general contractor’ who carried out the day-to-day implementation of his vision,” Buffett wrote. “Charlie never tried to take credit for his role as creator, instead letting me do the bows and accept the awards. In a way, his relationship with me was part older brother, part loving father.”
Munger died in November, about a month before his 100th birthday. Munger’s investment philosophy rubbed off on the young Buffett and led to the creation of the sprawling conglomerate now worth $900 billion. Buffett recalled the beginning of the takeover of Berkshire, then a textile factory, and how Munger gave him a plan to transform the company.
“Charlie promptly advised me in 1965, ‘Warren, forget about ever buying another company like Berkshire. But now that you control Berkshire, add to that wonderful companies bought at fair prices and stop buying fair companies at wonderful prices Words: Abandon everything you learned from your hero Ben Graham . It works, but only if practiced on a small scale.’ I subsequently followed his instructions with great regression,” Buffett wrote in the letter.
After World War II, Buffett studied at Columbia University under Benjamin Graham, the legendary father of value investing, and developed an exceptional instinct for selecting cheap stocks. It was Munger who made it clear to him that this strategy of cigar butt investing could only go so far, and that it wouldn’t be enough if he wanted to significantly expand Berkshire.
“Many years later, Charlie became my partner in running Berkshire and consistently talked sense into me when my old habits surfaced,” Buffett said. “He remained in that role until his death and together, along with those who invested in us early on, we did far better than Charlie and I could have ever imagined.”
The Omaha-based conglomerate – owner of everything from Geico insurance to BNSF Railway to Dairy Queen ice cream – recently hit consecutive record highs, trading over $620,000 for Class A shares and boasting a market value of over $620,000 $900 billion.
“Berkshire has become a great company. Although I have long been in charge of the construction crew, Charlie should forever be considered an architect,” Buffett said.
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2024-02-24 13:56:42
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