If I said the name Warren Buffett to you, I’m 100% positive that you would know that Buffett is the Chairman of Berkshire Hathaway and currently is in the Top 6 richest people in the world (current net worth of more than $100 billion).
But if I mentioned the name Charlie Munger, chances are you might not recognize his name. However, he is the Vice Chairman of Berkshire Hathaway, and Warren Buffett considers Munger his closest partner and right-hand man.
Both Warren and Charlie grew up in Omaha, Nebraska, and although they went their separate ways after leaving their hometown, they eventually reconnected and the rest, as they say, is legendary history.
Several years ago I was invited to the Berkshire Hathaway Annual Shareholders Meeting, which is held the first Saturday of May each year at the Omaha convention center. I am not a shareholder, but I am connected with an agricultural business colleague who holds a two-day roundtable the day before, and with the attendance comes admittance to the Annual Shareholders Meeting. It was an exhilarating experience both times I’ve attended.
Berkshire Hathaway owns many companies, including See’s Candies, Geico auto insurance, NetJets, Benjamin Moore & Co. paints, Duracell and Fruit of the Loom (for a complete list of subsidiaries, click Here). Unlike many investment firms, Berkshire Hathaway likes to invest and hold. (By the way, during the annual meeting, the basement of the Omaha convention center is like a mini-convention where all of the Berkshire Hathaway companies have booths set up selling their products. Many of them have annual meeting dates and images on their items. When I was there, I bought running shoes and socks with Charlie’s and Warren’s images on each pair!)
Because I have attended two of their annual meetings, when The Tao of Charlie Munger appeared on my Audible suggested book list, I downloaded it. At 1.6X speed, the book was a mere 2.5 hours. It has more than 130 great quotes from Charlie with commentary explaining his investment philosophy. And with my curiosity aroused after I finished it, I then decided to download a book about Warren Buffet, titled Warren Buffett’s Ground Rules. I figured if two ordinary guys from Omaha, Nebraska, could create one of the most long-term successful stocks—currently trading at $423,706 per share (the most expensive publicly traded stock)—there probably were a few things I could glean from reading about them.
Anything you want to know about Berkshire Hathaway and Buffett and Munger is easily accessible with a simple Google search. There are people in both camps—those who love and admire them, and those who criticize them. What I learned from their two books was the importance of integrity in business; I admired greatly Warren’s transparent communication to his shareholders in his annual letter to them (which he personally writes). That idea confirms what I have been doing for years—having open dialogue with all employees monthly or quarterly, updating them on how our company is doing.
I also learned that neither of these gentlemen lead flashy lives. Buffett still lives in Omaha, and when I was visiting my cousins who live there too, they were very nonchalant about how they regularly run into Buffett in the neighborhood. He does not live in a big mansion nor does he drive a fancy car.
Munger made Pasadena, California, his home and I had the great fortune of meeting him in person two years ago. As it turns out, we have mutual friends, and to make a long story short, I ended up spending July 4, 2019, on Charlie Munger’s boat!
Talk about humble and engaging, it was such a delight to meet Charlie two years ago. He was born on January 1, 1924, and maintains all his dry wit and humor and is now 97. When I met him (he was 95), I worked hard to think of something original to say when we were introduced. So, I decided to tell him that we had something in common. You see, during the Berkshire Hathaway annual meeting, Warren and Charlie sit at a long table up on a stage, in the Omaha convention center filled to the brim with 40,000 shareholders, taking unscripted questions from the audience for the better part of four hours. While they sit there answering questions, they sip on their Diet Coke (they own a chunk of the Coca-Cola Company) and Charlie munches on his favorite See’s candy: Peanut Brittle. And that’s my favorite See’s candy too!
Unlike other billionaires, neither seem self-absorbed and they both seem to shun publicity. They are just “regular guys.” Well, as regular as you can be with a net worth in the billions!
I admit, I learned a lot by reading about the “Oracle of Omaha” and his sidekick. My biggest business takeaway from reading about them was the importance of having a long view of business. With publicly traded companies, most CEOs are driven for short-term predictable performance, which they report in their quarterly earnings. They worry about the share price quarter to quarter. Buffett made it clear that he only invests in businesses he understands well (which, he explained, is why he skipped investing in dotcoms). He takes the highs and lows of his investing performance the same way all shareholders do. He does not take a large salary for himself. I wonder what would happen if more company CEOs took the long view.