In a letter to shareholders released on 24/02, the philosopher from Omaha emphasized the indispensable role of Mr. Munger in the construction and expansion of the Berkshire Hathaway empire, while sharing about the loving relationship with the man who has been his “right-hand” for the past 60 years.
“In fact, Charlie is the architect of today’s Berkshire Hathaway, while I play the role of the contractor building the company according to his vision,” Mr. Buffett wrote in the letter. “Charlie has never tried to take credit for himself, instead he has attributed all the credit to me and let me receive all the praise. In a way, Charlie is both an older brother and a father figure to me.”
In November 2023, investors and the business community were shocked by the departure of the legendary Charlie Munger at the age of 99. Munger’s investment philosophy has influenced the young Buffett, thereby building the massive conglomerate valued at $900 billion today. Buffett recalled the time when he started buying Berkshire Hathaway, when it was still a textile factory, and how Munger guided him in transforming the company into a giant empire.
“In 1965, Charlie immediately advised me: ‘Warren, forget about buying another company like Berkshire Hathaway. But now that you have control of Berkshire Hathaway, add great businesses purchased at reasonable prices, don’t buy reasonably-priced businesses with great prices. In other words, abandon everything you learned from your hero, Ben Graham. That strategy is effective but only when implemented on a small scale.’ With many setbacks thereafter, I followed his guidance,” Mr. Buffett wrote in the letter.
As a young man, Warren Buffett studied under Benjamin Graham, the father of value investing, at Columbia University after World War II, and as a result, excelled in choosing cheap stocks. It was Munger who made him realize that this “cigar butt” investment strategy could only go so far, and if he wanted to build Berkshire Hathaway into an empire, this strategy would not work.
“Many years later, Charlie Munger accompanied me in leading Berkshire Hathaway and reminded me many times when my old habits resurfaced,” Mr. Buffett shared. “He continued in this role until his death, and we, along with the early investors, have achieved success beyond what Charlie and I had ever dreamed of.”
Berkshire Hathaway is a diversified conglomerate, with operations spanning from insurance, finance, railroads to confectionery. The price of Berkshire Hathaway’s Class A stock also set a record of $628,930 per share on 23/02.
“Berkshire Hathaway has now become a great company. Although I have led the team in building Berkshire Hathaway, Charlie will always be remembered as an architect of Berkshire,” Mr. Buffett shared in the letter.
