Berkshire Hathaway Vice Chairman Charlie Munger passes away at age 99

"Warren, if people weren’t so often wrong, we wouldn’t be so rich.”
-Charlie Munger

Charles Thomas Munger, the oracle of Pasadena and one of the most important figures in Berkshire Hathaway, passed away on Tuesday, 28 November 2023, at the age of 99. Warren Buffet’s second in command was known for his excellent understanding of the financial market, business acumen, witty one-liners, and the life lessons he used to impart to other investors during Berkshire's annual shareholder weekends.

Investors in Berkshire Hathaway have conveyed their condolences, stating that Munger has left a void that would be impossible to fill despite the company’s well-thought-out succession plan.

Charles Munger passed away peacefully at a hospital in California, and no cause has yet been disclosed.

Warren Buffett, the 93-year-old chairman and CEO of Berkshire Hathaway, stated in a press release that the company could not have attained its current status without the inspiration, wisdom, and participation of Charlie.

Charles Munger has been the vice chairman of Berkshire Hathaway since 1978. His death marks the end of an era in corporate America and investing.

Charles Munger was a respected and adored figure among investors all around the world. Buffett and Munger would attract hordes of investors to Berkshire's annual shareholder weekends in Omaha, Nebraska, where the duo would share their wisdom on investing and life.

Although Munger was not active in Berkshire’s day-to-day operations, he was still an active member of the board, and his advice was very valuable to Buffett.

Investors have also stated that while Berkshire has installed various competent managers, Munger’s loss would still deeply affect every employee.

Thomas Russo, a partner at Gardner Russo & Quinn in Lancaster, Pennsylvania, and a longtime Berkshire shareholder, expressed that the announcement was shocking. He remarked that it would create a significant void for investors who had shaped their thoughts, words, and activities around Munger and his insights.

Munger and Buffett

Charles Munger had worked very closely with Warren Buffett since his appointment as the vice chairman of Berkshire Hathaway. Charles Munger was always honest about his views on his partner’s business decisions.

Rick Meckler, a partner at Cherry Lane Investments in New Jersey, proclaimed Charles Munger as one of the greatest investors of all time, along with Warren Buffett.

Munger was notably known for stopping Buffett from purchasing mediocre companies, or, as Buffett liked to call them, “cigar butts," as they only had a puff of smoke left.

Paul Lountzis, president of Lountzis Asset Management in Wyomissing, Pennsylvania, conveyed that Charlie felt that acquiring excellent businesses at reasonable prices, businesses capable of compounding and reinvesting cash flow for sustained growth, aligned more consistently with their philosophical approach to investing, as shared by him and Warren. Lountzis mentioned that they preferred to own businesses for an extended period of time.

The Future of Berkshire Hathaway

Berkshire won’t certainly be able to replicate Munger’s impact on the company, and there has not been any talk of his replacement on the board.

Berkshire has two other vice chairmen, Greg Abel and Ajit Jain, and they are tasked with overseeing the day-to-day operations of Berkshire’s non-insurance and insurance businesses.

Munger's passing occurred one week after Buffett generously donated approximately $866 million worth of Berkshire stock to four family charities. This act coincided with a rare shareholder letter from Buffett, in which he candidly acknowledged the finite nature of his time and reflected on the twilight of his illustrious investing career.

In his recent letter, Buffett reassured shareholders that Berkshire was "built to last" and would continue to thrive even in his absence. Despite reaching the age of 93 and acknowledging that he was in the metaphorical "extra innings," Buffett had not publicly expressed a desire to step down, maintaining his commitment to the company.

Berkshire's succession plan, inadvertently revealed by Munger during the 2021 annual meeting, designates Abel as the future chief executive once Buffett relinquishes control. Warren Buffett's son, Howard Buffett, would assume the role of non-executive chairman, while one or two portfolio managers would take charge of investments.

The diverse portfolio of Berkshire encompasses businesses such as the BNSF railroad, car insurer Geico, and a range of energy, industrial, and retail operations. Well-known consumer brands under its umbrella include Dairy Queen, Duracell, Fruit of the Loom, and See's Candies. Additionally, Berkshire holds a substantial portfolio of stocks, with Apple leading the pack in terms of value.

One thing is for sure, and that is that without Munger sitting up there with Buffett, those annual shareholder meetings are going to be a lot less fun.

Domain-b.com would like to offer its condolences to the loved ones of Charles Munger and the whole Berkshire Hathaway family.