Weekend Reading – Charlie Munger wisdom and wit and philanthropy
Hi Readers,
Welcome to a new Weekend Reading, highlighting Charlie Munger’s wisdom, with and financial gifting.
First up, a few reminders and recent reads:
While Munger is certainly legendary, here are some valuable lessons learned and advice from other legendary investors.
Instead of covering certain stocks, I highlighted this low-cost ETF that has gained 45%+ in my portfolio this year.
Weekend Reading – Charlie Munger wisdom and wit and philanthropy
Earlier this week, the investing world lost another legend: Charlie Munger.
Charlie Munger’s family confirmed to Berkshire Hathaway, who had served as Warren Buffett’s top advisor for nearly 50 years, that Charlie passed away on November 28th, at the spry age of 99.
At the time of his death, Munger was also a real estate lawyer, a member of Costco’s board of directors, and beyond Buffett’s vice-chairman at Berkshire, a dear friend and avid philanthropist.
I read an article earlier this week that Warren Buffett credits Munger with helping shift Berkshire’s approach away from buying struggling, cheap, largely unwanted businesses and toward buying extremely strong businesses whose fair or relatively low prices made them simply: great long-term bets.
At last count, Forbes and other sources estimated Munger’s net worth at approximately $2.6 billion.
By comparison, Warren Buffett’s net worth is nearly 50x of that but Munger’s net worth would have been much, much higher had it not been for his extensive philanthropy. In fact, he’s given away the vast majority of his shares over the course of his career.
I read in 1996, Munger owned 18,829 shares (Class A Berkshire shares), which would be worth almost $10.3 billion now. That is the earliest year for which his stock ownership disclosures are available, but many think it’s likely he owned far more shares earlier in his career…
Much like the “Oracle of Omaha” with whom he worked so closely with for so long, Munger was full of wisdom and wit – leaving us mere DIY investor mortals with countless investing articles and gems along the way.
Munger popularized what he called the “lollapalooza effect,” a term Munger coined to refer to multiple mental biases working in tandem (or in concert, if you prefer) to influence investor behavior irrationally.
Munger further referred to the upsurge of cryptocurrencies, including Bitcoin in particular as “noxious poison”. Or worse and with more humour still, he referenced trading crypto like “…somebody else is trading turds and you decide, ‘I can’t be left out'”….
Ha.
As part of Weekend Reading and my own short tribute to Charlie Munger, here are some great finds and reading material. A few fun videos too!
The Best of Charlie Munger pic.twitter.com/rEfYK5CYbn
— Dividend Growth Investor (@DividendGrowth) September 28, 2023
Some gems here:
“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.”
And…
“The iron rule of nature is: You get what you reward for. If you want ants to come, you put sugar on the floor.”
Quite the story on Charlie:
“My favorite Charlie Munger story: In 1953, Munger was 29 years old. Recently divorced. Lost the house. Huge social stigma of divorce back then. His 8-year-old son, Teddy, was diagnosed with cancer. The leukemia was incurable. No medical insurance – Munger paid for all his medical care. Charlie would visit Teddy in the hospital every day — and then walk the streets crying. Teddy died at the age of 9. Charlie was broke, divorced and just lost his child. 99.9% of people would’ve turned to alcohol, drugs, or suicide. (And you’d understand why) Munger never did. Fast forward to 52 years old, a failed surgery left him blind in one eye with the potential of going fully blind one day. Charlie was an obsessive learner who read every book he could get his hands on. When confronted with the possibility of going blind and no longer being able to read he said: “It’s time for me to learn braille!” The only thing that might be more impressive than his intellect was his actions. RIP.”
My favorite Charlie Munger story:
In 1953, Munger was 29 years old.
Recently divorced. Lost the house. Huge social stigma of divorce back then.
His 8-year-old son, Teddy, was diagnosed with cancer.
The leukemia was incurable.
No medical insurance – Munger paid for all… pic.twitter.com/cGGD0sf1IU
— George Mack (@george__mack) November 29, 2023
Dividend Growth Investor highlighted his favourite list of Charlie Munger quotes. I’ve borrowed a few below:
“There is no better teacher than history in determining the future… There are answers worth billions of dollars in a history book.”
“We have three baskets for investing: yes, no, and too tough to understand.”
“One of the greatest ways to avoid trouble is to keep it simple…the system often goes out of control.”
“I would argue that passion is more important than brainpower.”
“It’s the latest lesson on the dangers of market timing. Investors wanted exposure to companies with a history of paying out profits as a precaution amid the Federal Reserve’s most aggressive tightening cycle in 40 years. Instead they were saddled with underperforming companies that proved especially vulnerable when yields shot higher.”
That said, what goes down usually comes back up. Right? We’ll see?!
In the last few days and weeks alone I received dividend raises from CNQ, SLF, RY, TD, CM, BMO and others…
The next monthly dividend update should be fun. 🙂
Barry Schwartz outlines his favourite stocks for the coming decades on our TSX index:
When I look at the 20 largest market cap stocks on the TSX, I think there are two companies that have massive long-run opportunities. Constellation and Brookfield.
— Barry Schwartz (@BarrySchwartzBW) November 29, 2023
And for my golf fans out there:
Hilarious backstory to Spieth's scorecard:
His buddy Eric is caddying this week. On the first hole Thursday he promised Spieth that for every birdie they made he'd drink 1 beer while they watched tonight's Cowboys game. Make an eagle? 3 beers.
I'll let you do the math: pic.twitter.com/9E0lLerwgh
— Dylan Dethier (@dylan_dethier) December 1, 2023
That’s a party.
Save, Invest, Prosper!
Have a great weekend!
Mark
Thank you Mark. I appreciate the story about Charlie Munger’s life journey of resilience over coming obstacles. Life long, humble learning and patient diligence is a very worthy endeavour ( as well as being grateful for the many blessings and taking advantage of the opportunities that come our way )
When Berkshire B stock became available, ( mid 1990’s I think) we were fortunate to acquire a number of shares which we still hold. The annual reports have been a ” gold mine” of sound, practical wisdom information that has been very helpful in our investment journey. I have paper copies, but the reports would also be available online. I believe the company, thanks in part to Charlie Munger, is built to last and do well. Take care. Mike
Incredible life, right? Wild.
If you’re still holding those BRK.B shares, since the mid-90s, I can’t imagine how well you’ve done. 🙂
I also own a very small bit of Berkshire and my plan is to never sell.
Any investing plans for 2024?
Take good care back.
Mark
Nice tribute to a great man and an astute investor. Fantastic news on all your raises. This guy got a few too.
Onward and upwards!
Onwards and upwards for you too!!
Have a great weekend,
Mark