Warren Buffett attends the Berkshire Hathaway annual shareholder meeting in Omaha, Nebraska.
David A. Grogan | David A. Grogan CNBC
Warren Buffett paid a heartfelt tribute to the late Charlie Munger, calling his business partner of 60 years the creator of today’s world. Berkshire Hathaway.
In his must-read annual letter Saturday, the 93-year-old Oracle of Omaha detailed Munger’s important role in helping him expand his conglomerate and reflected on his productive and fraught relationship with his right-hand man. Loving relationship.
“Charlie is, in effect, the ‘architect’ of what is now Berkshire Hathaway, while I serve as the ‘general contractor’ responsible for the day-to-day construction of his vision,” Buffett wrote. “Charlie never tried to Instead of being praised for my role as a creator, I was asked to take a bow and accept the praise. In a way, his relationship with me was half brother, half loving father.”
Munger died in November, about a month before his 100th birthday. Munger’s investment philosophy infected the young Buffett, creating a huge conglomerate worth US$900 billion today. Buffett recalled the beginnings of the acquisition of Berkshire, then a textile mill, and how Munger fed him the blueprint for transforming the company.
“Charlie immediately advised me in 1965: ‘Warren, stop buying companies like Berkshire. But now that you control Berkshire, you should buy good businesses at reasonable prices and give up the Buy average businesses at reasonable prices. In other words, abandon everything you learned from your hero Ben Graham. It works, but only when practiced on a small scale. Then my attitude emerged It took a big step back, but I still followed his instructions,” Buffett wrote in the letter.
After World War II, Buffett studied under the famous father of value investing, Benjamin Graham, at Columbia University and developed extraordinary skills in picking cheap stocks. Munger made him realize that this cigar-butt investing strategy could only go so far, and if he wanted to significantly expand Berkshire Hathaway, it wouldn’t be enough.
“Many years later, when Charlie became my partner in running Berkshire Hathaway, he continually jolted me back to my senses when my old habits surfaced,” Buffett said. “He continued until his death. In this role, we, along with those who invested with us early on, ended up with better results than Charlie and I could have ever dreamed of.”
The Omaha-based conglomerate, which owns businesses ranging from Geico insurance to BNSF railroad to Dairy Queen ice cream, recently hit consecutive record highs, with Class A shares trading at more than $620,000 and a market capitalization of more than $900 billion.
“Berkshire has become a great company,” Buffett said. “While I have long been responsible for the construction team, Charlie should always be considered the architect.”
