Charlie Munger, who quit a law career to become Warren Buffett’s trusted confidant and longtime second-in-command at Berkshire Hathaway, died Tuesday morning. He was 99.
Berkshire said Munger died peacefully at a hospital in California, where he lived. No cause was given. Munger would have turned 100 on January 1.
“Berkshire Hathaway could not have been built to its present status without Charlie’s inspiration, wisdom and participation,” Buffett, Berkshire’s 93-year-old chairman and chief executive, said in a statement.
Company executive since 1970s
Munger had been a Berkshire vice chairman since 1978, working closely with Buffett on allocating the Omaha, Nebraska-based conglomerate’s capital, and being quick to tell him when he was making a mistake.
“It’s a shock,” said Thomas Russo, a partner at Gardner Russo & Quinn in Lancaster, Pennsylvania, and longtime Berkshire shareholder. “It will leave a big void for investors who have modeled their thoughts, words and activities around Munger and his insights.”
Investors expect Munger’s death to be felt keenly by Buffett and the investing world generally.
“He was certainly one of the greatest investors, as a team with Buffett,” said Rick Meckler, partner at Cherry Lane Investments in New Jersey. “I’m sure it is an enormous loss for Buffett personally.”
Believed in compounding and reinvesting
Munger was known for steering Buffett’s purchases.
“Charlie felt that buying very good businesses at fair prices that could keep compounding and reinvesting cash flow into continued growth was more consistent with how he and Warren were philosophically and liked to invest,” said Paul Lountzis, president of Lountzis Asset Management in Wyomissing, Pennsylvania. “They liked to own businesses forever.”
Thomas Hayes, chairman of Great Hill Capital in New York, said the “big change that Charlie brought to the value investing community was not just looking for what was cheap but looking for what was out of favor but high quality.”
Investors said Munger’s death was unlikely to have a major impact on Berkshire’s operations.
Two other vice chairmen, Greg Abel and Ajit Jain, have day-to-day oversight of Berkshire’s non-insurance and insurance businesses, respectively.
Abel is expected to become chief executive once Buffett, 93, is no longer in charge.
Berkshire’s businesses include the BNSF railroad, car insurer Geico, and an array of energy, industrial and retail operations, as well as familiar consumer names such as Dairy Queen, Duracell, Fruit of the Loom and See’s Candies.
It also owns hundreds of billions of dollars of stocks, led by Apple.
“I wouldn’t think Berkshire will look much different, apart from Buffett no longer being able to share ideas with Munger,” said Russo. “Berkshire may be a little less fun without him.”
Buffett has never publicly signaled a desire to step down, including after a prostate cancer diagnosis in 2012.
“At 93, I feel good but fully realize I am playing in extra innings,” Buffett said recently.