|
Charles Thomas Munger partnered with Otis Booth in real estate development. He partnered with Jack Wheeler to form Wheeler, Munger, and Company, an investment firm with a seat on the Pacific Coast Stock Exchange. He wound up Wheeler, Munger in 1976 after some gut-wrenching results.
Although Munger is more famous for his association with Warren Buffett, Munger ran a very successful investment partnership of his own from 1962 to 1975. According to Buffett's famous essay, "The Superinvestors of Graham and Doddsville", Munger's investment partnership generated compound annual returns of 19.8% during the 1962-75 period compared to a 5.0% annual appreciation rate for the Dow.
Munger is also the chairman of Wesco Financial Corporation, an 80.1%-owned subsidiary of Berkshire Hathaway. It began as a savings and loan association, but now controls Precision Steel Corp., CORT Furniture Leasing, Kansas Bankers Surety Company, and other ventures. Wesco Financial has an equity portfolio of over $1.5 billion dollars that is concentrated in Coca-Cola, American Express, Wells Fargo, Procter & Gamble, and Kraft Foods. A single stock can make up 50% of the value of the entire portfolio. Munger believes that holding a concentrated number of stocks, that he knows extremely well, will in the longterm produce superior returns. Wesco is based in Pasadena, California, Munger's adopted hometown and the site of the company's annual shareholders' meeting, which is typically held on the Wednesday or Thursday after the more famous Berkshire Hathaway annual meeting. Munger's meetings are nearly as legendary in the investment community as those he co-hosts with Buffett in Omaha. Such meetings are often perfunctory, but Munger interacts with the other Wesco shareholders at considerable length, sometimes speculating about what his hero Benjamin Franklin would do in a given situation. Meeting notes are taken and posted in the internet.
Buffett has often publicly stated that he regards Munger as his partner. Indeed, Munger owns enough Berkshire Hathaway stock to be a bona fide billionaire in his own right. However, Munger is hardly a carbon copy of Buffett: Munger is known to be a Republican, whereas Buffett has generally supported Democrats. Buffett devotes his time almost exclusively to his business, while Munger, who has not involved himself in the day-to-day operations of Berkshire for many years, is a generalist for whom investment is only one of a broad range of interests. Each man feels that their differences complement rather than detract from their relationship.
|
Charles Thomas Munger 
