By Jonathan Stempel
NEW YORK, Nov 28 (Reuters) - Charles Munger, who died on Tuesday, went from working for Warren Buffett's grandfather for 20 cents an hour during the Great Depression to spending more than four decades as Buffett's second-in-command and foil atop Berkshire Hathaway Inc.
Munger's family had advised that he died peacefully on Tuesday morning at a California hospital, said Berkshire.
The union of Munger with Buffett is among the most successful in the history of business; they transformed Omaha, Nebraska-based Berkshire into a multi-billion dollar conglomerate with dozens of business units.
Yet the partnership that formally began when they teamed up in 1975 at Berkshire, where Buffett was chairman and Munger became vice chairman in 1978, thrived despite pronounced differences in style, and even investing.
Known almost universally as Charlie, Munger displayed a blunter form of musings, often in laconic one-liners, on investing, the economy, and the foibles of human nature.
He likened bankers to uncontrollable "heroin addicts," called the virtual currency Bitcoin "rat poison," and told CNBC that "gold is a great thing to sew into your garments if you're a Jewish family in Vienna in 1939 but I think civilized people don't buy gold. They invest in productive businesses."
Munger was no less pithy in talking about Berkshire, which made both he and Buffett billionaires and many early shareholders rich as well.
"I think part of the popularity of Berkshire Hathaway is that we look like people who have found a trick," Munger said in 2010. "It's not brilliance. It's just avoiding stupidity."
EXPANDING BUFFETT'S HORIZONS
Munger and Buffett did differ politically, with Munger being a Republican and Buffett a Democrat.
They also differed in personal interests.
For example Munger had a passion for architecture, designing buildings such as a huge proposed residence for the University of California, Santa Barbara known as "Dormzilla," while Buffett claimed not to know the color of his bedroom wallpaper.
Yet at Berkshire, the men became inseparable, finishing each other's ideas and according to Buffett never having an argument.
Indeed, when Munger and Buffett would field shareholder questions for five hours at Berkshire's annual meetings, Munger routinely deadpanned after Buffett finished an answer: "I have nothing to add."
More often, he did, prompting applause, laughter or both.
"I'm slightly less optimistic than Warren is," Munger said at the 2023 annual meeting, prompting laughter after Buffett expressed his familiar optimism for America's future. "I think the best road ahead to human happiness is to expect less."
Like Buffett, Munger was a fan of the famed economist Benjamin Graham.
Yet Buffett has credited Munger with pushing him to focus at Berkshire on buying wonderful companies at fair prices, rather than fair companies at wonderful prices.
"Charlie shoved me in the direction of not just buying bargains, as Ben Graham had taught me," Buffett has said. "It was the power of Charlie's mind. He expanded my horizons."
ORACLE OF PASADENA
Fans dubbed Buffett the "Oracle of Omaha," but Munger was held in equal esteem by his own followers, who branded him the "Oracle of Pasadena" after his adopted hometown in California.
Munger reserved many of his public comments for annual meetings of Berkshire; his investment vehicle Wesco Financial Corp, which Berkshire bought out in 2011; and Daily Journal Corp, a publishing company he chaired for 45 years.
To fans, Munger was as much the world-weary psychiatrist as a famed investor. Many of his observations were collected in a book, "Poor Charlie's Almanack: The Wit and Wisdom of Charles T. Munger," with a foreword by Buffett.
"I was raised by people who thought it was a moral duty to be as rational as you could possibly make yourself," Munger told Daily Journal shareholders in 2020.
"That notion," he added, "has served me enormously well."
In 2009, during the worst U.S. recession since the Great Depression, he tried to put his followers at ease.
"If you wait until the economy is working properly to buy stocks, it's almost certainly too late," he said at Wesco's annual meeting.
After that gathering, Los Angeles Times columnist and Wesco investor Kathy Kristof wrote about Munger: "He gives us hope."
TETE-A-TETE
Born on Jan. 1, 1924, Munger as a boy once worked part-time at the Omaha grocery run by Buffett's grandfather Ernest.
Buffett also worked there though he and Munger, who was 6-1/2 years older, did not work together.
Munger later enrolled at the University of Michigan, but dropped out to work as a meteorologist in the U.S. Army Air Corps during World War II.
Despite never getting an undergraduate degree, Munger graduated from Harvard Law School in 1948.
He then practiced law in Los Angeles, co-founding the law firm now known as Munger, Tolles & Olson, before turning in the mid-1960s to managing investments in stocks and real estate.
Munger was a success, easily outperforming the broader market between 1962 and 1975 at his investment partnership Wheeler, Munger & Co.
According to Buffett biographer Alice Schroeder, Munger met Buffett in Omaha in 1959, where at a private room at the Omaha Club they "fell into a tete-a-tete" after being introduced.
More conversations followed, and they were soon talking by phone for hours on end.
"Why are you paying so much attention to him?" Munger's second wife Nancy reportedly asked her husband.
"You don't understand," Munger replied. "That is no ordinary human being."
KNOWING HIS MILIEU
The two shared the "value investing" philosophy espoused by Graham, looking for well-run companies with undervalued share prices.
Sometimes Munger and Buffett deemed those companies "cigar butts," meaning they were out of favor but had a few "puffs" of life left, but they often proved worth holding onto for decades.
Both generally shunned technology companies and other businesses they claimed not to understand, and they avoided getting burned after the late 1990s dot-com bubble went bust.
Instead, they oversaw purchases such as the BNSF railroad in 2010, and ketchup maker H.J. Heinz Co, which Berkshire and private equity firm 3G Capital bought in 2013. Berkshire and 3G later merged Heinz with Kraft Foods.
It was Munger who suggested that Buffett make one of Berkshire's few non-U.S. investments, in Chinese automobile and battery company BYD Co.
Munger was also responsible for introducing Buffett to Todd Combs, who along with Ted Weschler run parts of Berkshire's investment portfolio.
Unlike Buffett, who opened a Twitter account - seldom used - Munger resisted heading into social media.
"That's not my milieu. I don't like too many things going on at once," he once told Reuters.
But in many other ways, he was much like his business partner, especially in not chasing the latest trends.
"I am personally skeptical of some of the hype that has gone into artificial intelligence," Munger said at the 2023 annual meeting. "I think old-fashioned intelligence works pretty well."
Munger lived modestly and drove his own car, though he used a wheelchair in his final years.
He was also a generous philanthropist, pledging more than $100 million in 2013 to build housing at the University of Michigan.
Nancy Munger died in 2010. Charlie Munger had six children and two stepchildren from his marriages.
(Reporting by Jonathan Stempel in New York; editing by Diane Craft and Rosalba O'Brien)
((jon.stempel@thomsonreuters.com; +1 646 223 6317; Reuters Messaging: jon.stempel.thomsonreuters.com@reuters.net))