Charlie Munger

Charlie Munger persuaded Warren Buffett to stop buying cheap bad companies and start buying good ones at fair prices, which is the single change that made Berkshire Hathaway what it became. He was from Omaha, worked in Buffett's grandfather's grocery store as a boy without the two ever meeting, served as a meteorologist in the Army Air Corps, and was admitted to Harvard Law without an undergraduate degree. He practised law, founded the firm that still bears his name, and ran an investment partnership through the 1960s and 1970s that returned around twenty per cent a year and then lost more than half its value in 1973-74 before recovering. He became vice-chairman of Berkshire in 1978. His contribution was intellectual rather than operational: the insistence on quality, durable competitive advantage and a latticework of mental models drawn from psychology, physics and biology rather than from finance. His talk on the psychology of human misjudgement is widely circulated. He lost an eye to a botched cataract operation in 1980 and taught himself to live with monocular vision rather than have the other operated on. He died five weeks short of a hundred. His first marriage ended and his young son Teddy died of leukaemia within the same few years, at a time when there was no insurance for it, and he continued working through both. He was chairman of the Daily Journal Corporation and a director of Costco for decades, and used the annual meetings of both to say what he thought. He trained himself on the maxim to invert, always invert - to ask what would guarantee failure and avoid that. He designed buildings as an amateur and gave large sums to the University of Michigan and to Santa Barbara on the condition that his windowless dormitory plan be built, which architects publicly objected to.

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