Charlie Munger's life is full of legends. He is not only Warren Buffett's right-hand man and life partner, but also a great investment thinker of our time.
The following is a detailed account of his life:
1. Early life and educational background
Birth and Family: Charlie Munger was born on January 1, 1924, into a wealthy family in Omaha, a city in the Midwestern United States. His grandfather was a federal judge and his father was a lawyer who graduated from Harvard Law School. His family background had a profound impact on Munger's later education and career choices.
Education: Munger's education is rich and varied. He initially studied mathematics at the University of Michigan and also had a keen interest in physics. After the outbreak of World War II, he joined the U.S. Army Air Corps and studied natural sciences and engineering at the University of New Mexico and California Institute of Technology. After the war, he used the GI Bill to enter Harvard Law School and graduated with honors.
2. Early Career
Lawyer career: After graduation, Munger co-founded a law firm in Los Angeles and began his legal career. However, he gradually developed a keen interest in investment and gradually transformed in his career.
Real estate investment: In addition to continuing his legal work, Munger also got involved in real estate development and construction, and earned his first pot of gold in life - $1.4 million. This money laid a solid foundation for his later investment career.
3. Cooperation with Buffett
Acquaintance and Cooperation: Munger's acquaintance with Buffett changed the trajectory of his life. The two met in 1959 and soon became like-minded investment partners. At Buffett's repeated suggestions, Munger withdrew from his law firm in 1965 and founded Wheeler and Munger Securities with Jack Wheeler and Al Marshall, and began to operate funds as a professional investor.
Berkshire Hathaway: Since 1978, Munger has served as the vice chairman of Berkshire Hathaway and has worked with Buffett to create a well-known investment legend. Their investment strategy is based on long-term holding and value investment, focusing on fundamental analysis and the intrinsic value of the company. This strategy has enabled Berkshire Hathaway to achieve amazing success over the past few decades.
IV. Investment philosophy and achievements
The following are the main features of Munger's investment philosophy:
1. Value investment is the core
Intrinsic value assessment: Munger insists on value investing and believes that the true value of a stock is determined by its intrinsic value. He advocates that investors study the company's financial statements in depth and make a comprehensive assessment of the company's operating conditions and profit prospects.
Margin of safety: Buying when the price is significantly lower than the value can create a margin of safety, which is one of Munger's important principles of value investing.
2. Diversify your investments
Diversification of risks: Munger emphasizes diversified investment, believing that this can reduce the risk of the portfolio. He advocates that investors diversify their investments among companies in different industries, countries, and economic cycles.
Multiple Thinking Models: Munger uses multiple thinking models for investment analysis, which requires him to master multiple thinking patterns from different disciplines in order to fully understand the investment objects and the ecosystem in which they are located.
3. Long-term investment
Long-term perspective: Munger firmly believes in long-term investment and believes that long-term investment can achieve higher returns. He advocates that investors ignore short-term fluctuations and focus on long-term returns.
Be patient and wait: Munger believes that good investment opportunities often require time to wait, and investors should be patient and not be disturbed by market fluctuations.
4. Reverse thinking
Independent thinking: Munger advocates reverse thinking, not blindly following the trend, and having the ability to think independently. He encourages investors to think about problems in reverse and examine investment opportunities from multiple angles.
5. Emphasize preparation and self-discipline
Emphasis on preparation: Munger believes that detailed screening and preparation are the key to investment success. He emphasizes the importance of diligent study and thinking rather than rushing into action.
Self-discipline and patience: Munger has shown great self-discipline and patience in his investments. He sticks to his investment principles and is not easily affected by market sentiment.
6. Focus on the company’s competitive advantage
Moat Theory: Munger believes that a company's competitive advantage is its "moat", an invisible trench that protects the company from invasion. He emphasizes that investors should focus on companies with strong competitive advantages.
7. Rationality and objectivity
Rational decision-making: Munger advocates staying rational, objective and calm in investment decisions, avoiding emotional decisions and blindly following the trend.
8. Continuous learning and improvement
Continuous learning: Munger believes that investment is a subject of continuous learning. He encourages investors to continuously acquire new knowledge and skills to better invest.
Investment achievements:
Munger and Buffett have jointly invested in many well-known companies, such as The Washington Post, American Express, Coca-Cola, Wells Fargo, etc., creating countless classic investment cases. In addition, he has also invested in many Chinese companies, such as BYD.
Munger is known as a "walking encyclopedia". His investment wisdom is not only reflected in his in-depth analysis of financial statements, but also in his keen insight into corporate competitive advantages, industry trends and the macroeconomic environment.
He proposed investment concepts such as "multi-dimensional thinking model" and "moat theory", which have had a profound impact on global investors.
5. Personal Life and Charity
Personal life: Munger has eight children and a harmonious family. He loves reading and has a wide range of subjects. He is a curious and inquisitive person. In addition, he also likes to play bridge and piano for entertainment.
Philanthropy: Munger is a generous philanthropist. He supports various social welfare projects, including education, medical care, culture and scientific research, through Berkshire's charitable foundation. His charitable behavior reflects his sense of social responsibility and contribution to society.
6. Later Years and Death
Later life: Munger continued to be active in the investment community and philanthropy in his later years. He maintained his thirst for knowledge and passion for investing, constantly learning and exploring new investment areas.
Death: On November 28, 2023, Charlie Munger died at the age of 99. His death was deeply mourned by the global investment and philanthropic communities. Buffett said in a press release, "Without Charlie's inspiration, wisdom and involvement, Berkshire Hathaway would not have been able to grow to its current position."
In summary, Charlie Munger's life is a legendary one. He has not only achieved outstanding achievements in the field of investment, but also made great contributions to society through charity. His investment philosophy and life philosophy will always inspire future generations to move forward.
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Disclaimer: The content of this article is intended to share information and disseminate knowledge, and is not intended to provide any specific investment advice. Before making any investment decision, we strongly recommend that you conduct independent research and analysis and make an informed decision based on your personal financial situation, investment objectives, and risk tolerance.
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