”Stock God” best partner Charlie Munger passed away at the age of 99_Dagong.com

Picture: Buffett (right) and Munger are the closest business partners. Information pictures

[Ta Kung Pao News]Comprehensive reports from the New York Times, the Associated Press, and the Wall Street Journal: “Stock God” Buffett’s long-term partner and the famous American investment guru Charlie. Munger died in a California hospital on the morning of the 28th at the age of 99. In the investment circle, “Buffett + Munger” is regarded as the “golden combination”. The investment company Berkshire Hathaway founded by the two in the mid-20th century has achieved brilliant investment results over the years. Munger is optimistic about China’s economic prospects in the long term and has obtained huge returns by investing in BYD and other Chinese companies. Munger said at the end of last month that China’s economy has better prospects than almost any other large economy in the next 20 years.

Berkshire Hathaway issued a statement on Tuesday saying that Charlie Munger, vice chairman of Berkshire Hathaway’s board of directors, passed away peacefully in a California hospital that morning, just over a month before his 100th birthday on January 1 next year. The statement did not specify the specific cause of Munger’s death. Buffett later issued a statement saying: “Without Charlie (Munger’s) inspiration, wisdom and involvement, Berkshire Hathaway would not be where it is today.”

In the investment circle, Munger and fellow countryman Buffett are regarded as master-level “golden partners”. They successfully transformed Berkshire County from a textile factory on the verge of bankruptcy into a global investment giant. Munger prefers to stay behind the scenes and let Buffett represent the company. Munger has always downplayed his contribution to the company, but Buffett praised him highly and said he pushed him to change his early investment strategy.

Secret to success: avoid making mistakes

Munger, a lawyer by training, helped Buffett establish the concepts of long-term investment and value investment. Berkshire Hathaway’s investments are mainly long-term. For example, it has invested in the Washington Post for more than 40 years, Coca-Cola for nearly 30 years, and Wells Fargo for 24 years. Under the leadership of Munger and Buffett, Berkshire Hathaway’s average annual return from 1965 to 2022 was 20%, far exceeding the performance of the S&P Index during the same period. Munger recommends that investors choose high-quality companies that are easy to understand, have durable competitive advantages and excellent management teams at the right price for long-term investment, rather than over-diversifying their investments.

Munger favors traditional assets and is critical of cryptocurrencies and artificial intelligence (AI) that have become popular in recent years. He believes that cryptocurrency is a destabilizing and unproductive financial invention and that buying Bitcoin is the “stupidest investment.” Earlier this year, he called on the U.S. government to legislate to ban cryptocurrencies. As for AI, Munger believes that it has received more attention than its actual value and there is a problem of over-hyping.

Munger and Buffett have created many investment legends together. Therefore, Berkshire Hathaway’s annual shareholder meeting in Omaha, Nebraska, attracts 40,000 people and is regarded as a pilgrimage for global investors. Although Munger has required a wheelchair to travel in recent years, he is still quick-thinking and sharp-tongued. At the shareholders’ meeting in May this year, he and Buffett answered 60 questions from shareholders around the world in more than five hours. Earlier this month, Munger summed up the company’s secret to success in an interview with US media: avoid mistakes and still work well with Buffett even in his 90s. “We’re a little less crazy than most people; we’re a little less stupid than most people. That really helps us,” he said.

“China’s economic prospects are the best in the next 20 years”

The 99-year-old investment guru spoke highly of China. Since 2002, Munger has used his insights into the Chinese economy to invest in different Chinese companies, including China Merchants Bank, BYD and Alibaba, through Berkshire Hathaway and his own investment company Daily Journal Corp. Berkshire decided to invest in BYD in 2008, and Munger was a key figure. This investment was initially worth HK$1.8 billion. As of the end of October this year, Berkshire held approximately 7.98% of BYD’s shares, with a current value of HK$18.54 billion.

At the Berkshire Hathaway shareholders’ meeting in May this year, Munger even used three “stupid” words to describe any behavior that aggravates tensions between China and the United States. He said that the United States should get along well with China and conduct a large amount of free trade with China for the common benefit. Buffett also agrees with Munger. At the end of last month, Munger said that the Chinese economy has better prospects than almost any other large economy in the next 20 years, and that he is willing to “take some risks from Chinese companies” in his investment portfolio. In February last year, Munger said: “China is a modern big country. We have invested some funds in China on the grounds that in terms of corporate strength and security prices, more value can be obtained in China than in the United States.”