Warren Buffett Pays Tribute to Charlie Munger, Architect of Berkshire Hathaway
Warren Buffett, the CEO of Berkshire Hathaway, recently penned a heartfelt tribute to his longtime business partner and friend, Charlie Munger, who passed away in November at the age of 99. In his first annual letter to shareholders since Munger’s death, Buffett described Munger as the “architect” of Berkshire Hathaway and praised his role in shaping the company into what it is today.
Buffett compared their partnership to that of an older brother and a loving father, highlighting Munger’s selfless nature and his willingness to let Buffett take the credit for their joint achievements. “Even when he knew he was right, he gave me the reins, and when I blundered he never – never – reminded me of my mistake,” Buffett wrote.
Munger’s influence on Berkshire Hathaway was undeniable, according to Buffett. He likened Munger to an architect, emphasizing that while the construction crew may be recognized for their work, it is the architect who deserves credit for the design and vision. “Berkshire has become a great company. Though I have long been in charge of the construction crew; Charlie should forever be credited with being the architect,” Buffett stated.
In his letter to shareholders, Buffett also urged investors to focus on Berkshire’s operating earnings rather than bottom-line figures that include investments. He explained that Berkshire prefers to exclude unrealized capital gains or losses from their financial reports, as these figures can fluctuate greatly and may not accurately reflect the company’s performance.
Buffett expressed his reservations about Berkshire’s stock price, acknowledging that the company’s massive size limits its potential for extraordinary growth. He noted that there are only a few companies capable of significantly impacting Berkshire’s performance, and these opportunities have been thoroughly explored by both Berkshire and other investors.
However, Buffett assured shareholders that Vice Chairman Greg Abel, his designated successor, is fully prepared to take over as CEO if needed. He expressed confidence in Abel’s abilities and stated that he is ready to lead Berkshire Hathaway.
Charlie Munger’s passing marked the end of an era for Berkshire Hathaway. Buffett acknowledged Munger’s immense contributions to the company’s success, describing him as an inspiration, a wise advisor, and an active participant in its growth. Munger’s legacy extends beyond Berkshire Hathaway; he was also a real estate attorney, chairman and publisher of the Daily Journal Corp., a member of the Costco board, a philanthropist, and an architect.
Warren Buffett’s tribute to Charlie Munger serves as a reminder of the profound impact that a strong partnership can have on the success and growth of a company. Munger’s vision and wisdom will be remembered as integral to the development of Berkshire Hathaway, and his legacy will continue to inspire future generations of business leaders.