SEATTLE – Mr Charles Munger, the alter ego, sidekick and foil to billionaire investor Warren Buffett for almost 60 years as they transformed Berkshire Hathaway from a failing textile maker into an empire, has died. He was 99.

He died on Nov 28 at a California hospital, the company said in a statement.

Mr Buffett said in the statement: “Berkshire Hathaway could not have been built to its present status without Charlie’s inspiration, wisdom and participation.”

A lawyer by training, Mr Munger (rhymes with “hunger”) helped Mr Buffett, who was seven years his junior, craft a philosophy of investing in companies for the long term.

Under their management, Berkshire averaged an annual gain of 20 per cent from 1965 through 2022 – roughly twice the pace of the S&P 500 Index.

Decades of compounded returns made the pair billionaires and folk heroes to adoring investors.

Mr Munger was vice-chairman of Berkshire and one of its biggest shareholders, with stock valued at about US$2.2 billion (S$2.9 billion). His overall net worth was about US$2.6 billion, according to Forbes.

At the company’s annual meetings in Omaha, Nebraska, where he and Mr Buffett had both grown up, Mr Munger was known for his roles as straight man and scold of corporate excesses.

“It’s terrific to have a partner who will say, ‘You’re not thinking straight’,” Mr Buffett said of Mr Munger, seated next to him, at Berkshire’s 2002 meeting. (“It doesn’t happen very often,” Mr Munger interjected.)

Too many chief executives surround themselves with “a bunch of sycophants” disinclined to challenge their conclusions and biases, Mr Buffett added.

Beyond value

Mr Buffett credited Mr Munger with broadening his approach to investing beyond mentor Benjamin Graham’s insistence on buying stocks at a fraction of the value of their underlying assets.

With Mr Munger’s help, he began assembling the insurance, railroad, manufacturing and consumer goods conglomerate that posted nearly US$29 billion in operating profit in the first nine months of 2023.

“Charlie has always emphasised, ‘Let’s buy truly wonderful businesses’,” Mr Buffett told the Omaha World-Herald in 1999.

That meant businesses with strong brands and pricing power.

Mr Munger nudged Mr Buffett into acquiring California confectioner See’s Candies in 1972.

The success of that deal – Mr Buffett came to view See’s as “the prototype of a dream business” – inspired Berkshire’s US$1 billion investment in Coca-Cola stock 15 years later.

The acerbic Mr Munger so often curbed Mr Buffett’s enthusiasm that Mr Buffett jokingly referred to him as “the abominable no-man”.

Outspoken critic

Mr Munger was an outspoken critic of corporate misbehavior, faulting as “demented” and “immoral” the compensation packages given to some chief executives.

He called Bitcoin “noxious poison”, defined cryptocurrency generally as “partly fraud and partly delusion” and warned that much of banking had become “gambling in drag”.

A long-time Berkshire investor and CEO of Smead Capital Management, Mr Cole Smead, said: “I love his ability to just cut to the heart of things and not care how he says it… In today’s society, that’s a really unique thing.”

Though Mr Munger aligned with the US Republican Party, and Mr Buffett sided with Democrats, the two often found common ground on issues like the desirability of universal healthcare and the need for government oversight of the financial system.

But while Mr Buffett would tour the world urging billionaires to embrace charity, Mr Munger said a private company like Costco Wholesale Corp – he served on its board for more than two decades – did more good for society than big-name philanthropic foundations.

From Alaska to Harvard

Mr Munger’s initial brush with the Buffett family came through his work on Saturdays at Buffett and Son, the Omaha grocery store run by Mr Ernest Buffett, Mr Warren Buffett’s grandfather.

But the two future partners would not meet until years later.

Mr Munger entered the University of Michigan at age 17 with plans to study mathematics, mostly because it came so easily.

In 1942, during his sophomore year, he enlisted in the Army Air Corps, soon to become the Air Force.

He was sent to the California Institute of Technology to learn meteorology before being posted to Nome, Alaska.

It was during this period, in 1945, that he married his first wife, Ms Nancy Huggins.

Lacking an undergraduate degree, Mr Munger applied to Harvard Law School before his army discharge in 1946.

He was admitted only after a family friend and former dean of the school intervened. Mr Munger worked on the Harvard Law Review and in 1948 was one of 12 in the class of 335 to graduate magna cum laude.

With his wife and their son Teddy, Mr Munger moved to California to join a Los Angeles law firm.

They added two daughters to their family before divorcing in 1953.

In 1956, Mr Munger married Ms Nancy Barry Borthwick, a mother of two, and over time they expanded their blended family by having four more children.

Not satisfied with the income potential of his legal career, Mr Munger began working on construction projects and real estate deals.

He founded a new law office, Munger, Tolles and Hills, and, in 1962, started an investment partnership, Wheeler, Munger and Co, modelled on the ones Mr Buffett had set up with his earliest investors in Omaha.

“Like Warren, I had a considerable passion to get rich,” Mr Munger said in the book Buffett: The Making Of An American Capitalist, published in 1995. “Not because I wanted Ferraris – I wanted independence. I desperately wanted it. I thought it was undignified to have to send invoices to other people.”

1959 introduction

His fateful introduction to Mr Buffett had come during a 1959 visit home to Omaha. Though the precise venue of their first meeting was the subject of lore, it was clear they hit it off right away. In short order, they were talking on the telephone almost daily and investing in the same companies and securities.

Their investments in Berkshire Hathaway began in 1962, when the company made men’s suit linings at textile mills in Massachusetts.

Mr Buffett took a controlling stake in 1965.

Though the mills closed, Berkshire stuck around as the corporate vehicle for Mr Buffett’s growing conglomerate of companies.

A crucial joint discovery was a company called Blue Chip Stamps, which ran popular redemption games offered by grocers and other retailers. Because stores paid for the stamps upfront, and prizes were redeemed much later, Blue Chip at any given time was sitting on a stack of money, much like a bank does.

Using that pool of capital, Mr Buffett and Mr Munger bought controlling shares in See’s Candies, the Buffalo Evening News and Wesco Financial, the company Mr Munger would lead.

In 1975, the US Securities and Exchange Commission alleged that Blue Chip Stamps had manipulated the price of Wesco because Mr Buffett and Mr Munger had persuaded its management to drop a merger plan.

Blue Chip Stamps resolved the dispute by agreeing to pay former investors in Wesco a total of about US$115,000, with no admission of guilt.

The ordeal underscored the risks in Mr Buffett and Mr Munger having such complicated and overlapping financial interests.

A years-long effort to simplify matters culminated in 1983 with Blue Chip Stamps merging into Berkshire. Mr Munger became Mr Buffett’s vice-chairman.

China bull

Mr Munger was for many years more bullish than Mr Buffett when it came to investing in China.

Berkshire became the biggest shareholder of Chinese automaker BYD, for instance, years after Mr Munger began buying its stock, though Berkshire began trimming that stake in 2022.

Mr Munger started sharing his vice-chairman title at Berkshire in 2018 with two next-generation senior executives, Mr Greg Abel and Mr Ajit Jain, who were named to the board in a long-awaited sign of Mr Buffett’s succession plans.

Mr Buffett subsequently identified Mr Abel as his likely successor.

It was Mr Munger who, three years earlier, had signalled the likely promotion of Mr Abel and Mr Jain, with praise delivered in his signature fashion: with a backhanded swipe at the boss.

“In some important ways,” he wrote of the pair in 2015, “each is a better business executive than Buffett.” BLOOMBERG