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Musing on Munger: 7 Time-Tested Traits of Savvy Business Mogul, Charlie Munger

Musing on Munger: 7 Time-Tested Traits of Savvy Business Mogul, Charlie Munger

February 27, 2024

Charlie Munger was a Harvard-educated lawyer, billionaire investor, money manager, and partner to legendary investor and investment manager Warren Buffett, the Chairman and CEO of Berkshire Hathaway. By following certain traits, Munger had already accumulated a significant fortune before ever joining Berkshire Hathaway. He would use these values to preserve his and his client's wealth through over fifty years of market volatility. Here are some of the characteristics of Charlie Munger that you can adopt in your own life.

 

Great listener

Investments full time. In time, Munger took his advice and formed his investment firm, which, according to Buffett, generated returns of 19.8% from 1962 to 1975. Eventually Buffett and Munger would team up and build Berkshire Hathaway into the force it is today. Munger was already doing well in life, however, taking the time to listen to someone with a different set of skills and knowledge base helped to propel him to the top of the financial world.

 

Forward-thinker

When Munger teamed up with now legendary billionaire investor Warren Buffett, the popular value investing method was seeking out decent businesses with shares at a great price. Munger, however, thought this approach was lacking and instead pursued the concept of “forget what you know about buying fair businesses at wonderful prices; instead, buy wonderful businesses at fair prices.” Munger didn’t just run with the herd; he thought things out for himself and made his own calculated decisions.

 

Patient

When it comes to value investing, patience is essential. Munger believed that being patient and letting time work for you was the way to approach value investing and help mitigate some of the risks associated with investing. He was adamant about making the conscious effort never to interrupt the power of compounding, if possible. Let your money work for you.  

 

Frugal

Frugality amongst the ultra-wealthy is not the most common trait. However, when it came to billionaire Charlie Munger, living a frugal life was the chosen lifestyle. Instead of spending his golden years in a mega-mansion, Munger spent his life “avoiding traps,” like fancy expensive homes, and lived in the same modest house for 70 years. He was so opposed to unnecessary spending of money that his partner, Warren Buffett, once said, “His (Munger’s) idea of traveling in style is an air-conditioned bus, a luxury he steps up to only when bargain fares are in effect.”

 

Ethical

Munger believed that conducting his business with high ethical standards was fundamental to his ability to generate positive returns. He liked to say, “Good businesses are ethical businesses. A business model that relies on trickery is doomed to fail.”

 

Always learning

A voracious reader of biographies and autobiographies of people with great minds like Samual Johnson and Ben Franklin, Munger embraced continuously learning and acquiring wisdom. This habit is common among many of the world’s high performers.

 

Open to help and advice – Charlie Munger would run ideas by Warren Buffett and his earlier real estate partner Otis Booth, and they would discuss the impact of decisions on their strategy. Munger was open to seeking advice and help when he needed it. He was a highly proficient investor and money manager and sought help from those around him whom he trusted. It would help if you also considered consulting a financial professional to help you create goals, design strategies for managing your risk, and ensure your decisions align with your financial goals.

 

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

 

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

 

Sources:

Charlie Munger, investing sage and Warren Buffett's confidant, dies (cnbc.com)

Charlie Munger: There's no big secret to financial success, longevity (cnbc.com)

Warren Buffett Hails These Charlie Munger Qualities - Why Berkshire Stock Can Still Thrive | Investor's Business Daily (investors.com)

5 Successful Qualities of Buffett, Graham, Munger and How to Acquire Them | Old School Value

 

This article was prepared by LPL Marketing Solutions

 

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