Buffett has always been known as the "god of stocks" and is one of the most profitable people in the world, but many people do not know that Buffett can have the current achievements, and the man behind him has played a crucial role, he is Charlie Munger.
Over the past few decades, the two have teamed up to create the best investment record ever, with Berkshire's stock price rising from $19 to $327,000 per share, creating an investment myth of an average annual compound yield of 20.3%.
Buffett also often said bluntly in front of the media: "It was Charlie who made me quickly evolve from an orangutan to a human, otherwise I would not be where I am today!" ”
In 1948, at the age of 24, Charlie Munger graduated laude from Harvard Law School, and after graduation, he entered the California court as a lawyer and began investing in securities and real estate. In 1959, the year Munger was 34 and Buffett was 29, and the two met at a banquet and saw each other at the same time. Since then, a legend has begun.
Munger is a well-known business lawyer in Los Angeles, although he does not have much money, but because of his work relationship, he knows a lot of high-class people. So he introduced his clients to Buffett.
Because of the good reputation that has been established over the years, these customers have great trust in him, and many of them have entrusted their money to Buffett, allowing Buffett's investment fund to rise from hundreds of thousands of dollars to millions of dollars.
It can be said that Munger took Buffett's career to a new level, bringing him from the isolated Plains of Nebraska to the rich California coast.
But the greater help was Munger's inspiration for Buffett's thinking. Before meeting Munger, Buffett was a big believer in Graham's investment philosophy. The core philosophy of Graham's investments is: pick up cigarette butts. Picking up cigarette butts, as the name suggests, is to pick up cigarette butts that others have not smoked, and these discarded cigarette butts often have the value of smoking the last sip. This theory influenced early Buffett, manifesting itself in buying ordinary companies at a cheap price.
Munger believes that instead of buying ordinary companies at a cheap price, it is better to buy excellent companies at a reasonable price. He believes that there is huge room for profit to acquire high-quality companies, and "the difference between a well-qualified company and a surviving company is that the former makes decisions easily one after another, while the latter always encounters painful choices."
Munger differs from Graham in that the former buys sustainable companies while the latter buys companies in crisis.
As a result, Buffett completed the most important conceptual transformation of his investment career, and only then did he have the investment myth of the stock god. In 1972, Buffett and Munger used the float of blue-chip prints to buy Heshi Candy for 25 million, and the sales of Heshi Candy that year were 16 million pounds, and in 2007, it sold 31 million pounds, an average annual growth rate of about 2%.
In 1988, Buffett and Munger spent another $1.02 billion to buy Shares in Coca-Cola, or 7 percent of Coca-Cola's share capital. Since Buffett bought Coca-Cola in 1988, he has not sold a single share and has held it until now. In 1998, Coca-Cola's market value had exceeded $150 billion, bringing Buffett more than 10 times the benefits.
Later, Buffett commented: "Graham taught me to buy bargains, and Munger pushed forward the investment direction of not just buying bargains, and he expanded my horizons with extraordinary strength." ”
For Munger, Buffett is the guide and Bole of life.
Before meeting Buffett, Munger was just a $30-an-hour lawyer. With Buffett's encouragement and leadership, he also began his investment career. They first run their own investment companies, but they will cooperate on many projects, such as blue chip printing, Hesis Candy, Wesker Financial Company and other large projects, all of which are very profitable.
Later, the two simply got together, merged all their assets into Berkshire Hathaway, a textile company buffet buffett bought, and together turned the business into an investment company. In 1978, Munger served as vice chairman of Berkshire's board of directors. Since then, he has been called "Buffett's right hand" by the world.
Everyone was amazed that the arrogant Munger would condescend to be a deputy. But Munger said: "I don't have a particularly unquenchable self-esteem." There's always someone who's better than you in some way. You should learn to play all the roles as a person, and you can have different identities in front of different people.
Today, Munger and Buffett have been together for more than 60 years, in addition to the investment myths they created together, the enviable friendship is also passed down as a good story.