Warren Buffett
Business partner since 1959; Munger's closest intellectual collaborator for 60+ years
Biography
Warren Edward Buffett was born in Omaha, Nebraska, in 1930, the son of stockbroker and congressman Howard Buffett. He bought his first stock at eleven, filed his first tax return at thirteen, and ran a string of boyhood businesses — paper routes, pinball machines, a farmland tenancy — before he was out of his teens. After reading Benjamin Graham's The Intelligent Investor, he went to Columbia Business School specifically to study under Graham, graduated, worked briefly at Graham-Newman, and returned to Omaha in 1956 to launch the Buffett Partnership. Over thirteen years the partnership compounded capital at roughly 29.5% annually. In 1965 it took control of Berkshire Hathaway, a struggling New England textile mill that Buffett spent the next six decades converting into the most successful holding company in American history.
Buffett met Charlie Munger at an Omaha dinner in 1959, an introduction made by mutual friends who had noticed the similarity of their minds. Munger was then a practicing Los Angeles lawyer who also ran an investment partnership. The two recognized in each other the same intellectual temperament: compulsive reading, impatience with conventional wisdom, and a conviction that the quality of a business matters more than statistical cheapness. Munger became Vice Chairman of Berkshire in 1978 and sat beside Buffett at more than four decades of annual meetings, serving — by both men's accounts — as the partner most likely to say no.
Their professional division of labor was never contractual. Buffett ran the capital allocation and the public face; Munger supplied the multidisciplinary frame and the psychological discipline. What the record shows, in Munger's own telling, is that neither man stood still for sixty years: they kept learning, kept abandoning ideas that had stopped working, and kept each other honest.
Key Stories
The conversion from cigar butts to franchises. Buffett was trained by Graham to buy mediocre businesses at prices below liquidation value. Munger argued — first in conversation, then with the 1972 purchase of See's Candies at a premium to tangible assets — that a business with genuine franchise value was worth paying up for. Munger later framed the transition as pure continuing education: "It's amazing what Warren has done. Berkshire would be a very modest company now if Warren never learned anything." At the 2017 Daily Journal meeting he gave the concrete example: Berkshire eventually bought businesses like ISCAR at multiples of book value that the young Buffett, and Graham himself, would never have paid. "Ben Graham would have never bought ISCAR. He paid five times book or something for ISCAR. It wasn't in the Graham play[book], and Warren who learned under Graham, just, he learned better over time, and I've learned better."
The learning machine. Asked at the 2007 USC Law commencement what accounted for Berkshire's record, Munger did not cite intelligence, deal flow, or luck. He cited Buffett's reading habit and his capacity for continuous self-revision: without it, he said, the record "would have been absolutely impossible." Buffett's working day, in Munger's time-clock description, is roughly half spent "sitting on his ass and reading," and much of the rest talking one-on-one with highly gifted people who trust him and whom he trusts. Worldly success, Munger observed, looked remarkably academic up close.
Adapting when the easy game ended. Munger was unusually candid at the 2017 Daily Journal meeting about how the partnership's edge had changed: in the old days "what we did was shoot fish in a barrel," waiting until the fish slowed down before shooting. As competition eliminated the obvious bargains, Buffett changed his methods — buying Exxon as a cash substitute, then airlines and Apple, two categories the pair had publicly mocked for decades. "I don't think we've gone crazy," Munger said. "I think the answer is we're adapting reasonably to a business that's gotten very much more difficult."
Impact on Munger's Work
The Buffett partnership was the vehicle through which nearly everything Munger believed got tested at scale. Three impacts stand out.
First, Buffett gave Munger's qualitative theories a fifty-year laboratory. The latticework-of-models approach, the insistence on staying within a circle of competence, the preference for durable competitive advantage over cheapness — all of these were arguments Munger made in conversation long before he made them in speeches, and Buffett was the audience that mattered. The See's Candies precedent became the canonical proof that Munger's version of quality investing could outperform the pure statistical method.
Second, Buffett was Munger's standing proof that extreme commercial success and ethical integrity are compatible. Munger returned to this point constantly: the "big strong fiduciary gene," the care for shareholders who trusted them when they were young and unproven, the loyalty that outlasted the original shareholders' lifetimes. In Munger's value system — where character is a compounding asset — Buffett was the Exhibit A he could always reach for.
Third, the partnership structured Munger's own intellectual output. The annual meeting format, the shareholder letters he read and influenced, and the Wesco and Daily Journal meetings he chaired in parallel all existed because Berkshire existed. Munger's speeches assume the Berkshire record as their evidentiary base; without Buffett's execution, the speeches would be philosophy without demonstration.
Key Passages From Munger's Speeches and Letters
"Without Warren Buffett being a learning machine, a continuous learning machine, the record would have been absolutely impossible."
"And if you take Warren Buffett and watched him with a time clock, I would say half of all the time he spends is sitting on his ass and reading. And a big chunk of the rest of the time is spent talking one on one either on the telephone or personally with highly gifted people whom he trusts and who trust him. In other words it looks quite academic all this worldly success."
"If you look at Berkshire Hathaway and all of its accumulated billions, the top ten insights account for most of it. And that's with a very brilliant man—Warren's a lot more able than I am and very disciplined—devoting his lifetime to it."
"Well, Warren is not only a very good thinker and a good learner, which is important, but Warren has a big strong fiduciary gene. He cares about what happens to the shareholders."
Referenced In
Source: Charlie Munger Knowledge Base — Munger speeches, Wesco Financial annual letters, DJCO annual meeting transcripts