Before Warren Buffett and Charlie Munger rose to prominence as iconic business partners and ran the Berkshire Hathaway empire, they were just two guys from Omaha, Nebraska who apparently were very similar.
They discovered this thanks to a well-known doctor in town, Dr. Edwin Davis, who told Buffett in a 1957 meeting that he trusted him to manage money because the investor reminded him of someone named Charlie Munger.
“Well, I don’t know who Charlie Munger is, but I like him,” replied Buffett Davis, the investment legend recalled in an interview with CNBC’s Becky Quick that aired as part of a special on Tuesday: “Buffett & Munger: A wealth of wisdom. “
Berkshire Hathaway CEO Warren Buffett (L) and Vice Chairman Charlie Munger attend the 2019 Annual General Meeting in Omaha, Nebraska, on May 3, 2019.
Johannes Eisele | AFP | Getty Images
Davis and his wife, Dorothy, are committed to eventually connecting Buffett and Munger, Buffett said. It happened at dinner two years later, in 1959, when Munger, then a lawyer in Los Angeles, was back in Omaha after the death of his father Alfred.
“After about five minutes, Charlie rolled over on the floor and laughed at his own jokes, which is exactly the same thing I did,” said Buffett, 90. “I thought, ‘I won’t find another guy like this. ‘ And we just got it. “
“We got on well,” said Munger, 97, and added, “What I like about Warren is the disrespect. We don’t have automatic awe of the pompous minds of all civilization.”
Their friendship and business relationship blossomed from then on as Buffett continued to build his investment firm and Munger rightly toiled.
In the early 1960s, Munger said he had finally followed Buffett’s advice about his career path. “It took me a long time to understand that [Buffett] had a better way of making a living than me. But he finally convinced me that I was wasting my time. “
Munger started his own investment firm, which averaged 19.8% annual compound interest between 1962 and 1975, far better than the 5% Dow Jones Industrial Average over that period, according to Buffett’s famous 1984 essay, The Superinvestors, by Graham- and-Doddsville. “
Buffett said he remembered long phone calls with Munger at the time. Munger added, “We had fun in the early days because it was like hunting expeditions.”
Buffett began buying shares in Berkshire Hathaway in 1962, eventually taking control of the company three years later and growing it into the influential conglomerate it is today. He is chairman and CEO.
In 1978 Munger became vice chairman of Berkshire Hathaway, a position he still holds.
“I knew immediately that Charlie was the guy I would like and learn from,” Buffett said of their first meeting. “You know, it wasn’t anything calculated, no decision or anything like that. It was natural. And we had nothing but fun. “