Charlie Munger & Warren Buffet

Berkshire Hathaway

Excerpt from the The Globe & Mail Dec 1, 2023

The ancient Greek temple that was home to the Oracle of Delphi had a maxim inscribed upon its entrance. In golden letters was written: “Know Thyself.” Charlie Munger, the vice-chairman of Berkshire Hathaway who died this week, just shy of his 100th birthday, helped Warren Buffett turn that company into the greatest investment fund in human history by relentlessly following and elaborating upon the wisdom of that famous precept.

To be a successful investment manager, or a successful businessperson, you have to know accounting. And how to read an income statement and balance sheet. Yes, you have to understand finance. And the tax code.

But above all, Mr. Munger said, you have to know people. You have to accurately weigh the genius and folly, the potential and limits, of humans and their works. You have to see them – and the companies they’re running, the schemes they’re pitching, the dreams they’re dreaming – in a true light. You have to see through both marketing moonshine and sincerely held beliefs.

The result was a company unlike any other. Berkshire Hathaway is today a giant conglomerate with a market capitalization of nearly US$800-billion. That’s more than double the combined value of Canada’s Big Six banks. Yet Berkshire’s head office only has about 25 staff. That’s it.