Nov 28 (Reuters) – Warren Buffett’s trusted confidant Charlie Munger died on Tuesday at the age of 99, leaving a void at Berkshire Hathaway ( BRKa.N ) that investors said was unlikely to be filled despite the conglomerate’s well-established succession plan.
Munger died peacefully at a hospital in California, where he lived, Berkshire said. No reason was given. Munger would have turned 100 on January 1.
“Berkshire Hathaway could not have been built to what it is today without Charlie’s inspiration, wisdom and participation,” Buffett, Berkshire’s 93-year-old chairman and chief executive, said in a statement.
The death of Munger, a Berkshire vice chairman since 1978, marked the end of an era in corporate America and investing.
Along with Buffett, Munger is respected and admired by investors around the world, many of whom flock to Omaha, Nebraska, during Berkshire’s annual shareholder weekend to hear the duo’s folk wisdom on investing and life.
Although Munger was not involved in Berkshire’s day-to-day operations, his death leaves Buffett without a long-term sounding board.
Even though Berkshire has installed managers who can be trusted to keep the company going, Munger’s loss will be felt deeply and prompted an outpouring of grief, investors said.
“It’s a shock,” said Thomas Russo, a partner at Gardner Russo & Quinn in Lancaster, Pennsylvania, and a longtime Berkshire shareholder. “This will leave a huge void for investors who have modeled their thoughts, words and actions around Munger and his insights.”
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Since becoming a Berkshire vice chairman, Munger has worked closely with Buffett on allocating Berkshire’s capital, and has never minced his words when he thinks his business partner is making a mistake.
“He was certainly one of the best investors on the team with Buffett,” said Rick Meckler, a partner at Cherry Lane Investments in New Jersey. “I’m sure it’s a huge loss for Buffett personally.”
Munger was known for steering Buffett away from buying what Buffett called “cigar buds” — mediocre companies that could be bought at very cheap prices by giving up smoke — instead favoring quality.
“Buying good businesses at fair prices and reinvesting the cash flow fit how he and Warren wanted to invest philosophically,” said Paul Lountzis, president of Lountzis Asset Management in Wyomissing. Pennsylvania. “They wanted to own the businesses forever.”
Money manager Whitney Tilson, who knew Munger personally, said “a generation of investment managers” learned some of their craft from Munger and Buffett.
“What we really like about these men is their advice to live a fulfilling life by advising people to think clearly, be honest with oneself, learn from mistakes and avoid disasters,” he said.
Tilson said he attended dozens of meetings held by the men, and Munger once joked to a private audience: “I wish I knew where I’m going to die so I never go there.”
The future of Berkshire
Berkshire is unlikely to relocate Munger and has not publicly discussed any need or desire to do so.
Two other vice presidents, Greg Abel and Ajit Jain, have day-to-day oversight of Berkshire’s non-insurance and insurance businesses, respectively.
Munger’s death comes a week after Buffett donated about $866 million in Berkshire stock to four family charities and, in the twilight of his own storied investing career, released a rare shareholder letter acknowledging that his own time was limited.
In a letter last week, Buffett said Berkshire was “built to last” and would be in good hands without him.
He has never publicly signaled a desire to step down, including after being diagnosed with prostate cancer in 2012.
“At 93, I feel better, but fully aware that I am playing extra innings,” Buffett wrote.
Under Berkshire’s succession plan, Munger casually noted at Berkshire’s 2021 annual meeting that Abel would remain chief executive once Buffett is no longer in charge.
Buffett’s son Howard will be the non-executive chairman, and one or two portfolio managers will handle the investments.
Berkshire’s businesses include BNSF Railroad, car insurance Geico, and energy, industrial and retail operations, as well as familiar consumer names such as Dairy Queen, Duracell, Fruit of the Loom and Cheese Candies.
It also has hundreds of billions of dollars in shares, led by Apple ( AAPL.O ).
Changes without Charlie
The most significant change to the public since Munger’s death will be the annual Berkshire Weekend, which draws tens of thousands of people to Omaha and is broadcast live around the world.
Munger will no longer be there to share the stage with Buffett and answer questions from dozens of shareholders over five hours.
Abel and Jain, who have answered those questions in recent years, may play a larger role.
“The Annual Meeting would never be the same without Charlie’s poignant, candid and honest comments,” said Lountzis. “He was so different from Warren that Charlie said what he thought and didn’t discount what other people thought.”
Russo added: “Berkshire might be a little funnier without him.”
Reporting by Jonathan Stempel in New York; Additional reporting by Lewis Krauskopf Svea Herbst-Bayliss and Chibuike Oguh; Editing by Megan Davies, Rosalba O’Brien and Lisa Schumacher
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