Warren Buffett and Charlie Munger – Lessons Learned

Warren Buffett and Charlie Munger – Lessons Learned

Warren Buffett, chairman and CEO of Berkshire Hathaway, is one of the most successful business leaders and investors of all time. He has a net worth of over $100 billion. Berkshire Hathaway owns over 60 companies. His vision and great leadership have made him successful, but even Warren Buffett has had to learn things over time. One person who has made an impact on Warren Buffett, and who Buffett has learned from, is Charlie Munger, his co-chairman at Berkshire Hathaway since 1978.

Lessons Buffett Learned from Munger
  1. No Cigar-Butt Investing. Munger taught Buffett to look for long-term investments – companies that would be successful for a long period of time, rather than those that might have “one puff left in the cigar.” This pivot in strategy was a key move toward the growth and tremendous success of Berkshire Hathaway. Had Buffett not learned this lesson, he probably would not be where he is today.
  2. Short term investing is hard – long term investing is not. It is much easier to predict what will happen in the long term because you can follow patterns and history to glean information. You also have the advantage of time, and the potential to react at the right time, rather than being tied to a short-term goal that must occur at a specific time. Buffett said in an interview “if I knew how to double my money tomorrow, I would probably invest in the short term too. It’s much easier to invest for the long term because you know with a very high probability what’s going to happen 10 and 20 years from now in a major way. And I don’t have the faintest idea what’s going to happen tomorrow or next week.”
  3. Wait for your pitch. When you wait for your pitch, no one calls a strike in investing and there is no “three strikes and you’re out” rule. You can wait as long as you want in investing for the right company to come along and then swing. Buffett said “I can sit there all day and somebody can throw me one company after another and, finally, I’m gonna get one in my sweet spot.”
  4. Worldy wisdom investing. Knowledge is the key to investing. Know a lot about a lot so that you can understand the ins and outs of a company before you invest. If you know finance, learn engineering so you can understand a product. If you’re an engineer, learn about accounting. A broad knowledge base allows you to see the big picture.
Warren and Charlie – A Friendship

The pair have been friends for over 60 years and have worked together for over 40, and they reportedly have never had an argument. They disagree sometimes, but they have respect for each other above all. Warren says that he always learns something when he is around Charlie. This open-mindedness is why their business relationship is so successful, and why they also enjoy working together. Buffett said “We’ve got an extremely good partnership and business is more fun — just as life is more fun — with a good personal partner and to have great business partner. You know it’s just — we’ve accomplished more but we’ve also had way more fun.”

This speaks to the fact that they don’t let egos get in the way of making great business decisions. Neither is always right, and they listen to each other and learn from each other. Warren Buffett is known as the “oracle of Omaha” and viewed as an investing genius by most, but he is living proof, at 90, that learning is a lifelong process. Had he not learned from Charlie Munger, Berkshire Hathaway would not be the mega-success that it is today.

At C-Suite IMPACT We Believe in Always Learning

At C-Suite, we admire Warren Buffett’s willingness to learn from his friend and partner, and we admire Munger’s sharing of wisdom. We want to be a part of your leadership team to teach you and learn from you so that together we can achieve all of your business goals.  We have a suite of business resources in our portfolio that you can access for all of your business needs and build the value of your business. Contact us today to learn more.

Tom Thibodeau – Secrets of Success
The Role of the CFO in Strategic Planning

Leave a Reply

Your email address will not be published. Required fields are marked *