Legendary Investor Charlie Munger: A Life of Wit and Wisdom
Charlie Munger, the renowned investor and longtime partner of Warren Buffett, remained optimistic about Berkshire Hathaway’s future prospects despite not making a deal with his lifelong friend.
## A Lasting Legacy
Munger, who passed away at the age of 99, believed that Berkshire Hathaway, with nearly $160 billion in cash, will eventually find a substantial investment opportunity.
Speaking in an interview conducted shortly before his death, Munger highlighted the conglomerate’s financial strength, noting their $160 billion cash reserve and excellent credit rating. He emphasized the need for a significant investment opportunity, stating that despite previous deals, they were now of a size where anything too small would not have a significant impact.
## The Search for an Elephant
Berkshire Hathaway held a record level of $157.2 billion in cash and has been looking for an “elephant-sized acquisition” for years. While previous acquisitions, such as Alleghany Corp. for $11.6 billion and Dominion Energy’s natural gas assets for almost $10 billion, have significantly expanded Berkshire’s portfolio, they have not quite met the lofty expectations for an “elephant-sized” deal.
## Passing the Baton
Munger expressed hope for the conglomerate’s future, suggesting that the next generation of leaders may be the ones to execute such a massive deal. He mentioned several potential successors, including Greg Abel, Berkshire’s vice chairman of non-insurance operations, Ajit Jain, vice chairman of insurance operations, and Buffett’s two investing lieutenants, Ted Weschler and Todd Combs. Despite this, he noted that it may also be someone not yet identified.
## A Cash Powerhouse
The significant cash reserve had been a cause for concern in times of low interest rates, but current market conditions have allowed Berkshire to earn substantial returns from their cash holdings. Munger always defended Berkshire’s conservative approach, emphasizing the value of biding their time and patiently waiting for a good investment opportunity.
## A Lasting Legacy
Munger was known for his wit and wisdom, often seeing the virtue of sitting on the sidelines and letting cash grow. His optimism about Berkshire Hathaway’s future under the leadership of the next generation reflects his enduring legacy. With a massive cash reserve at their disposal and a solid future outlook, Berkshire Hathaway remains poised for continued success.
