Charlie Munger Case Study

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Charlie Munger Biography
Charles T Munger was born on January 1st 1924 in Omaha Nebraska. Charlie first gained a degree in Mathematics from the University of Michigan before going to Harvard and gaining a Law degree in 1948. In 1965 Charlie decided that he would leave the law profession to pursue a career in managing investments. Charlie’s investment partnership was very successful achieving a compounding rate of return of 19.8% from 1962-1975, in other words $1000 invested in 1962 would be worth $10,470 in 1975 (compared to the Dow Jones which had an average compound rate of return of 4.9%).
After wrapping up his investment partnership Charlie was introduced by a mutual friend to Warren Buffett, a meeting which would be the beginning of the
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Second he decides whether or not the business has the intrinsic characteristics which will produce a sustainable competitive advantage. Berkshire recently invested in Chinese electric car company BYD which Charlie believes is destined to succeed. The business sells cars to a Chinese market where people are being killed in cities by the toxic air produced by traditional cars. BYD represents a solution to this issue and also a general trend towards electric cars to reduce emissions, a trend which will only be reinforced by regulating bodies. The third consideration is the management, which must be both talented and have integrity. These two factors are key for Charlie in determining whether or not the business can succeed into the future, a challenge for any business made more important to Charlie as he does not buy a business with the intention of selling it. Finally the business must be selling for a fair price as paying a huge premium can eat up the benefit of any real growth in the …show more content…
This stems from Charlie’s observation of “so many idiots getting rich in easy business”, so why couldn’t he? Berkshires first purchases with this philosophy were American Express on the stock market and See’s Candies as a whole business.
In conclusion Charlie Munger is a truly extraordinary individual with a track record to match. The key aspect which I believe is the foundation for Charlie’s success is his hunger for knowledge. His intensive reading habits have established a huge base of knowledge which Charlie has at his disposal. This knowledge can be used across different contexts providing a unique perspective and a greater level of understanding, when applied to studying businesses this has proved

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