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Berkshire Hathaway CEO Warren Buffett wrote in his annual letter that Charlie Munger is the company’s “architect” and he is the “general contractor.” Johannes Eisler/AFP via Getty Images
In his first annual letter to shareholders since Charlie Munger’s death, Warren Buffett praised his longtime partner as the “architect” of Berkshire Hathaway.
Munger, who died in late November, became the group’s vice chairman in 1978. But long before that, he was providing key advice on the company’s operations.
Buffett wrote that in 1965, Munger told him to “stop buying companies like Berkshire,” but now that he has control of the company, “add to it good businesses that are bought at fair prices and Give up buying fair businesses at great prices.”
Buffett followed his instructions.
Buffett wrote that after Munger joined Berkshire, “he brought me back to my senses many times when my old habits surfaced.” “He continued in this role until his death, and together we, along with those who invested with us early on, ended up with better results than Charlie and I could have ever dreamed of.”
In addition to advising Buffett, Munger made key decisions that drove Berkshire’s success. A year ago, he said his best decision was to invest in Chinese automaker BYD, which recently surpassed Tesla in global electric car sales.
After backing BYD at Munger’s urging, Berkshire saw the value of its 2008 investment in the automaker soar from $230 million to $9.5 billion 14 years later.
“I’ve never done anything as good as BYD in Berkshire,” Munger said at the annual meeting of the company, where he serves as a director.
Munger is also known for his colorful language and candid remarks. He called Bitcoin “rat poison” and compared other cryptocurrencies to a “venereal disease.” Last year, he was in ” wall street journal The federal government should ban the entire industry and describe cryptocurrency as “a gambling contract with a nearly 100% house edge.”
Buffett said Munger’s role at Berkshire was far more important than most outsiders realize.
“In effect, Charlie is the ‘architect of what is now Berkshire,’ and I serve as the ‘general contractor’ executing the day-to-day construction of his vision,” Buffett wrote.
He added: “Charlie never tried to take credit for his role as a creator, but rather asked me to take a bow and accept the credit. In a way, his relationship with me was half brother, half loving father. Even though He knew he was right, but he still gave me control, and when I made a mistake, he never—never—reminded me of my mistake.”
Later in the letter, Buffett lamented the lack of worthy acquisition targets, noting that the “few” U.S. companies that could make a difference to Berkshire “have been endlessly selected by us and others.”
At the same time, however, Berkshire’s cash reserves grew to a record $167.6 billion in the fourth quarter.
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