What was the background of Charlie Munger and Warren Buffett's first meeting, and what similarities did they share in their values?

The Background of Charlie Munger and Warren Buffett's Meeting and Their Shared Values

First Meeting: A Dinner That Changed History

Charlie Munger and Warren Buffett first met in 1959 in Omaha, USA. Though both grew up in Omaha and had even worked together at Buffett’s grandfather’s grocery store, their age difference prevented a close childhood friendship.

Their formal introduction was orchestrated by a mutual friend—Dr. Edwin Davis of Omaha. Davis, an early investor in Buffett’s ventures, deeply admired Buffett’s talent and was also a friend of the Munger family. At the time, Munger was a successful lawyer who had returned from California to Omaha to settle his father’s estate.

Convinced these two brilliant minds would instantly connect, Davis arranged a dinner. That evening, Buffett and Munger hit it off immediately, discovering striking similarities in their thinking and sense of humor. Buffett later described meeting Munger as "looking in a mirror" and encountering "a better version of myself." They talked through the night, marking the beginning of a 60-year friendship and partnership that would build the Berkshire Hathaway empire.

---

Shared Values: The Cornerstones of the Berkshire Empire

The extraordinary success of Munger and Buffett’s collaboration stems from their deeply aligned core values, which form the bedrock of their investment philosophy and lives.

• 1. A Shared Belief in Value Investing

  • Both were disciples of Benjamin Graham’s value investing theory, believing that investing is fundamentally about "buying partial ownership of a company at a price below its intrinsic value."
  • However, Munger’s influence on Buffett was pivotal. He pushed Buffett to evolve from Graham’s "cigar butt" approach (seeking cheap but mediocre companies) to "buying wonderful companies at fair prices." This became the core evolution of their investment philosophy.

• 2. Extreme Rationality and Objectivity

  • Both emphasized eliminating emotional interference in investment decisions, relying instead on rationality and rigorous analysis.
  • Munger championed the "Latticework of Mental Models"—applying frameworks from diverse disciplines (e.g., psychology, physics, biology) to analyze problems, avoid cognitive biases, and make objective judgments.

• 3. Sticking to the "Circle of Competence"

  • They firmly believed investors should only operate within domains they thoroughly understand. They unhesitatingly avoided industries or companies outside their circle of competence, reflecting their intellectual honesty.

• 4. Long-Termism and a Business Ownership Mindset

  • They never viewed stocks as tradable slips of paper but as ownership certificates in businesses. Their ideal holding period was "forever," focusing on long-term profitability and competitive advantages rather than short-term market fluctuations.

• 5. Integrity and Trust are Paramount

  • Whether selecting investments or collaborating with subsidiary managers, they prioritized integrity and character. Berkshire Hathaway’s unique "hands-off" management model was built on deep trust in its CEOs.

• 6. A Thirst for Lifelong Learning

  • Both were "learning machines," maintaining voracious reading habits throughout their lives. They believed knowledge compounds over time, enabling better decisions. Munger famously stated, "In my whole life, I have known no wise people who didn’t read all the time."

• 7. Humility and Frugality

  • Despite immense wealth, both lived relatively modestly, embodying the Midwestern pragmatism and humility of their roots. They prioritized efficient capital allocation over personal luxury.