The Intelligent Investor: More Munger

June 18, 2024

The Intelligent Investor: More Munger

By Jason Zweig, The Wall Street Journal

Fellow investors,
I know many of you can't get enough of Charlie Munger, the brilliant Berkshire Hathaway vice chairman who died last November, just shy of his 100th birthday. Neither can I, so I recently attended a discussion on his life and legacy, hosted by the Museum of American Finance and Fordham University's business school.

Moderated by lawyer Larry Cunningham, the event featured three people who knew Munger well: Ron Olson, partner at the law firm Munger, Tolles & Olson; Don Graham, chairman emeritus of Graham Holdings; and Tom Gayner, CEO of the insurer Markel Group.

Before taking on your opponent in court, Olson learned from Munger, practice "shadowboxing" instead: striking blows when the opponent isn't there.

Munger, Tolles & Olson has often "shadowboxed" by hiring mock juries, making oral arguments before them and then observing their deliberations from behind a one-way mirror, Olson said. That way, the firm can detect the weaknesses in its own arguments through other people's eyes.

Graham recalled another insight of Munger's: When a corporate board of directors considers a capital expenditure or acquisition, it should inform the people advocating it that they'll have to come back three years later to compare their original projections with how it ultimately worked out.

Gayner cited one of Munger's favorite historical tidbits: In ancient Rome, when an aqueduct or bridge was built, the chief engineer had to stand directly under the arch when the scaffolding was removed.

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