B000U5KFIC EBOK (2 page)

And, speaking of sin, Charlie even brings rationality to that subject.
He concludes, of course, that sins such as lust, gluttony, and sloth are to
be avoided. Nevertheless, he understands transgressions in these areas,
since they often produce instant, albeit fleeting, pleasure. Envy, however,
strikes him as the silliest of the Seven Deadly Sins, since it produces nothing pleasant at all. To the contrary, it simply makes the practitioner feel
miserable.

I've had an enormous amount of fun in my business life-and far
more than if I had not partnered up with Charlie. With his "Mungerisms"
he has been highly entertaining, and he has also shaped my thinking in a
major way. Though many would label Charlie a businessman or philanthropist, I would opt for teacher. And Berkshire clearly is a much more
valuable and admirable company because of what he has taught us.

No discussion of Charlie would be complete without a mention of the
beneficial, indeed transforming effect of his wife, Nancy. As a front-row
observer of both people, I can assure you that Charlie would have
achieved far less had he not had Nancy's help. She may not have entirely
succeeded as a Miss Manners instructor-though she tried, oh how she
tried-but she has nourished Charlie in a manner that has in turn enabled
him to nourish the causes and institutions in which he believes. Nancy is
truly extraordinary. What Charlie has contributed to the world-and his
contributions have been huge-should be credited not only to him but to
her as well.

WARREN E. BUFFETT

Omaha, Nebraska

he thousands of shareholders who attend the Berkshire Hathaway annual meeting in Omaha, Nebraska, each spring go to see Warren Buffett, but they also are fascinated by the man who sits beside him on the
stage and helps the Oracle of Omaha answer questions. They call it the
Warren and Charlie Show. It usually goes this way: Buffett answers the
question, giving it as much or as little time as he sees fit. At the end, he
turns to his longtime partner Charles Munger and asks, "Charlie, do you
have anything to add?" Charlie sits there looking as if he'd already been
chiseled into Mount Rushmore, and gives a brusque reply. "Nothing to
add." He and Buffett play their little jokes each year to an audience that
enjoys going right along with them. The meeting does have a deeper element though. Buffett gives serious thought to the questions. And occasionally, something will come over Munger and he delivers a little lecture,
based on his long life and abundant experience. When he does speak,
Munger has the audience's undivided attention.

He has messages that he thinks are important: Deal ethically with
others; face reality; learn from the mistakes of others, and so forth. He delivers those sermonettes with missionary zeal.

"Daddy is very conscious of the fact that he represents social values
that are not all that common in the business world," said his first daughter
Molly Munger.

Munger isn't as wealthy as Buffett, partly because his life is organized
differently. He isn't the showman Buffett is, though he can be enormously
entertaining. Thanks to these two factors, the Munger family has long
enjoyed the privilege of being billionaires without the inconveniences
of fame.

I told Munger about this book project when I saw him at the Berkshire Hathaway meeting in May 1997, and said I would attend the Wesco
Financial Corporation meeting later the same month and hoped we could
talk more about the project at that time. Munger didn't say much except
that he didn't think the book would sell many copies. My husband, a
friend, and I did attend the Wesco meeting and when it was over, Munger rose and in a loud voice asked, "Is Janet Lowe here?" The assembled audience of several hundred people craned their necks searching for the culprit, and a few who know me pointed in my direction. I timidly stood,
"Yes, Mr. Munger." He rose from his chair and declared, "Follow me," and
turned and marched out a back door. I waved goodbye to my husband and
friend, not sure when I would see them again. Munger silently led the way
up the elevator and to a private office where he told me that the Munger
family didn't want a biography of him. They could see their cherished privacy slipping away. Being a fundamentally shy person who doesn't enjoy
confrontation, I did not find this meeting easy. But I explained that I had
signed a contract and would need to deliver the book, even if he did not
cooperate. I said, however, that I believed the book would be much better
if he did. "All right then," Munger barked. "You can start by reading these
books." He handed over a long list of his favorites, including Richard
Dawkins' The Selfish Gene. Later, Munger told me that he went through
phases, at first opposing the book, then trying to minimize the damage,
and in the end, working right beside me, trying to make the events of his
life as understandable as possible. It clearly wasn't always easy for him,
especially when I pressed for details about the death of his son and the
misguided surgery that left Charlie blind in one eye.

Nevertheless, Munger sat for long interviews at his home in Santa
Barbara, his office in Los Angeles, and twice at his sister's home in
Omaha. The Mungers invited my husband and me to their vacation retreat
in Northern Minnesota, where I spent several days interviewing family
and neighbors, but also went hiking, boating, fishing, and hanging out
with the Mungers.

I have been researching and writing this book for three years. Although some of the research builds on work done earlier on value investor Benjamin Graham and his star pupil Buffett, that material could
only serve as background. Munger's photograph has appeared on the
cover of Forbes and he has been profiled in a couple of newspapers, but
there is very little written about him. More than 75 percent of the research in this book is original. I've done 44 interviews with 33 different
persons. I attended eight Berkshire shareholder meetings and five Wesco
Financial Corporation annual meetings, where Munger is alone on the
stage and doesn't hold back anything. I worked with transcripts of about
a half dozen speeches that Munger gave in various places, including one
for his class reunion at Harvard Law School.

Although he became involved in the project, Charlie tried to resist
the temptation to direct the book, other than to say often that he hoped it would emphasize the lessons he's learned during his 76 years of life. He
would like others to benefit from his errors and successes. Indeed, the lessons of his life are not so much in the telling as in the living. The way he
and his wife raised eight children through all kinds of adversity-how
Munger constantly strove to maximize his talents and his financial situation, the responsibility he feels to be a connected, contributing citizenall that is something of a saga. While writing this book, I often burst out
laughing, but there were times I winced in pain or felt sorrow. Life threw
Charlie about everything it had.

While Munger is a one-of-a-kind, he also is typical of the fusion of
West Coast culture with Midwestern values, which took place primarily
in the first half of the twentieth century. If Buffett shows that it is possible to be an alpha male investor and live and work in Omaha, a city not
known as a financial center, Munger shows that despite some commonly
held assumptions, valuable, innovative financial, and cultural ideas can
and do flow from west to east.

Munger often lectures on big ideas that can change your life, but in
those speeches he does not give detailed instructions on what to do. He
hands his listeners a map with which they can find the treasure of wisdom, and like any good treasure map, it's so simple that it is deceptive.
You don't get the treasure until you figure out what the instructions mean
and follow them to the end.

So many people have helped make this book possible. Most important,
of course, have been Charles T. Munger, his wife Nancy, and seven of
their eight children, Hal and David Borthwick, Molly, Wendy, Charles
Junior, Emilie, and Barry Munger. The spouses of the Munger children
also have been supportive, helpful, and interesting to know. Doerthe
Obert, Charlie's secretary has been wonderful, as was Buffett's assistant
Debbie Bosanek. Carol J. Loomis, an editor at Fortune magazine and an
old friend of Buffett and Munger, has been extremely generous with her
time and ideas. At the back of this book is a list of the people interviewed,
and rather than name all of those people here as well, let me thank them
as a group. It goes without saying, but must be said, that Warren Buffett's
cooperation opened rows of doors.

My literary agent Alice Fried Martell has been essential to the writing
of this book, as has the editorial staff at John Wiley & Sons. Publisher Joan O'Neil, editor Debra Englander, Robin Goldstein, Mary Todd, Peter
Knapp, and Meredith McGinnis. My work would be impossible without
the help of Phyllis Kinney, Jolene Crowley, and most of all my husband
and helpmate, Austin Lynas. Thanks to everyone.

JANET LOWE

Del Mar, California