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According to the worldwide rumor mill powered by members of
Buffett's cultish fan club, Munger may be the wizard behind the Berkshire
Hathaway throne. Howard Buffett, Warren's eldest son, has said that his
father is the second smartest man he knows. He says Charles Munger is
the first.7 Certainly Warren Buffett, in his wry way, builds on Munger's
mystique: "Charlie does the talking," Buffett claimed at one of Berkshire
Hathaway's annual meetings. "I just move my lips."

One year, Buffett fielded a question from a shareholder, then passed
the query on to Munger, who gave the expected reply, "I've got nothing to
add." Buffett, who teases Munger unmercifully, chuckled. "Sometimes he
subtracts. "8

Warren and Charlie put on an entertaining show at the Berkshire
Hathaway annual meetings. They also do a conscientious job of portraying the business and investment philosophy of one of America's most
talked about but least understood corporations. Yet Buffett is indisputably
the star of the event and his personality takes the spotlight. Charlie
Munger has perfected his role as the curmudgeonly sidekick, and in fact
seems to enjoy the straight-man role.

"But that guy you see sitting next to Warren, that isn't Charlie. That's
just the image he's cultivated," explained Munger's stepson, Los Angeles
attorney Hal Borthwick. "It's true, probably, he doesn't have a lot to add
and he wants to get on with it. I think he works better in small groups
than he does in large crowds, but at the end of the day, that isn't the real
Charlie Munger that's sitting up there."

Who is the real Charles T. Munger?

To Borthwick he is a dedicated step-father, a mentor and someone
who has made life a real adventure.

To Forbes magazine, Munger is the foil that makes Buffett's downhome image believable. His "tough style approach makes possible Buffett's
Mr. Nice Guy."9

To the former top managers of Salomon Brothers Inc., he was a hardnosed board member who recognized a deception early and insisted that
government regulators and the public be given a full and contrite explanation of an episode involving U.S. Treasury bond trading misdeeds, even
if Salomon's lucrative bond trading business was put at risk.

To the small but prestigious Los Angeles law firm, Munger, Tolles &
Olson, Munger is a powerful client magnet who attracted oil companies, public utilities, and other corporations. Many decades ago, Munger
brought in a small and loosely connected group of companies that in time
became the Berkshire Hathaway of today.

To those who support women's rights, Munger is a hero-the catalyst who years ago sparked the movement to legalize abortion in the
United States.

For those who oppose abortion rights, Munger is a powerful nemesis,
one who deserves to be picketed now and then.

To Roger M. Grace, Los Angeles gadfly publisher of The MetropolitanNews, Munger is a billionaire bully intent on using his Daily Journal Corporation to monopolize the California legal publishing market.10

To his bridge partners, including Buffett, Fortune magazine editor
Carol Loomis, Los Angeles billionaire Otis Booth, Microsoft founder Bill
Gates, and the late comedian George Burns, he's a good bridge player who
would be even better if he didn't occasionally verge into aberrant behavior. His partners sometimes have a little trouble understanding why he
makes certain bids or plays certain cards, though usually he is following
some simple logic of his own.

To boat owners and builders, Munger is a guy who is intrigued by
new and offbeat ideas for watercraft, and who just might be persuaded to
back a project. "My dad is a pushover for anyone with a wild idea for a
boat," said his eldest daughter Molly.

To James Sinegal, chief executive officer of Costco, the warehouse
retailing chain on whose board Munger sits, Munger is one of the bestconnected businessmen in the country. When he met Charlie to ask him
to serve on Costco's board of directors, the two had lunch at the prestigious downtown Los Angeles business club, the California Club. "There
was a big lunch crowd," recalled Sinegal. "I think all 400 of them knew
Charlie."

Later at Munger's first Costco board meeting in 1997, Sinegal started
to introduce him to another director, prominent political activist Jill
Ruckleshaus. It turned out that Munger and Ruckleshaus had met long
ago. "You're never shocked by whom Charlie knows," said Sinegal.

Among Munger's friends are Bill Gates, Nathan Mhyrvold (once the
futuristic idea man at Microsoft), General Electric chairman Jack Welch,
former U.S. Trade Representative Carla Anderson Hills, Los Angeles Mayor
Richard Riordan, and many governors, senators, and presidents.

As similar as they seem, Buffett and Munger also are quite differentopposites in some ways. Whereas Buffett specializes in simple language,
folksy stories, and allegory, Munger grants nothing to small words. If he
can use a big word when a small one will do, he spends the syllables. Munger thrives on complex ideas and detailed analysis. While Buffett is
uninterested in clothes, Munger is a natty dresser. Buffett lives in the first
house he ever bought and has done only limited remodeling over the
years. Munger loves architecture and owns seven homes in all. And finally, Munger is a staunch Republican, while Buffett calls himself "mostly
a Democrat."

Munger's personal life has been difficult and at times even tragic,
and money did not come to him as easily as it seemed to come to Buffett.
Yet, as with other great partnerships, such as those involving Microsoft
founders Bill Gates and Paul Allen; Sony Corporation's Akio Morita and
Masaru Ibuka; or Buffett's early mentor Ben Graham and his partner Jerry
Newman-there is a synergy, even a magic in the relationship. Each man
is talented on his own, each would have attained great wealth and lived
an interesting life separately. But both have gaps in their personalities or
skills that are filled in by the other. The two fare much better as a duo
than either could do independently. As Munger often says, you can get
"lollapalooza" results when you bring together the right combination
of factors.

Buffett had formal training in business and finance, but not in law.
Munger had been a corporate lawyer and, though he had experience in
operating businesses, he still had a lot to learn about being a professional
investor.

"You know the cliche that opposites attract?" Munger said. "Well, opposites don't attract. Everybody engaged in complicated work needs colleagues. Just the discipline of having to put your thoughts in order with
somebody else is a very useful thing.""

In Munger, Buffett found someone who shared his values and goals
and to whom he could talk on a sophisticated level.

One of the greatest similarities between the two men is their sense
of humor. Like many Midwesterners, they have learned to deal with discomfort, stress, surprise, and even grief by making jokes. Humor breaks
the tension, provides psychological protection, and allows them to assert
dominance over their circumstances. 12

Munger brought more than comradeship to the mix. Though Buffett
had inherited a group of former Graham-Newman investors and was
busily recruiting money from Nebraskans, Munger spread the word about
Buffett's skills in California, bringing millions more dollars into his investment pool. To a large extent, Berkshire's early success was due to the
acquisition of Blue Chip Stamps, See's Candy, and other California companies, most of which were discovered by Munger and his circle of West
Coast investors.

Just as Munger looked on in amusement at Buffet parochial food preferences, Buffet came to understand Munger's unusual personality. In
1967, in one of their early ventures, Munger and Buffett went to New
York to buy a small company called Associated Cotton Shops. Buffett recalls walking along a street in Manhattan with Charlie, talking about the
business deal. Suddenly Buffett looked around and discovered he was talking to himself. Charlie was gone. Later Buffett learned that Munger remembered he had to catch a plane, and just walked off.

Despite Munger's ungraceful abruptness, said Buffett, "He is a sensational friend. The niceties are not there. None of the superficial acts, but
all of the real ones. We've never had an argument. We've disagreed at
times and we've done a lot of things together, but there's never been one
time we've been mad or irritated or anything. If you talk about ideas, he's
not going to get emotional about it. But if he has superior facts or reasoning, he won't back off. We both think the other one is worth listening to."

His OWN LIFE, insists Munger, is "not a big story-long dull stretches are
possible. To finish first you have to first finish. Don't get in a position
where you go back to go. What's interesting is that some guy whose
grandfather was a lawyer and a judge-hurriedly going to Harvard Law
with a wave of veterans-I was willing to go into so many different businesses. I was constantly going right into the other fellow's business and
doing better than the other fellow did. The reason it was possible? Selfeducation-developing mental discipline, big ideas that really work."

Munger's life story reveals a number of large, though perhaps loosely
organized, ideas that served him well: Live within your income and save
so that you can invest. Learn what you need to learn. As Buffett likes to
say, "if it's trite, it's right."

Warren Buffett often counsels college students to develop early the
right habits of thought and behavior, since most of the time, people act on
habit. This goes hand in hand with another big idea promoted by
Munger-always act as honorably as possible. "How you behave in one
place," he says, "will help in surprising ways later."

There are a lot of things in life way more important than
money. All that said, some people do get confused. I play golf
with a man who says, "What good is health? You can't buy
money with it."'

Charlie Munger

t IS THE LAST SUMMER OF the twentieth century and Charles and Nancy
Munger clamber from the motorboat onto the dock at their Star Island
house, greeting a chattering gaggle of children and grandchildren. A
flaxen-haired three-year-old says "Hi Grandad, hi Grandad," and when
Charlotte fails to get Charlie's attention, she simply takes his hand and
quietly walks beside him. Minutes later Charlie begins talking to the little
girl, as if he'd known all along that she was there. Charlotte glows, clearly
pleased that her strategy paid off. This is a big family, and competing for
the attention of the patriarch is a common occurrence.

Daughter-in-law Sarah calls from the kitchen, "Charlie, Warren
called. Call him back."

"Okay," shouts Charlie, but instead of going to the telephone, he
gives directions to his sons and to the houseman, Felipe Velasquez, as to
where various pieces of luggage (including an unwieldy bag of fishing
rods) are to be deposited.

Felipe holds up a sturdy, plastic bait box that had been checked as
luggage on the Munger's three-leg flight from visiting friends in Maine to
Bemidji, the nearest airport to the Munger family lake houses in Northern
Minnesota. "Look," Felipe grins with delight. "Not dented!" The box holds a collection of newfangled lures that Charlie Munger, a certified billionaire, ordered from a television fishing show.