Here is an excerpt from Lawrence Cunningham’s tribute to Charlie Munger who recently passed  away at age 99.

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Charlie Munger, who died Tuesday at the age of 99, and Warren Buffett are a shining example that two heads are better than one. Where would Buffett be without Munger, and vice versa? Successful, yes, but not to the stratospheric heights they reached together. Thanks to that partnership, thousands of Berkshire Hathaway shareholders have become multi-millionaires and millions more gained a wealth of knowledge.

I once mentioned to Munger how impressed people were with the wealth he had accumulated, to which he responded with uncharacteristic humility: “Being Warren’s business partner, that was unavoidable.” For Buffett’s part, when asked to name his greatest investment accomplishment, without hesitation he said, “Recruiting Charlie.”

In Buffett’s 2015 letter to shareholders, marking Berkshire’s 50th anniversary, he said Munger’s most significant contribution to Berkshire was shaping Buffett’s investment philosophy. It was 1972 and the transaction was See’s Candies. For the first time, Buffett paid a premium for a franchise business, ever since saying it was the most important investment he had ever made. Munger had taught a lesson Buffett has immortalized in his memorable teaching that: “It is better to buy a good business at a fair price than a fair business at a good price.”

The Buffett-Munger relationship is at the heart of another well-known statement about Berkshire: “Though our form is corporate, our attitude is partnership.” Acting on that concept, in 1981, Munger invented Berkshire’s distinctive shareholder charitable giving program. At most companies, the CEO picks which charities the company donates to, but that would be anathema at Berkshire. Munger devised a tax-advantaged and shareholder-centric program through which every Berkshire shareholder got to identify the charities to which Berkshire would donate.

Munger was the “abominable no-man,” referencing his veto power over improdivent acquisitions.

Buffett jokes that Munger was the “abominable no-man,” referencing his veto power over improvident acquisitions. Virtually all of these remain confidential, of course, but the examples tended to involve companies with many visible strong features — brand loyalty, pricing power, skilled workforce — along with some nettlesome or troubling drawbacks such as opaque disclosure or aggressive accounting.

On the rare occasions when Buffett and Munger disagreed, they did so with humor. In a classic example, in 1985 Berkshire acquired a corporate jet. Buffett thought it was a marvelous tool for him to fly around the world, making deals. Munger thought it terribly indulgent. They debated what to name this aircraft. Munger thought it should be named The Aberration. Buffett countered with calling it the Charles T. Munger, and they settled on Indefensible.
Berkshire later sold that jet after it acquired NetJets, the fractional aviation company where Buffett has done all his flying since.

‘Next time I’ll call Charlie’

Munger was also deferential when Buffett wanted to proceed anyway. At the 1999 Berkshire annual meeting, a shareholder asked Buffett, “How do you know when you have a big idea?” Buffett said “I know I have a big idea when I talk it over with Charlie and he says ‘no’ instead of saying ‘that’s the worst idea I’ve ever heard’.”

Buffett didn’t always consult with Munger. In 2007 he invested $2 billion in the debt of a leveraged buyout of Texas Electric Utilities. Within a year after the financial crisis that investment had to be written off, and Berkshire lost $1 billion on it. In confessing that it was his sole error in the 2013 report, Buffett wrote: “Next time I’ll call Charlie.”

At the 2013 annual meeting, a Berkshire shareholder asked about investment opportunities for the company in the eurozone. After Buffett criticized political flaws in the European Union, Munger in his trademark fashion said that admitting Greece into the EU was like “putting rat poison in whipping cream.” Buffett nevertheless said, “I would like to buy a big business in Europe so if you have any ideas let me know.” To which Munger added, closing out the topic, “If it’s in Greece I hope you’ll give me a call.”

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Lawrence Cunningham‘s two dozen books include The Essays of Warren Buffett, which Cunningham self-published into an international best-seller that he has arranged for translation into a dozen languages.

An influential thought leader in both value investing and corporate governance, Cunningham’s other notable books include Quality Investing (long time best seller with AKO Capital), The AIG Story (with Hank Greenberg) and Margin of Trust (which Warren Buffett singled out for special mention in his 2020 letter to Berkshire Hathaway shareholders).

Cunningham ​advises companies, boards and shareholders, currently as the founder of Quality Shareholders Group and special counsel at Mayer Brown LLP. He has served on numerous corporate boards, of both private and public companies, including Markel Group (New York Stock Exchange) and Constellation Software Inc. (Toronto Stock Exchange).