Warren Buffett’s longtime deputy showed that rising to the top isn’t everything
3 min
Charlie Munger was Robin to Warren Buffett’s Batman, a business equivalent of the Edge rocking with the Bono of investing.
Munger, who died Tuesday at age 99, played one of the toughest roles in the corporate (or any) world: No. 2.
Succeeding as second in command takes a rare blend of confidence and humility, say people who’ve done it. The consummate right-hand person must be devoted to organisational success while accepting that someone else’s star will always shine brighter.
At a time when many American workers are reconsidering whether the race to the top is worth running at all, Munger’s apparent satisfaction with being the ultimate sidekick could be a model.
It helped that Warren and Charlie, as the duo was known, shared a personal friendship. And being a wingman is presumably more fun when you’re a billionaire, as Munger was. Most important, say those who knew him: Munger knew he was respected and appreciated.
Buffett made sure of it.
Harry Kraemer, former chief executive of the healthcare company Baxter International, recalls a conversation with Buffett at a CEO gathering around the year 2000: “I said, ‘Boy, you’ve got an amazing track record.’ And he goes, ‘It isn’t just me. Never mention my name without Charlie’s.’”
In a recent annual letter, Buffett wrote: “I never have a phone call with Charlie without learning something.”
There aren’t many pairs like Buffett and Munger. An analog might be the late Canadian telecom mogul Ted Rogers and his longtime lieutenant, Phil Lind, who died in August at age 80. Robert Brehl, who co-wrote Lind’s 2018 memoir, “Right Hand Man,” says loyalty is essential to a relationship like Rogers-Lind or Buffett-Munger.
Having complementary strengths and interests helps ward off resentment, Brehl adds.
“You have to have the yin and yang,” he says. “Ted wouldn’t have been as effective without Phil, and the same thing with Warren and Charlie.”
Before meeting Buffett, Munger was already a professional success. He served in World War II, went to Harvard Law School and co-founded a law firm, Munger, Tolles & Olson, where his name was first on the door.
Even though his results as an investor were strong, over time, he realised he could be more successful—and happier—in a partnership. Understanding his own shortcomings contributed to his willingness to become Buffett’s running mate, he has said. He rejected Buffett’s initial overtures before agreeing to come aboard.
“It took me a long time to wise up that [Buffett] had a better way of making a living than I did,” Munger told CNBC in 2021. “But he finally convinced me that I was wasting my time.”
Not that it was easy to set aside his ego to take the No. 2 role and play to what his No. 1 needed. Buffett was Berkshire Hathaway’s public face and larger-than-life persona. Munger seemed to relish his freedom from talking to reporters and investors. In the background, he could be sharper, more direct and funnier.
The durability of the Buffett-and-Munger duo act stemmed, in part, from a shared intellectual curiosity, a measure of humility—for billionaires, anyway—and willingness to learn from their mistakes.
“I constantly see people rise in life who are not the smartest, sometimes not even the most diligent, but they are learning machines,” Munger said in his commencement address to the University of Southern California’s law school in 2007. “They go to bed every night a little wiser than they were when they got up and, boy, does that help, particularly when you have a long run ahead of you.”
Savvy runners also know it can be best to let someone else take the lead to break the wind. A certain type of person prefers to run second, says social psychologist Tessa West, who is studying people she calls “runners up” for a forthcoming book.
“Once you get to a certain level of power, you realize that that top position doesn’t necessarily come with more influence—it just comes with more publicity and a lot more reputational risk,” she says. “The way I see it, Munger got to have his cake and eat it too. He had status without all the headaches.”
He also had a life outside of Berkshire and Buffett. One of Munger’s pet projects was a quest to design the perfect college dormitory.
He’ll be remembered as the consummate consigliere, but that wasn’t his whole identity.
—Geoffrey Rogow contributed to this article.
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What a quarter-million dollars gets you in the western capital.
Alexandre de Betak and his wife are focusing on their most personal project yet.
A new study finds that is particularly true for people nearing retirement.
2 min
Feeling depressed when the stock market is down? You have plenty of company. According to a recent study, when stock prices fall, the number of antidepressant prescriptions rises.
The researchers examined the connection by first creating local stock indexes, combining companies with headquarters in the same state. Academic research has shown that investors tend to own more local stocks in their portfolios, either because of employee-stock-ownership plans or because they have more familiarity with those companies.
The researchers then looked at about 300 metropolitan statistical areas, which are regions encompassing a city with 50,000 people and the surrounding towns, tracking changes in local stock prices and the number of antidepressant prescriptions in each area over a two-year period. They found that when local stock prices dropped about 12.8% over a two-week period, antidepressant prescriptions increased 0.42% on average. A similar relationship was seen in smaller stock-price drops as well. When local stock prices fell by about 6.4%, antidepressant prescriptions increased about 0.21%.
“Our findings suggest that as the stock market declines, more people experience stress and anxiety, leading to an increase in prescriptions for antidepressants,” says Chang Liu , an assistant professor at Ball State University’s Miller College of Business in Muncie, Ind., and one of the paper’s co-authors. The analysis controlled for other factors that could influence antidepressant usage, like unemployment rates or the season.
In a comparison of age groups, those aged 46 to 55 were the most likely to get antidepressant prescriptions when local stocks dropped.
“People in this age group may be more sensitive to changes in their portfolio compared with a younger cohort, who are further from retirement, and older cohorts who may own less stocks and more bonds since they are nearing retirement,” says Maoyong Fan , a professor at Ball State University and co-author of the study.
When the authors looked at demand for psychotherapy during periods of declining stock prices their findings were similar. When local stock prices dropped by about 12.8% over a two-week period, the number of psychotherapy visits billed to insurance providers increased by about 0.32%. They also found a correlation between local stock returns and certain illnesses associated with depression, such as insomnia, peptic ulcer, abdominal pain, substance abuse and myocardial infarction. But when the authors looked at other insurance claims, like antibiotics prescriptions, they found no relationship with changes in local stock prices.
By contrast, for periods when stocks rise, the authors didn’t see a drop in psychological interventions. They found no statistical relationship between rising local stock prices and the number of antidepressant prescriptions, for example, which the authors believe makes sense.
“Once a patient is prescribed an antidepressant, it’s unlikely that a psychiatrist would stop antidepressant prescriptions immediately,” says Liu.
One practical implication of the study, Liu adds, is that investors should be aware of their emotional state when the market dips before they make investment decisions.
