Lessons from Warren Buffett and Charlie Munger; A big thank you to my readers; Am I a megalomaniac?

1) Longtime readers know what a fan I am of Berkshire Hathaway (BRK-B) CEO Warren Buffett...

Since I first discovered him three decades ago, I've eagerly devoured everything he has said and written – even before I first met him at the Berkshire annual meeting I attended in 2000.

Here's a picture of us from back then (regarding pictures like this, he always jokes to people that he's whispering a stock tip in their ear):

What I learned from him and his longtime partner – the late Charlie Munger – about investing was invaluable.

In the early days of my career, I had so little experience – and they were such brilliant, inspiring, and patient teachers! Had I not absorbed all of the investing lessons they imparted, I would never have achieved anything close to what I did.

I beat the market year after year in my first dozen years and grew assets under management from $1 million to $200 million across three hedge funds and two mutual funds.

I also launched successful investment conference and newsletter businesses, appeared regularly on CNBC for many years, was on 60 Minutes twice, wrote hundreds of articles, and authored/coauthored four books.

However, I eventually realized that the most important things I've learned from Buffett and Munger go well beyond value investing. They fall under the category of what Munger called "worldly wisdom."

It's not rocket science (as Munger liked to joke: "If it's trite, it's right!"): Work hard, become a "learning machine," have high integrity, develop good habits, be nice to everyone, marry the right person and maintain a strong relationship, and so forth.

These thoughts are on my mind today for two reasons:

• A letter Buffett released to Berkshire shareholders a week ago, and
• The one-year anniversary of Munger's death last Thursday.

Regarding the former, Buffett issued a press release announcing that he was giving another 1,600 A-class shares of Berkshire, worth $1.2 billion, to the foundations of his first wife, Susie (who passed away in 2004), and their three children: Susan, Howard, and Peter.

This gift itself isn't newsworthy. Buffett has been giving away his fortune since 2006, and his latest gifts mean that he has now given away more than half (56.6%) of his initial stake in Berkshire stock.

But what makes it noteworthy is the three-page letter Buffett attached to the release that's so filled with wisdom, integrity, and love that I struggle for words that will do it justice... So instead, I'll let my Italian friend Roberto Russo describe it. Here's what he recently posted publicly on Facebook (translated from the original Italian):

In a time when hate seems to be the dominant language, greed a virtue, and superficiality the measure of all things, we need examples to remind us what it really means to live with integrity and purpose.

Warren Buffett is not just the greatest investor alive, but a man who embodies universal and timeless values, an antidote to a world at risk of losing its moral compass.

In his latest letter to shareholders, published last November 25, Buffett offers not only an extraordinary financial lesson, but a profound reflection on life, family, and the duty to give back.

As Roberto continued:

Buffett teaches us that "rich parents should leave their children enough to do anything, but not so much that they do nothing." A powerful invitation to find a balance between responsibility and opportunity.

With his simple lifestyle, he shows that the value of a person is not measured by what he possesses, but by what he shares with others.

In a historic time in which success is often confused with selfishness and vanity, Buffett represents a shining example.

His life reminds us that true power lies in building, in giving and inspiring, and not in destroying or dominating.

And as Roberto concluded:

It is a document that represents not only a finance lesson, but also a tribute to family values, the meaning of life and duty towards society.

Reading this letter means immersing yourself in the vision of an extraordinary mind and a deeply generous heart.

It is an invitation to think about how each of us, in our own sphere and in our own small way, can help to leave a positive and lasting mark on the world.

I couldn't have said it better myself, Roberto – which is why I let you say it!

And I encourage you to read Buffet's letter yourself – again, you can see it right here.

2) The other thing that caused me to think about the impact Buffett and Munger have made on my life is the recent one-year anniversary of Munger's passing...

Almost every day, something reminds me of him and I think of his wise words. I want to share some of my favorites, broken down into two categories: worldly wisdom and (since this is an investing e-letter!) advice to investors. (Note that most of these quotes are from the notes I took at long-ago annual meetings of Berkshire and Wesco (a company now wholly owned by Berkshire), many of which I shared in the chapter I wrote in the definitive book about Munger, Poor Charlie's Almanack.)

Munger's Worldly Wisdom

• Spend each day trying to be a little wiser than you were when you woke up. Discharge your duties faithfully and well. Step by step you get ahead, but not necessarily in fast spurts. But you build discipline by preparing for fast spurts... Slug it out one inch at a time, day by day. At the end of the day – if you live long enough – most people get what they deserve.
• If you don't keep learning, other people will pass you by.
• In my whole life, I have known no wise people (over a broad subject matter) who didn't read all the time – none, zero... You'd be amazed at how much Warren reads – and at how much I read. My children laugh at me. They think I'm a book with a couple of legs sticking out. But that's not enough: You have to have a temperament to grab ideas and do sensible things. Most people don't grab the right ideas or don't know what to do with them.
• The way to win is to work, work, work, work, and hope to have a few insights.
• Organized common (or uncommon) sense – very basic knowledge – is an enormously powerful tool. There are huge dangers with computers. People calculate too much and think too little.
• Our game is to recognize a big idea when it comes along, when one doesn't come along very often. Opportunity comes to the prepared mind.
• Part of [having uncommon sense] is being able to tune out folly, as opposed to recognizing wisdom. If you bat away many things, you don't clutter yourself.
• All I want to know is where I'm going to die so I never go there.
• Invert, always invert.
• What's the best way to get a good spouse? The single-best way is to deserve a good spouse because a good spouse is by definition not nuts.
• If you rise in life, you have to behave in a certain way. You can go to a strip club if you're a beer-swilling sand shoveler, but if you're the bishop of Boston, you shouldn't go.

Munger's Advice to Investors

• You do get an occasional opportunity to get into a wonderful business that's being run by a wonderful manager. And, of course, that's hog-heaven day. If you don't load up when you get those opportunities, it's a big mistake... If you buy a few great companies, then you can sit on your ass – that's a good thing.
• Betting on the quality of a business is better than betting on the quality of management. In other words, if you have to choose one, bet on the business momentum, not the brilliance of the manager.
• In investment management today, everybody wants not only to win, but to have the path never diverge very much from a standard path except on the upside. Well, that is a very artificial, crazy construct. That's the equivalent in investment management to the custom of binding the feet of Chinese women. It's the equivalent of what philosopher Friedrich Nietzsche meant when he criticized the man who had a lame leg and was proud of it.
• The general culture of investment banking has deteriorated over the years... The culture now is that anything that can be sold for a profit will be. "Can you sell it?" is the moral test, and that's not an adequate test.
• Once you get into debt, it's hell to get out. Don't let credit-card debt carry over. You can't get ahead by paying 18%.
• You get a lot of dysfunction in a big, fat, happy place.
• Here's one truth that perhaps your typical investment counselor would disagree with: If you're comfortably rich and someone else is getting richer faster than you by, for example, investing in risky stocks, so what?! Someone will always be getting richer faster than you. This is not a tragedy... Envy is a really stupid sin because it's the only one you could never possibly have any fun at. There's a lot of pain and no fun. Why would you want to get on that trolley?

3) I also recommend this tribute to Munger by my friend and former colleague Enrique Abeyta: Remembering Charlie Munger. Excerpt:

While his controversial, off-the-cuff comments may have put me off, his wisdom, breadth, and insightfulness are extraordinary.

As we have learned more about the quotes of the greatest investors in history, Munger stands out as the #GOAT (Greatest-of-all-Time) regarding his pithy insights.

In honor of the passing of the most significant investment quote master of all time, we thought we would share some of our favorites today...

• A great business at a fair price is superior to a fair business at a great price...
• If something is too hard, we move on to something else. What could be simpler than that?...
• We both (Charlie Munger and Warren Buffett) insist on a lot of time being available almost every day to just sit and think. That is very uncommon in American business. We read and think.

4) My announcement of my New York City mayoral campaign in last Wednesday's e-mail generated a record amount of feedback from my readers, most of it very positive and encouraging. Thank you!

Here are three examples – first, from Mike J.:

I grew up in Brooklyn and moved to Los Angeles for work about 28 years ago. I went to Brooklyn Tech for high school, the City College of NY undergrad, and NYU for law school. I love LA, but if you become mayor of New York City, I'd seriously consider coming back.

I'm going to go to your website and make a donation towards your campaign.

Good luck! The city needs you!

And Wayne H.:

Although I am a Trump supporter out here in California, I am excited by your announcement and will definitely be rooting for you.

I can honestly think of no better candidate – you are smart, compassionate and level headed.

If I lived in NY you would definitely have my vote. Best of luck to you!

And Rob W.:

Best news of the week. I am thankful for one more thing and pray you can take out the turkeys currently in charge of NYC.

I used to work in the Chrysler building and looked forward to being in the middle of the Big Apple. I have not been back since Covid locked us all down and now, with crime running indiscriminately, I am glad I'm retired.

Best of luck (you can make your own) in your campaign.

But I've also gotten a few doozies – like this one from Matt S.:

Confirmed. You are the megalomaniac I thought you were.

Here's my response:

Dear Matt,

Thank you for making me laugh out loud – I needed that!

Two thoughts:

1) You're not the first person to accuse me of this (get in line behind my wife and daughters)!🤔🤣... and,

2) Has anyone WITHOUT a big ego ever run for high office, knowingly signing up for endless attacks?

I'm going to share this (keeping you anonymous, of course) with my politics and friends/family e-mail lists – they'll LOVE it!

Happy Thanksgiving!

Whitney

And as Matt followed up with:

You have a great sense of humor. That's awesome. Keep up the good work. Seriously, I do enjoy your products.

PS: I was a full time resident in NYC when Rudy Guiliani transformed Times Square from a triple-X porn hub into a safer, nicer experience in and around there. So, good work can get done by a city's mayor's office.

Thank you, Matt!

If you missed last week's announcement, you can read my e-mail to my readers right here and see my campaign website right here. And again, I'd like to give a big thank you to my readers for all the notes of encouragement.

Best regards,

Whitney

P.S. I welcome your feedback – send me an e-mail by clicking here.