The Education of Warren Buffett 23Berkshire and Blue Chip Stamps merged in 1978, he became Berkshire’s
vice chairman, a position he still holds.
The working relationship between Munger and Buffett was not
formalized in an official partnership agreement, but it has evolved over
the years into something perhaps even closer, more symbiotic. Even be-
fore Munger joined the Berkshire board, the two made many invest-
ment decisions together, often conferring daily; gradually their business
affairs became more and more interlinked.
Today Munger continues as vice chairman of Berkshire Hathaway
and also serves as chairman of Wesco Financial, which is 80 percent
owned by Berkshire and holds many of the same investments. In every
way, he functions as Buffett ’s acknowledged comanaging partner and
alter ego. To get a sense of how closely the two are aligned, we have
only to count the number of times Buffett reports “Charlie and I” did
this, or decided that, or believe this, or looked into that, or think this—
almost as if “Charlie-and-I” were the name of one person.
To their working relationship, Munger brought not only f inancial
acumen but the foundation of business law. He also brought an intel-
lectual perspective that is quite different from Buffett’s. Munger is pas-
sionately interested in many areas of knowledge—science, history,
philosophy, psychology, mathematics—and believes that each of those
f ields holds important concepts that thoughtful people can, and should,
apply to all their endeavors, including investment decisions. He calls
them “the big ideas,” and they are the core of his well-known notion
of “latticework of mental models” for investors.^15
All these threads together—f inancial knowledge, background in
the law, and appreciation of lessons from other disciplines—produced
in Munger a somewhat different investment philosophy from that of
Buffett. Whereas Buffett was still searching for opportunities at bar-
gain prices, Munger believed in paying a fair price for quality com-
panies. He can be very persuasive.
It’s far better to buy a wonderful company at a fair price than
a fair company at a wonderful price.^16
WARRENBUFFETT