From $100 to $400,000: The Astonishing Growth of Berkshire Hathaway after Charlie Munger's Arrival
Investor Charlie Munger's recent passing leaves a void in the financial world This article explores how a $100 investment in Berkshire Hathaway, during Munger's tenure, has remarkably grown to nearly $400,000 A testament to his investing prowess
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Warren Buffett's close friend and confidant, billionaire investor Charlie Munger, was fondly referred to as the "abominable no-man" for good reason.
Billionaire investor and vice chairman of Buffett's investment firm Berkshire Hathaway, Charlie Munger, passed away Tuesday morning at the age of 99.
In a statement on Tuesday, Buffett credited Munger for his inspiration, wisdom, and participation in building the company to its current status, and also mentioned that he had given Munger his nickname based on his tendency to temper his enthusiasm.
Munger was primarily known for being Buffet's second in command and was part of the duo that led the iconic annual shareholder meetings. However, he also made a significant impact on his own.
If an individual had invested $100 in Berkshire Hathaway in 1978, the year Munger joined the company, that investment would now be worth close to $400,000 as of the most recent closing date - a substantial increase compared to the $16,527 that the same amount invested in the S&P 500 would have yielded in that same year, as per data from Bespoke Investment Group. (At that time, Berkshire Hathaway shares didn't have different classes and ended 1977 at $138 a share.)
What was Mungers investment approach? Well, Munger had a straightforward and no-nonsense personality that was evident even during his time at Harvard Law School. "Charlie was always in a rush," notes Michael Broggie in Poor Charlies Almanack - but his method for determining whether a company was worth investing in was meticulous and thorough.
Munger took calculated and sizable investment positions after carefully evaluating potential opportunities. He looked for businesses that were easy to comprehend and could thrive in any market condition. According to the book, he evaluated investment prospects using "various mental models," which involved gathering and analyzing information about the companies' internal and external environments.
Once Munger decided that a business was worthy of his hard-earned money, he would place a substantial investment and then adopt a hands-off approach - what he referred to as "sit-on-your-a** investing." "You're paying lower fees to brokers, avoiding unnecessary noise, and if it's successful, the tax system can provide an additional one, two, or three percentage points per year," Munger explained.
Projections of Warren Buffett, Berkshire Hathaway Inc. chairman and chief executive officer, and Charles Munger, vice chairman of Berkshire Hathaway.
Daniel Acker/Bloomberg/Getty Images
Munger's strategy, alongside Buffetts, was immensely successful. Berkshire surpassed the S&P 500 in 31 out of the 46 years Munger was with the company, as reported by Bespoke.
Some of his choices did not need extensive scrutiny - Munger simply had a strong, straightforward aversion to digital assets.
The price of the 12 Days of Christmas just hit a record high
"From the moment it was introduced, I loathed it, and as it gained popularity, my disdain only grew," Munger stated at The Daily Journals annual meeting in 2018. "Why would anyone want their children to embrace something like Bitcoin?"
Your True Love's extravagant and bird-filled holiday gift-giving tradition is more costly than ever. However, according to my colleague Alicia Wallace, inflation is not as high this time around.
According to the 2023 Christmas Price Index from PNC Financial Services, the cost of the gifts mentioned in the "Twelve Days of Christmas" song reached a record high of $46,729.86 this year. This lighthearted seasonal report, now in its 40th year, humorously measures the average change in prices for the items in the classic Christmas carol, such as the solo partridge, two turtle doves, seven swans, and 12 drummers. The Christmas Price Index is a playful spin on the Bureau of Labor Statistics Consumer Price Index, designed to showcase market changes over time and educate consumers about the economy.
The price tag for 2023 has increased by 2.7% compared to last year, which is a more acceptable increase than the significant 10.5% jump seen last year. The holiday index is also slightly lower than the Consumer Price Index, which increased by 3.2% over the 12 months ending in October and 7.7% compared to this time last year.
There is reason to feel more optimistic about the economy as even unconventional measures of inflation are showing the impact of the recent significant interest rate hikes in the US. For more information, click here.
Rite Aid is closing another 30 stores
Rite Aid is closing another roughly 30 locations across the US in addition to the 100 the bankrupt chain announced last month as part of its restructuring efforts.
The most recent wave of closures was disclosed in a bankruptcy court filing, with 31 stores closing in twelve states. This includes seven in California, four in Pennsylvania, three each in Ohio, Virginia, and Washington, and two each in Michigan, New Jersey, Oregon, and New York. The remaining stores are located in Connecticut, Maryland, and Nevada.
Once the closures are fully implemented, Rite Aid will have approximately 2,000 stores remaining. CNN's request for comment from the company went unanswered.
Rite Aid, the third-largest standalone pharmacy chain in the US, has been facing challenges as the entire drug store retail sector struggles to compete with Amazon, Walmart, Target, and Costco moving deeper into the space and offering more customer-friendly alternatives. Additionally, Rite Aid has also had legal troubles stemming from accusations of filing unlawful opioid prescriptions for customers.
Read more here.
