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Forbes - Warren and Charlie and the Chocolate Factory
Posted by: guruhl (IP Logged)
Date: August 22, 2012 05:52PM
FORTUNE -- In response to a formal email about setting up a sit-down interview with Charlie Munger, his assistant simply wrote: "Charlie says to come over tomorrow at 8:30."
It wasn't what I had expected. And it was a bit early for me, being new to Los Angeles traffic and tired from the long previous day of touring the See's Candies plant in L.A. (it was a grueling task, but some intrepid writer had to do it.) Being told to simply show up at Munger's private home in Los Angeles on a Wednesday morning in May felt starkly casual compared to my meeting with Warren Buffett, which would be the next day and had been scheduled far in advance. I would be flying to Omaha for it that night.
I got up at seven on Wednesday, stuffed my bag, checked out of the hotel and hopped into my rental car, a white Mitsubishi Gallant with dysfunctional Hertz GPS unit. Traffic was bad, but I made it, pulling up outside Munger's address at 8:31. His house is big, but not a mansion; it looks like your standard upscale California home, complete with red roof and a wealth of palm trees around the driveway. When I walked up to the door, it opened, as if by magic. A butler (or waiter, or maybe both) led me into a small reading room where the 88-year-old Munger, a lawyer by trade and longtime colleague and investing partner of Buffett, was seated in an easy chair, using a large magnifying glass to read a hardcover book. The man is a voracious reader. ("Charlie has read about as much as anybody I know, Buffett later told me. "He's 88 now, and when he's 98, he'll remember everything he read. That's the difference; I read it, and I enjoy it, but I don't remember a damn thing."
Charlie and I went to his dining room, where, with my recorder on, we began talking immediately about See's Candies, the brand he convinced Buffett to buy in 1972 for $25 million. The first thing immediately apparent about Munger is that in business and beyond, he knows everyone and remembers everything. At each turn he is able to recall specific and obscure anecdotes about buyouts and bankruptcies that relate in some way to the subject at hand. He talked about when Hershey's (HSY) first tried to expand into Canada. He waxed about Kodak ("People think the whole thing failed, but they forget that Kodak didn't really go broke, because Eastman Chemical did survive as a prosperous company and they spun that off") and about P&G ("Procter & Gamble, they just make a fortune on some of the body products. Some of these brands, I mean, if you can make something that actually improves the skin, wow. That's the last thing people will give up"). He may not possess the obvious, gleeful sense of humor of Buffett, but Munger has the ability to make you laugh even as he's discussing something completely dry and practical.
As the same man who had led me into the house served up breakfast (scrambled eggs, home fries, and delicious bacon), Munger talked about the strengths of See's over the years. In his estimation, it has made all the right decisions, both before Berkshire got there and since. "There are a lot of boxed chocolate companies; it's an old human desire," he said. "People like those little pieces." But See's worked hard, he said, to prevent cannibalizing its own stores, and has always had a cautious nature that helped it succeed in the long run. "And of course," he added, "We haven't basically touched it at all." He pointed out the significance of See's as a gift item. "Who wants to give a gift that announces 'I'm a cheap ... ' You know."
Re Forbes - Warren and Charlie and the Chocolate Factory
Posted by: robertcray (IP Logged)
Date: August 22, 2012 07:23PM
They've owned it for over 40 years and are only now starting to expand outside California and the West? They could have more than doubled their returns (which have been very nice anyway). I think Jeff Matthews went over this in his book about going to an Berkshire Hathaway annual meeting.