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Rupert Hargreaves
Rupert Hargreaves
Articles (593)  | Author's Website |

Munger and the Power of Persistence

The guru's life has been full of tragedy, but this hasn't stopped him from pursuing his dreams

September 06, 2018 | About:

Charlie Munger (Trades, Portfolio), the vice chairman of Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B), receives plenty of attention for his witty comments and informative thoughts on investing and other topics. He is, truly, an intellectual first and an investor second.

There's one part of his life that is often overlooked, however, and that is his strength in the face of adversity and defeat.

The power of persistence

While building a multibillion-dollar fortune, Munger's life has also been dominated by pain, grief and disaster.

According to Janet Lowe's book, "Damn Right," the first major hurdle Munger had to overcome in his life was the divorce from his wife after eight years of marriage at the age of 29 in 1954. According to the book, he lost everything and was forced to move into "dreadful bachelor digs" at Pasadena’s University Club.

The financial pressure the young Munger had to deal with was hard but manageable. Unfortunately, his situation only got worse when, a short time after the divorce, his nine-year-old son, Teddy, was diagnosed with leukemia. He died in 1955. According to Munger's friend, Rick Guerin, he would visit the hospital when his son "was in bed and slowly dying, hold him for a while, then go out walking the streets of Pasadena crying."

For most people, this trifecta of tragedies would have floored them. But Munger had a desire within him to keep going. He was not a wealthy man at the time. In 1949, he was hired at the law firm of Wright & Garrett for $3,300 per year, or $29,851 inflation-adjusted.
Munger managed to pull through these events and get on with life, advancing in his career and eventually getting into investment management, which is when his relationship with Warren Buffett (Trades, Portfolio) started.

But life wasn't done with him yet. Cataract surgery in his left eye rendered him blind. He was in so much pain, the eye eventually had to be removed. Soon after, doctors diagnosed him with a condition that caused his remaining eye to fill up with blood. For some time, the guru was faced with the genuine possibility of losing all his sight. Fortunately, his condition has improved.

I think it is a mistake to overlook these painful chapters in Munger's life. It is important to acknowledge that while he has a fantastic reputation today, he has had to work extremely hard to get there.

Overcoming adversity

Munger often talks about building your circle of competence and advancing your knowledge of the world to become a better investor and thinker. He rarely touches on the topic of overcoming adversity and driving toward the end goal, no matter what life throws at you.

The adversity great investors (or any other individual for that matter) have overcome to get where they are today is often overlooked. It shouldn't be. Life isn't easy, and it requires a great deal of experience and drive to be successful. It is the Cinderella principle. If you read about Buffett and Munger's lives, it is easy to assume they have risen to success on one upward, smooth trajectory. Much like Cinderella, when she lived happily ever after, after one night at the ball. What you don't see is the years of hard work, sweat and blood it has taken to get to where they are today.

Munger has been able to get ahead as a result of his persistence, carrying on when he was divorced, broke and burying his son. It is important to remember this.

Disclosure: The author owns shares of Berkshire Hathaway.

About the author:

Rupert Hargreaves
Rupert is a committed value investor and regularly writes and invests following the principles set out by Benjamin Graham. He is the editor and co-owner of Hidden Value Stocks, a quarterly investment newsletter aimed at institutional investors.

Rupert holds qualifications from the Chartered Institute for Securities & Investment and the CFA Society of the UK. He covers everything value investing for ValueWalk and other sites on a freelance basis.

Visit Rupert Hargreaves's Website


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