I stumbled upon an excellent interview of Ron Olson recently and thought it was worth sharing with our readers. Here is the link followed by my favorite parts of the interview.
1. How Charlie Munger and Warren Buffett could work together even though they are so different in many ways
Honesty, rationality, mutual admiration and respect. The result is that their thinking dominates their relationship and how they analyse problems and people. But in the end, it is mutual respect.
2. What Charlie and Warren bring to the table to Berkshire
Shared values and different roles; Charlie sees Warren’s wide set of abilities that he brings to bear for Berkshire’s benefit. His analytical skills with numbers, financial analysis, ability to assess people, to inspire people, to see around corners, to know that tomorrow’s headline will be based on today’s actions and his desire to be out front. Charlie admires all that about Warren. He has a lot of qualities and values like Warren but he doesn’t want to be out front.
He doesn’t see himself as especially appealing to others. He recognises that he can be brutally honest in a way that people don’t like. Warren is charming, his role at Berkshire is different from Charlie’s. If they were both trying to do the same thing, it wouldn’t have worked as well but it works very well the way it is.
3. How Warren and Charlie are different and how they settle disagreements
With me and others, Charlie’s rationality is always present. You can have disagreements without being disagreeable. Charlie influenced Warren to change his investment policy in looking to deploy more capital in buying great businesses at fair prices as opposed to fair businesses at great prices. So, I think Charlie influenced that over a period of time in Warren’s thinking. I think there are instances where they continue to see things differently.
What Warren has done with his money philanthropically is very different than what Charlie has done with his. Charlie loves to engage his philanthropy, think about it and be a part of it. Warren doesn’t think he is good at it and he just wants somebody else to run that part of his life. So, I think there are fundamental differences in the way that each of them do some things. But at the same time, there is mutual respect and they both understand what motivates the other.
4. The advantages of having Charlie Munger (Trades, Portfolio) as a partner
He is a fountain of wisdom that we consult on everything, from family problems to professional problems. He is very old and wise. He just seemed to have so much more wisdom, knowledge and character than anybody I had been around. As a result, he continued to expand on those fundamental impressions. It is no surprise. This is a man who has devoted his life to learning. He consumes several books a week. He reads broadly from philosophy and history to business to psychology, you name it. He loves biographies because he considers them a wonderful tool for teaching life that works and doesn’t work; the paths of success and of failure and the frailties and failings of human beings. And he’s able to take that information, categorise, remember and apply it like no other human being I have been around.
Charlie is as good as I am going to get. As I referenced, he is a fountain of wisdom. I think EO Wilson wrote, “Today we are drowning in information but starving for wisdom.” And Charlie is wisdom. Having access to him has made both institutions, our law firm and Berkshire Hathaway (BRK.A, Financial) (BRK.B, Financial), better.
I can think of acquisitions we didn’t make at Berkshire because he didn’t believe business could be sustained as it was conceived. So, we haven’t made certain acquisitions and haven’t made certain mistakes. At the law firm, he is like having an in-house client and a very hard grating client, who is able to capture the views of many clients and express them directly to us. He has taught us about how important it is to be brutally honest in our billing and in rejecting matters we don’t have the competence for.
5. Qualities of Charlie Munger (Trades, Portfolio) that Olson picked up
His devotion to life-long learning is certainly one. I suppose the second would be his extreme honesty with himself and others. I emphasise: himself as well as others. He can be brutally honest and has no time for people who engage in self-pity. His advice to people who are unhappy: lower your expectations. He believes devotion to life-long learning and honesty, even if it is brutal or unkind at times is a path to a better life. He encourages people to continue to test the ideas that motivate their life.
Make sure they are as valid today as they were before. If they aren’t, you should discard them and move on. So, those are a few that I have tried to pick up. He is very satisfied being by himself, having time to read. He doesn’t need a lot of acclamation. He has become increasingly popular with people in the last 10 years, something that I don’t think he encouraged but people have begun to appreciate his wisdom more broadly than previously.
