Charlie Munger
Charlie Munger wanted his tombstone to say one thing: “He tried to be useful.”
Not “He was brilliant.” Not “He built Berkshire Hathaway.” Not “He was the greatest business mind of the 20th century.” Just useful. It is either profound humility or the most elegant personal brand statement ever written — possibly both.
The Partnership That Almost Wasn’t
The standard story of Berkshire Hathaway begins with Warren Buffett. The full story begins with a mutual friend who said: “You two are the two nerdiest dudes I know. You should meet each other.”
Buffett and Munger met when Buffett’s partnership was already under duress. He held 70% of his assets in two problem investments: Sanborn Maps, a publicly traded mapping company, and Dempster Mill, a struggling industrial company in Nebraska. If either went badly, there was no warren-buffett story. No berkshire-hathaway. No annual shareholder letters that half the business world reads.
Buffett told his new friend about Dempster Mill. Munger knew a guy — Harry Bottle, an accountant in LA. They took Bottle to lunch and convinced him to move his family to the Midwest to run the failing company. Bottle turned it around. Buffett started stacking, as brent-beshore would later call it, geese.
As Beshore recounted on the podcast: “Everyone in the beginning — you don’t get to be successful without taking risks. All investing is taking risk. The question is just how much risk you’re willing to take.”
The EBITDA Principle
One of Munger’s cleaner instructions has been on the show multiple times: whenever you see the word EBITDA, substitute it with “earnings.”
Beshore endorses this without hesitation:
“EBITDA can be a useful tool in some very limited circumstances, but for the most part it’s dressing up something that is more often than not obvious — skating reality. When you see EBITDA, especially in the small business world, there usually comes a ton of capex and a lot of reinvestment needs on the back end. What you have to really do is figure out: in a steady state, what is the business actually producing in free cash flow?”
The history of EBITDA is instructive. John Malone — the cable cowboy who built Liberty Media — invented the metric in the mid-1980s specifically to convince banks to lend him money against businesses with heavy depreciation. It was a tool designed to make a leveraged balance sheet look more favorable. It served its purpose. Then it became universal and unexamined.
Munger’s instruction is not that EBITDA is always misleading. It is that readers should never accept it without asking: what is this hiding?
The Power Law of Everything
Charlie Munger observed that if you remove the top five decisions from Berkshire Hathaway’s 50 to 60 years of deal-making, its returns fall to average.
Morgan Housel repeated this on the podcast as part of a broader point: the power law is not a quirk of investing. It is the structure of every consequential endeavor. Most things don’t work. A small number of things work spectacularly. The job is not to avoid failure — you cannot. The job is to find the few things that work and not get shaken out of them.
shaan-puri connected this to Mohnish Pabrai’s interpretation of Buffett’s strategy: once you find the long-term compounders, you circle the wagons. You never let anything attack those core assets. The phrase Buffett stole from Peter Lynch: “Don’t cut your flowers and water your weeds.”
The Incentive Master Who Admitted He Didn’t Know
andrew-wilkinson had dinner with Munger and asked him the question he thought Munger would have the best answer to: what is the perfect incentive structure?
Munger said he had done hundreds of deals. Everyone was different. He still didn’t know what worked.
“I think it’s really an art, not a science.”
This from the man who arguably systematized more of business and investing than almost anyone else of his era. The lattice of mental models, the checklist approach, the multi-disciplinary thinking — Munger built frameworks for everything, and then readily admitted to a visitor over dinner that his frameworks didn’t resolve the hardest problem.
The willingness to maintain uncertainty after decades of experience is one marker of genuine intellect. The charlatan becomes more confident as they age. The expert becomes more precise about the boundaries of what they know.
The Buffalo News Revelation
One correction the podcast offers to the standard Munger mythology: the idea that Berkshire bought companies and simply left them alone is a retrospective reading.
In the early years, Munger and Buffett were intensely operational. When they bought the Buffalo News, they were in Buffalo. Writing headlines. Specifying how many ads should appear on a page. Behaving like product-obsessed operators, not passive capital allocators.
As Beshore observed: “That letter is so different from the image you get of Buffett just sitting in his room reading all day, making investment decisions off of financial sheets.”
The model evolved. As capital scaled faster than attention, they became less operational by necessity. The “we just find good businesses and stay out of the way” philosophy emerged from constraint, not principle.
What He Was Actually Optimizing For
The tombstone inscription clarifies the life.
Munger wasn’t trying to be the smartest person in the room, though he often was. He wasn’t trying to accumulate a particular number. He was trying to be useful — to Buffett, to Berkshire shareholders, to students of business, to anyone who read his letters and speeches and came away with a clearer view of how the world actually worked.
The Poor Charlie’s Almanack, his collected talks and writings, reads like a summary of someone who read everything relevant across disciplines and then spent decades field-testing the ideas against real decisions with real consequences.
That approach — read widely, think clearly, act consistently, measure against reality — is the simple version. Munger’s life is evidence that the simple version, applied with enough rigor over a long enough time, becomes extraordinary.
He died in 2023, a few weeks before turning 100.