Charlie_Munger_ValueWalk_PDF_final

CHARLIE MUNGER
This mentality had a dramatic effect on Berkshire Hathaway’s performance over the years. All you need
to do is to look at Buffett’s acquisition of See’s Candies in the late 1960’s, to realize that without Charlie
Munger’s quality over value influence on Buffett, Berkshire wouldn’t have become the American corporate
giant it is today.
Buffett’s Early Investment Performance Was Driven By Activism
Warren Buffett’s investment strategy has changed over the years. From a deep-value nets-nets investing
methodology to today’s, quality at a reasonable price philosophy, Buffett’s portfolio has undergone
several changes.
But in the early days of Buffett’s partnerships, the then undiscovered Oracle of Omaha used an activist
strategy to get results, the use of which allowed him to make big bets with a highly concentrated portfolio.
Indeed, reading through Buffett’s early partnership letters to shareholders (mid 50’s to late 60’s), almost
all of the investment examples he gives are activist situations. He often devoted around a fifth or more of
assets under management into each situation.
Buffett’s activism in Dempster Mill
For example, Buffett started acquiring stock in Dempster Mill, a manufacturer of farm implements and
water systems, during 1956 when the stock was selling at $18, while book value stood at $72 per share
— current assets amounted to $50 per share.
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Charlie
ValueWalk
Munger
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