Quote of the Day by Charlie Munger: ‘The turtles who outrun the hares are…’

Charles Thomas Munger, co-founder of Berkshire Hathaway alongside Warren Buffett, has built a following of his own among investors. The late billionaire left behind a treasure trove of tried and tested investing advice over the years. Even Buffett (95), dubbed ‘The Oracle of Omaha’ due to numerous impeccable investment decisions over the years, credits Munger for teaching him a few.

In an obit piece after Munger passed away in November 2023, Bloomberg noted his importance as a “straight man and scold of corporate excesses” who provided a reality check and balance against Buffett's fame and wealth.

The above quote is from his 2007 University of Southern California (USC) Law school commencement speech, where he was sharing an example of business partner and long-time friend Buffett. “Warren is one of the best learning machines on this earth. The turtles who outrun the hares are learning machines. If you stop learning in this world, the world rushes right by you,” he stated.

Further during the speech, Munger noted that Buffett is continously learning and their record at Bekshire would have been “absolutely impossible” without the ‘Oracle of Omaha’ being a “continuous learning machine”.

Speaking to students, Munger emphasised among other things the need to read books across subjects that have nothing to do with your specialisations or jobs. He further explained that Buffett “spends half of all time sitting and reading. And a big chunk of the rest of the time is spent talking one-on-one either on the telephone or personally with highly gifted people whom he trusts and who trust him”.

The key takeaway from Munger's speech are that learning is a continous process and much wisdom can be absorbed from the company we keep. It is wise to rely on the people around you, especially those with expertise. And that there is only benefit in broadening your information base, rather than being restricted to only the sectors or spaces that you are comfortable with.

A lawyer by training, Munger helped Buffett, who was seven years his junior, craft a philosophy of investing in companies for the long term. Buffett has credited him with shaping Berkshire Hathaway’s investing style and pushing the ‘Oracle of Omaha’ away from cheap “cigar-butt” stocks toward high-quality businesses at fair prices.

Under their management, Berkshire averaged an annual gain of 20% from 1965 through 2022 — roughly twice the pace of the S&P 500 Index. Decades of compounded returns made the pair billionaires and folk heroes to adoring investors.

Munger was vice chairman of Berkshire from 1978 until the day he died at 99 in 2023. He was also among the company's biggest shareholders, with stock valued at about $2.2 billion. His overall net worth was about $2.6 billion, according to Forbes.