Munger ‘ran a mile from win-lose deals’, says his Aussie ‘soulmate’

“I never expected to become his friend.”

Mr Munger was the vice chairman of the $US780 billion ($1.2 trillion) Berkshire Hathaway and the close business partner of the world’s most famous investor, Warren Buffett. Mr Munger had a net worth estimated at $US2 billion, according to Forbes.

‘Running a mile from win-lose deals’

Mr Jennings said: “The world’s lost a great capitalist and one of its wisest men.

“Capitalism can get a bad name from the shonkier practices. But Charlie was an example of a great capitalist in that he wanted to do win-win deals.

“He was running a mile from win-lose deals that he could have made massive amounts of money from where counterparties were going to be worse off.”

“The rule is that you don’t want to be in a business where the counterparties of the business lose - whether it’s customers, employees, communities, regulators, shareholders, or suppliers.

“You seek situations where everyone gets a net win from the existence of the business.

“This isn’t about altruism. Win-lose businesses are inherently unsustainable in their cashflows.”

Mr Jennings said Mr Buffett and Mr Munger had turned Berkshire into an education platform for millions of investors around the world.

“They shared their views on how capitalism should work and how the world should work.”

How Jennings befriended Munger

Mr Jennings, an American-Australian, had followed Berkshire for about 25 years before coming into direct contact with Mr Munger in early 2021.

They were connected via the University of Chicago’s endowment manager who endorsed Stonehouse to the Berkshire vice chairman.

The pair began talking on Zoom calls during the pandemic lockdowns, before Mr Jennings first visited Mr Munger’s Los Angeles home in January last year.

Mr Munger ultimately made a personal investment into Stonehouse’s fund last year, telling the Financial Review that Mr Jennings was a “soulmate” of Berkshire.

‘He has a mindset very much like ours’

“I got interested in one Australian because I think he’s very much like the kind of people that are in Berkshire,” Mr Munger said in June last year.

“Berkshire and Jennings are quite similar.

“He’s picky and manages things well. He has a mindset very much like ours. Business fundamentalism and relentless rationality and doing business in a very high-grade way.”

“If you’re relentlessly rational, you don’t make a lot of mistakes other people made.”

“It sounds so obvious. You think everybody’s willing to stay rational, but of course they aren’t, the world’s full of madmen.”

Sense of humour

Mr Munger’s investment tips to the Financial Review at the time were; look beyond the inflation spike, back both fossil fuels and renewable energy, and “never touch” cryptocurrencies.

Business and investing were not the only topics Mr Munger and Mr Jennings discussed in their dozens of conversations.

Mr Jennings recalled Mr Munger’s sense of humour.

“He said to me once: ‘It’s so weird being 99 because all of my friends are dead, so I have to make new friends like you.’”

Mr Munger’s life advice was to get a good spouse.

“He said it in the funniest of ways: ‘You should marry the best person who will have you.’”