Warren Buffett and Charlie Munger on how they first met
During the Q&A Sessions of the 2002 Berkshire Hathaway’s Annual Meeting:
Question: Hello, Mr. Buffett and Mr. Munger. I am 12 years old. My question is not about money. It’s about friendship. How do you remain friends and business partners for so long? And what advice do you have for young people like me in selecting true friends and future business partners? Thank you.
Buffett: Well, when Charlie and I met in 1959 we were introduced by the Davis family, and they predicted that within 30 minutes we would either not be able to stand each other or we would get along terrifically.
And that was a fairly insightful analysis, actually, by the Davises, because you had two personalities that both had some tendencies toward dominance in certain situations (sidenote: Buffett probably meant that both Munger and he tend to be intellectually dominant in conversations.) .
But we hit it off. We have disagreed, but we have never had an argument that I can remember at all in 43 years. And yet we both have strong opinions and they aren’t the same strong opinions at times.
But the truth is we’ve had an enormous amount of fun together, we continue to have an enormous amount of fun, and nothing will change that, basically. It may have worked better because he’s in California and I’m in Omaha, I don’t know.
In an interview with CNBC released on June 29th 2021 (a), Warren Buffett and Charlie Munger touched on the topic of their own friendship again. They shared more details on how they first met and why they instantly hit it off:
Buffett: There was a doctor couple, very prominent in Omaha, and his name was Eddie Davis, her name was Dorothy Davis. And it was Mrs. Davis that called me, actually. She did everything. She said, “We’ve heard that you manage money, and we’d be kind of interested in listening to your story about how you do it, and what we might do with you.”
So I went over and I talked to them. And I was all full of myself. You know, I couldn’t talk fast enough about stocks in those days. And Dorothy Davis, [who’s] very smart, listened to every word. The doctor was kind of over in the corner, submitting a yoyo or something, and really not paying much attention. And I got all through and the wife looked over at the doctor, [who] said, “I’m gonna give him $100,000.” And I was managing about $500,000 at the time, so it was a big deal.
In a very nice way, I said, “Dr. Davis, you really haven’t been paying much attention to what I’ve been saying and everything. I’d kinda like to know why you’re giving me this $100,000.” And Dr. Davis looked at me and he said, “Well, you remind me of Charlie Munger.” And I said, “Well, I don’t know who Charlie Munger is, but I like him.” And he gave me $100,000.
And then they told me about Charlie. [As a] young kid, how he would be over there asking them questions on medicine, and giving them lectures. I mean, they clearly loved him. And it sorta became their mission that sometime they wanted to get me and Charlie together. So, in 1959, Charlie’s dad died and he came back to Omaha. His mother lived there and the Davises really got us together.
So they arranged the dinner. And about five minutes into it, Charlie was sort of rolling on the floor laughing at his own jokes, which is exactly the same thing I did. So I thought, “This, I’m not gonna find another guy like this.” And we just hit it off.
Buffett: Both of our wives thought, “My god, another one.”
Two years after Buffett first heard Charlie’s name, the two men met. “In 1959, when Charlie’s dad died, he came back to help settle up. The Davises arranged a dinner. We hit it off immediately,” said Buffett.
The Davises that Warren now referred to were not the doctor [Edwin Davis] and his wife [Dorothy Davis], but rather the Davis children, who had been Charlie’s childhood playmates. Both Davis boys, Eddie and Neil, became doctors and by then the daughter, Willa Davis, was married to Omaha businessman Lee Seemann. It was Neil who arranged dinner at the old Omaha Club. The party included Willa and Lee Seemann, Joan and Neil Davis, Charlie and Warren. “It was electric in a really nice way,” recalled Willa.
Munger had heard other people mention Warren as well, but he did not have particularly high expectations about meeting him. “I knew everyone in the Buffett family except Warren,” said Charlie. Munger noticed a few things about the bespectacled young man right away. “He had a crew cut. Warren was working out of a sunporch at his house, and his dietary habits were toward Pepsi, salted nuts, and no vegetables.” Charlie, who considers himself fairly tolerant about such matters said, “Even I get surprised watching Warren eat breakfast.”
His minimal expectations of the meeting were unjustified. Munger, who is reserved in his judgments, was floored. “I would have to say that I recognized almost instantly what a remarkable person Warren is.”
Charlie began asking questions immediately about what Buffett did for a living and how he did it and was fascinated by what he heard. The following evening another mutual friend, Dick Holland, invited both to dinner. Warren, who was then 29, and Charlie, 35 years old, again fell into deep conversation. Charlie was so wrapped up in what he was saying that when he raised his glass to sip his drink, he held his other hand up to stop anyone else from interrupting the conversation.
The Kunhardt Film Foundation has released on YouTube the full interview that they did with Charlie Munger for the documentary Becoming Warren Buffett. Right at the beginning of it, Munger comments on their first encounter:
Munger: When I first met Warren, I recognized immediately that he was a very intelligent person.
And, of course, he was interested in the subject that I was also interested in, which was the process of being a successful investor.
And we have a similar sense of humor, we had a high old time probably making ourselves obnoxious to the other people in the room.
We both came from Omaha. We both worked in his grandfather’s grocery store. So, we had a lot of common experience.