Charlie Munger, who was Warren Buffett's right-hand man, dies at 99

By Jonathan Stempel

(Reuters) -Charlie Munger, who quit a law career to become Warren Buffett's trusted confidant and longtime second-in-command at Berkshire Hathaway, died on Tuesday morning. He was 99.

Berkshire said Munger died peacefully at a hospital in California, where he lived. No cause was given. Munger would have turned 100 on Jan. 1.

"Berkshire Hathaway could not have been built to its present status without Charlie's inspiration, wisdom and participation," Buffett, Berkshire's 93-year-old chairman and chief executive, said in a statement.

Munger had been a Berkshire vice chairman since 1978, working closely with Buffett on allocating the Omaha, Nebraska-based conglomerate's capital, and being quick to tell him when he was making a mistake.

"It's a shock," said Thomas Russo, a partner at Gardner Russo & Quinn in Lancaster, Pennsylvania, and longtime Berkshire shareholder. "It will leave a big void for investors who have modeled their thoughts, words and activities around Munger and his insights."

Investors expect Munger's death to be felt keenly by Buffett and the investing world generally.

"He was certainly one of the greatest investors, as a team with Buffett," said Rick Meckler, partner at Cherry Lane Investments in New Jersey. "I'm sure it is an enormous loss for Buffett personally."

Munger was known for steering Buffett away from purchasing what Buffett called "cigar butts" -- mediocre companies at very cheap prices -- and instead favoring quality over quantity.

"Charlie felt that buying very good businesses at fair prices that could keep compounding and reinvesting cash flow into continued growth was more consistent with how he and Warren were philosophically and liked to invest," said Paul Lountzis, president of Lountzis Asset Management in Wyomissing, Pennsylvania. "They liked to own businesses forever."

Thomas Hayes, chairman of Great Hill Capital in New York, said the "big change that Charlie brought to the value investing community was not just looking for what was cheap but looking for what was out of favor but high quality."

BERKSHIRE IMPACT

Investors said Munger's death was unlikely to have a major impact on Berkshire's operations.

Two other vice chairmen, Greg Abel and Ajit Jain, have day-to-day oversight of Berkshire's non-insurance and insurance businesses, respectively.

Abel is expected to become chief executive once Buffett, 93, is no longer in charge.

Berkshire's businesses include the BNSF railroad, car insurer Geico, and an array of energy, industrial and retail operations, as well as familiar consumer names such as Dairy Queen, Duracell, Fruit of the Loom and See's Candies.

It also owns hundreds of billions of dollars of stocks, led by Apple.

"I wouldn't think Berkshire will look much different, apart from Buffett no longer being able to share ideas with Munger," said Russo. "Berkshire may be a little less fun without him."

Berkshire's annual weekend, which draws tens of thousands of people to Omaha, will be different, with Munger no longer sharing the stage with Buffett to answer dozens of shareholder questions over five hours.

"The annual meeting will never be the same without Charlie's terse, open and honest comments," Lountzis said. "He was so different from Warren, in the sense that Charlie said what he thought, and didn't give a damn what anyone else thought."

Munger's death comes a week after Buffett himself donated about $866 million of Berkshire stock to four family charities.

The announcement was notable because of Buffett's acknowledgment that his own time is finite, as he moves nearer the end of his storied investing career.

Buffett again pledged that more than 99% of his wealth would go to charity, and that Berkshire was "built to last" and would remain in good hands without him.

He has never publicly signaled a desire to step down, including after a prostate cancer diagnosis in 2012.

"At 93, I feel good but fully realize I am playing in extra innings," Buffett said in last week's letter.

(Reporting by Jonathan Stempel in New York; additional reporting by Lewis Krauskopf and Chibuike Oguh Editing by Megan Davies and Rosalba O'Brien)