They met at a dinner party in Omaha in 1959 and took an instant liking to each other. "He was rolling on the floor laughing at his own jokes, and I thought, That is my kind of guy -- I do the same thing," Buffett says. They started sharing investment ideas immediately, and Munger joined Berkshire Hathaway (Fortune 500) 19 years later. The two are still together, though they operate remotely -- CEO Buffett, 83, in Omaha, and vice chairman Munger, 89, in Los Angeles. Each spring they sit side by side onstage at the Berkshire annual meeting, dispensing snippets about investing, business, and life to some 30,000 shareholders and worshipers. But it's rare to get this most successful investment duo talking, as they did here in Chicago, about what they've learned from each other. --P.S. ,
Munger: The best advice I ever got from Warren was to stop practicing law. Warren was very derisory about my chosen profession, which had been in my family for a couple of generations. He thought it was all right as a hobby, but as a business it was pretty stupid.
Buffett: It didn't use his full talents. If he really wanted to get in an interesting game, he should leave law and get into my game. In law, to a great extent, you're an agent for your principal. Your job is there to serve somebody else. I got to serve myself, to implement my own ideas. And I knew Charlie was cut the same way.
Munger: I kept one foot in the law practice until I knew it was going to work, and then I removed that foot. It took only a few months.
Buffett: I had been oriented toward cheap securities. Charlie said that was the wrong way to look at it. I had learned it from Ben Graham, a hero of mine. [Charlie] said that the way to make really big money over time is to invest in a good business and stick to it and then maybe add more good businesses to it. That was a big, big, big change for me. I didn't make it immediately and would lapse back. But it had a huge effect on my results. He was dead right.
Munger: I have a habit in life. I observe what works and what doesn't and why.
Buffett: The first real business we bought that way was See's Candies. It was an outstanding business. From my past, I didn't want to pay the last few million dollars.
Munger: The last few million? You didn't want to pay the last $25,000!
Buffett: Charlie kept reminding me that I was slipping into the Stone Age again. He's given me a lot more advice than I've given him. He lives a very rational life. I've never heard him say a word that expressed envy of anyone.
Munger: There's an old saying, "What good is envy? It's the one sin you can't have any fun at."
Buffett: Temperament is more important than IQ.
Munger: The other big secret is that we're good at lifelong learning. Warren is better in his seventies and eighties, in many ways, than he was when he was younger. If you keep learning all the time, you have a wonderful advantage.