B000U5KFIC EBOK (11 page)

"When the divorce happened, Teddy said, I'm going to live with
Daddy," Molly recalled. "He didn't."

Though he was in California, far from those roots, Munger got
through that time by following the rules he learned in Omaha. "He was
living in dreadful bachelor digs at the University Club," said Molly. "But
there was not slippage. Every Saturday he was there. Every Saturday he
was cheerful. He took us to the zoo, pony rides, took us to see his friends.
Divorce in the 1950s was not a normal thing. We were very, very conscious of having a traumatized life compared to what else was going on.
He drove this awful car-a yellow Pontiac. He always had great style,
expressed it in his clothes but the car made it look as if he had not two
pennies to say hello to each other. This yellow Pontiac had a cheap repaint job. I remember going up to the car in the University Club garage,
and I said, 'Daddy, this car is just awful, a mess. Why do you drive it?' 'To
discourage gold diggers,' he replied."

Charlie and the first Nancy had been separated a short time when
they were told that their son Teddy was gravely ill with leukemia, a disease that had taken the life of Teddy's maternal grandfather. Charlie was stunned by the news. It went against everything that he'd experienced,
everything that he'd dreamed. "He knew how to have a boy, be a loving
father, and he was going to do it all over again," said Molly, but with
Teddy, at least, that wasn't to be.

When Teddy Munger became ill, Charlie and his wife sought the best
medical help they could find. The child had a blood disorder that allowed
almost no chance of remission. Today, a child with leukemia has an excellent chance of full recovery.

"This would he in the early 1950s, you see," said Hal Borthwick.
"They didn't really have anything that they could do for leukemia. Nothing. No bone marrow therapy-forget it. Even now, it is not an easy thing,
but there are a lot more options. But in those days you just literally sat and
watched your kid die by inches."

First the divorce, then Teddy's illness affected all areas of Munger's
life. In those days there was no medical insurance," said Munger. "I just
paid all the expenses. You'd have a bonding experience in the leukemia
ward. Parents and grandparents were having the same experience. They
were all going to lose. In those days it was 100 percent. I've often wondered how professionals are able to steel themselves when dealing time
after time with children facing mortality rates so high."

His friend Rick Guerin described the 29-year-old Charlie's grief: "He
said when his son was in the bed and slowly dying, he'd go in and hold
him for a while, then go out walking the streets of Pasadena crying."

But Munger tried to live a normal life. After the divorce, a law partner introduced him to a young divorcee, Nancy Barry Borthwick. She also
had two young children, and Charlie and the second Nancy began taking
their youngsters on outings together. At first the entourage included
Teddy.

"I knew he was very sick, and I knew lie was dying," recalls Hal
Borthwick. Hal was about Teddy's age, and met the boy when Charlie and
Nancy took the children to a private beach club on the Pacific Coast Highway. The club was affectionately called The Filthy Fifties, so named by a
rival club because of the number of members. The second Nancy's family
had been members for years.

"I do remember being down there one day with Teddy, and it was
fairly near the end," recalled Hal. "I asked if he wanted to go play and he
said, `No, I really can't. I'm just too tired.' He was-you know ... you
could tell ... What nine-year-old boy doesn't want to play at the beach?
He was just too tired."

In 1955, one year after the diagnosis, Teddy Munger died. "I can't
imagine any experience in life worse than losing a child inch by inch," said Munger. "By the time he died my weight was down 10 to 15 pounds
from normal."

Hal Borthwick said that for the other children the end had a surreal
feeling to it. "I don't have any recollection of going to the funeral or anything like that. I don't even know if Molly and Wendy went to it. In fact, I
don't even know if there was a funeral. Teddy just sort of disappeared."
There was a small religious service for Teddy but because Nancy and her
sons weren't family yet, they did not attend.

Though the adults knew what was coming, Teddy's death also
shocked his younger sisters. "We didn't know at all he was going to die,"
said Wendy. After he did. "We each kind of held our breath when we got
to nine years old and released it when we got to ten. It was a silly kid
thing to do, but I didn't like it when my kids were nine either."

With Charlie living at his club and Teddy gone, the once cozy threebedroom, two-bath house Munger had built on Edgewood Drive in South
Pasadena became a lonely place situated on a quiet street surrounded by
gracious homes and majestic trees, it is only a block from Wendy's present home. Even after so many years, it looks like a sad little house to Molly
and Wendy when they drive by.

"Molly and I lived in that house until 1957, then mother remarried,"
said Wendy Munger.

Charlie's first wife married radiologist Robert Freeman, one of the
doctors who tended to Teddy Munger during his illness. Molly and Wendy
felt that their mother's remarriage definitely improved their lives. They
moved from the modest Edgewood Drive house to a much grander home
on Madeline Street. Next door was the Westridge School for Girls, where
Molly and Wendy soon enrolled. Now, they lived in a "big house, with an
attic, basement, many rooms. It was a wonderful thing for a nine-yearold," said Molly. "Daddy had married, was producing babies. Our stepbrother Hal was a very special person. Just a hoot. I knew he had great
relative potential. He was just my age, reactive, an idea a-minute type kid.
My stepfather was more grandfatherly. He had his own children who
were older than we were and a building medical practice. He doted on us.
Daddy would cone and get me. I very shortly thought it was a happy outcome to a had situation. It was fine."

Dr. Freeman, the son of a local Presbyterian minister, played the accordion each week at the Kiwanis Club and served on the local school
board.' Life began to brighten all around. Wendy Munger does not remember the transition from one family structure to the next, but she soon
became aware of the advantages.

"I always said I had the best of both worlds," said Wendy. "I immediately got two stepparents that I liked and lots and lots of new relatives. It
was a smooth thing for me. Both my mom and my dad spoke highly of one
another. I just loved it, being part of a big family."

AT AGE 76, CHARLIE MUNGER LOOKS back on those years and notes that time
takes some of the pain out of losing a child. If it didn't, he says, he doesn't
know how the human race could continue. Munger believes that by coping as best he could with the tragedy of Teddy's death, he was doing the
only rational thing. "You should never, when facing some unbelievable
tragedy, let one tragedy increase to two or three through your failure of
will." As for the end of his marriage, the years have given Munger a mature perspective on that as well:

I don't spend much time regretting the past, once I've taken my lesson from
it. I don't dwell on it. Certainly I had more sense when I was 32 than I did
when I was 22. But I don't have any feeling of terrible regret. We ended up
with nice children. I think my ex-wife has been reasonably happy in a different situation.

Years later, Munger compared the marriage process to the investment process, though perhaps he wasn't speaking specifically of his own
experience. "Life is a whole series of opportunity costs," said Charlie.
"You've got to marry the best person who is convenient to find that will
have you. An investment is much the same sort of process."

That pragmatic statement masks his devotion to his second wife,
Nancy, and certainly throws up a shield around the trouble and sorrow
Munger experienced before he finally settled into a happy situation. The
second Nancy insists Charlie is very affectionate, but said he is a little
"uptight" about showing his feelings. Charles Munger, Jr., Nancy and
Charlie's first son, suggested that his father's strength, his ability to resolutely move on from the past, also is his Achilles heel.

"His son died, his marriage ended, he lost a lot of money," said
Charles, Jr. "He just walks away from that (emotionally). Dad says to himself, that doesn't work. Don't revisit it. There are some things my dad
could deal with better if he faced them more. My dad, if he had a bad experience in a town, in a restaurant, he would not go back. I'd try again."

And yet Munger did try marriage again, and in this second union,
said Charles. "Both Mom and Dad found what they lacked in their first
marriages."

CHARLIE'S DREAM OF A LARGE FAMILY was about to be realized, and Munger
was determined that the children would be raised and educated well. He
knew that if he was to earn sufficient income, he would have to apply all
his talents to the task. He already was a hard-charging lawyer, and gradually his need for additional income drew him into the business world.

"He was always interested in money," recalled Molly. "He was always good at money. He invested in the stock market. He talked about
business in a way that was animated and interesting though now I see he
was almost broke. I knew he drove an awful car. But I never thought he
was anything but a big success. Why did I think that? He just had this
air-everything he did was going to be first class, going to be great. He
was going to put in a patio on Edgewood Drive. He was going to get a
boat for the island. He was going to build a house, build apartments. He
had these enthusiasms for his projects and his future-his present. It was
not as if you had to deny yourself in the present for the future. The focus
was on how interesting things are today, how much fun to see them
built. It was so much fun being in the moment. That's what he always
communicated."

I liked the independence of a capitalist. And I always had sort
of a gambling personality. I liked figuring things out and
making bets. So I simply did what came naturally.'

Charlie Munger

MET CHARLIE IN 1955," said the second Nancy Munger. "We were
married in January 1956. We've been married 43 years."

That simple statement covers a life that has been anything but simple. When Nancy Barry Borthwick and Charlie wed, it was as if he'd
walked from a dark place into a bright field of new possibilities. The
second Nancy had traits that either filled in gaps or compensated for
Charlie's shortcomings.

"He's not a very good manager," conceded his daughter Molly. "He's
the utter absent-minded professor. He buys on impulse. If he had expensive tastes, he'd be in real trouble. Along comes Nancy. She's calm, stable,
hard-working, incredibly frugal, interested in the nuts and bolts of making it work. She manages it. She's the CFO, the Robert Duval character.
She's putting it together. He has charismatic abilities. She adores him. She
just thinks he's the cutest thing."