B000U5KFIC EBOK (50 page)

Williams rented land along the St. Johns River, not far from the original boat yard. He leased several truck tractor trailers to be used as offices.
Because of the pollution created by the boat's materials, Munger and
Williams were forced to build a hangar. "We made our own shipyard,"
Williams said.

As for the boat itself, "Charlie designed it, pretty much," said Williams.
"Every week he'd send two to three drawings. I built it for him-with help
from a marine engineer and 46 other guys."

Munger scrawled his notes, using a ruler and a black marker because
they were easier for him to see. He drew a scale model of the main dining room, complete with tables and chairs, carefully measuring the exact
space needed for comfortable seating. Williams saved all of Munger's instructions and deposited them among the ship's papers. "I cherish those
drawings," he said.

Munger often called Williams on the telephone and the minute he
had said what he needed to say, Munger would abruptly hang up. It has
never been his habit to indulge in small talk. Williams learned not to be
surprised or to take offense.

Charlie went to Florida at one point to see how the boat was progressing. He took a barrel, placed it in the upstairs room, and after sitting
there for awhile looking out, insisted the windows were too high.
Williams had installed relatively small windows for safety at sea. But he
removed the windows and put in expansive windows that would allow
people to sit in easy chairs or at tables in the main lounge and still take in
a view of the water.

Because local workers were unfamiliar with the high-tech materials
and equipment being utilized, Williams trained them himself. He arranged
for manufacturer's representatives to cone to the yard and show the workers how to do things properly. Green Cove Springs is a rural area, and
many of the workers had never held a job before that paid good wages and
included employee benefits. Williams (with Munger's money) arranged
for unemployment, health, and workers' compensation insurance. "They
all became very loyal," said Williams.

The boat construction stretched out for three years. In that time
King and Rachel Williams became well-acquainted with the workers and
their families, and realized how important the job was to them. When the
boat was finished, Rachel, who ran the office, called the large boat
builders in the region in an attempt to find employment for the construction crew.

When she called, "They'd say, well, 'send a resume.' I'd say, 'why
don't you come out and see what these people can do.' We used the Channel Cat as a demo to get all of the workers jobs before we left."

Undeterred by the Titanic jinx, Williams claims the boat, which has a
range of 1,500 miles, is unsinkable. The hull is composed of cells and if a
puncture occurs one place, the water will not spill into other cells. The
Channel Cat has motorized sails, a global positioning system, autopilot,
radar, and a weather fax. The boat has a customized computer system
with compact disks containing the marine charts of all the seas and harbors in the world.

In addition to the upstairs salon, below there are two state rooms, a
crew bunk room and a library/lounge. The boat can carry 149 passengers
and six crew. Because it was built to sea-going standards, the Channel Cat is licensed to ply waters with paying passengers from Alaska to Cabo San
Lucas, at the tip of Baja California.

The boat has two 350 horsepower Cummins diesel engines, plus two
generators to provide electricity. The desalination system produces 500
gallons of water per day, plenty for the crew and guests to take regular
showers. There is a four-keg beer cooler in the bar, plus a 35-case cooler
and an ice maker capable of producing 200 pounds per day . The boat carries a state-of-the-art audiovisual system and can pick up satellite television and telephone anywhere on the globe.

The interior is fitted out with pale bird's-eye maple, leather furniture, and a soft green carpet from an imported material that allows even
motor oil to be wiped up with a paper towel.

The etched windows at the entrance can be fiber-optically lit and
gently, continually change colors. At a cost of $55,000, a Florida glass
artist created a story etched in the decorative glass specifically for the
Channel Cat with it theme of Santa Barbara coastal life. The entry door
windows depict a kelp bed, then the partition in the foyer displays various sea creatures that might be found in the kelp bed, and the story in
glass progresses throughout the boat to the downstairs bathrooms. There,
a mermaid wearing a seashell bra, adorns the ladies' room door and Neptune, with a great flowing beard, designates the men's room.

"I've never in my life spent money foolishly like that. I said what the
hell. It was a creative thing to do," Munger insisted. Although Munger
will not say how much the boat cost, it is estimated by one expert that
total expenditures must have run at around $6 million.

After the three years of construction, it took another year to deliver
the boat and put it into service. The Williams, along with two other crew
members, sailed the Channel Cat 7,000 miles to bring it home to Santa Barbara. They started the journey during the 1999 hurricane season, which
turned out to be one of the most severe seasons in recent Caribbean history. Hurricane Mitch New through the area and the crew was forced to
take emergency refuge in Havana, where they waited for 25 days at the
Marina Hemingway for Mitch and other foul weather to pass. When
weather permitted they sailed through the Panama Canal and started up
the west coast of Central America, Mexico, and on to California.

Because of its size and passenger load, the boat must have two officers. King and his brother Rex, who once ran a charter boat service out of
St. Thomas in the Virgin Islands, serve in those roles. Rachel and Rex's
wife Michelle are the deck officers.

Charlie once claimed he would never spend a night on the boat, but
when the Williams were bringing it around, he and Nancy flew to Cabo San Lucas to meet the Channel Cat. They spent three days in Baja California where they went whale watching and fishing.

"Charlie wanted a dual purpose boat," said Williams. Designed as a
day-sailing party boat, Munger hopes that half the time the Channel Cat
will be rented out for corporate board meetings and the like. The other
half of the time it will be donated to organizations for fund raising events.
Munger envisions whale watching tours, lobster fishing parties, and
cruises through the Channel Islands, location of the evocative book and
movie, Island of the Blue Dolphins. King and Rachel hope to conduct 50
charter events each year and 50 charity events each year.

Partly because local tour boat owners objected, and partly because of
its large size, the boat has not been granted its own license to operate out
of Santa Barbara. It has, however, been used for its intended purpose in
other ports and sometimes sails under a sublicense out of Santa Barbara.
The Williams staged a Buffett Group party in Monterey, California,
attended by Buffett, Bill Gates, plus other well-known members of the corporate elite. A seven-course banquet for 65 people was served on the
boat. The dinner was catered from land, though the boat has a full-service
galley including double convection ovens. Emilie Munger held her fortieth birthday party aboard the boat in Newport Beach, California, and her
friends flew in from all around the world for the event.

After the boat was finished, King Williams and Charlie were walking
through a parking lot at a boat marina when a car backed out of a parking
space and shot toward them. Williams yelled at the driver, who slammed
on the brakes just before hitting Charlie.

Munger said to Williams, "You probably saved my life."

Williams replied, "Charlie, I'd never let anything happen to you."

Charlie snapped back, "Then you're walking on my wrong side," referring to his blind left eye.

THAT MnNGER Bi i ur A $6 MILLION boat for the sheer fun of it seems remarkable, if not somewhat quirky, to his family and friends, even to King
Williams.

"Charlie is very practical," said Williams. "We were driving along
one day and Charlie said, 'I've got to show you this house I built.'"
Munger directed Williams to drive to the top of Hot Springs Road in
Montecito, where he pointed out a mansion with a sweeping view of the
Pacific, a lap pool, extensive gardens on so much land it took a golf cart to
get around. "I said, Charlie, your retirement home! Charlie replied, `Naw,
I'd never live in a place like that.''

"He is very distrustful of emotions." observed Molly Munger. "We
heard a lot of messages about how emotions can lead you to do dumb
things. I'm trying to think of a time he said, 'Go with your gut, feel the
vibes. Lose yourself in the moment.' That's not where he is."

Yet Molly says there always were signs that her father could be
frivolous. At the same time, that dry of a person wouldn't have that
spring in his step. After something is checked out and you can feel safe,
he gets very devoted to people," said Molly. "A good argument can be
made that he's a very emotional person-that it is an achievement that he
brought a large psyche under control. A unique mix of an (emotional)
personality under wraps."

When they were younger, Warren Buffett often told inquisitive shareholders that if anything happened to him, Charlie Munger would take the
helm at Berkshire Hathaway. As time passed and age crept up, Munger deflected questions of corporate succession in the standard midwestern
way, with humor. "They asked George Burns when he was 95, 'What does
your doctor say about you smoking these big, black cigars?' And he said,
'My doctor's dead.'"

But now that Buffett is around 70 and Munger is passing his mid-70s,
that reply doesn't work as well.

"In due course this corporation will have a change in management,"
said Munger. "There is not a way to fix that."

Both men say, however, that there is a successor (or possibly two,
one for operations and one for investments) who will be revealed at the
appropriate time. Furthermore, Berkshire Hathaway was built with a long
tenure of effortless management in mind. "The one place a death will
hurt is we're not likely to get as good an allocator of capital as Warren in
the next CEO, whoever that is. But it still will be one hell of a business.'ki

Munger said he and Buffett aren't "obsessing" about their successors
yet. "Fortunately, Warren plans to live almost indefinitely."

One shareholder asked, who is the next Charlie Munger? "There's not
much demand," declared a matter-of-fact Munger.

Unable to resist a ghoulish joke, Munger said that when he dies people will ask, "How much did he leave?" The answer will be, "He left it all."