B000U5KFIC EBOK (9 page)

For Munger, "The Buffett family store provided a very desirable introduction to business. It required hard, accurate work over long hours, which caused many of the young workers, including me (and later
Ernest's grandson Warren), to look for an easier career and to be cheerful
upon finding disadvantages therein."

Warren's Uncle Fred Buffett, who once was voted the most popular
man in Omaha, took over running the store in 1946 when Ernest died. As
late as the 1960s, Buffett's grocery still accepted phone-in orders and
made home deliveries. When Fred finally closed the business in 1969, it
had been operating for 100 years, run by three generations of Buffetts.
The building remains in the Dundee area surrounded by a cluster of
antique shops.

BY THE TIME CHARLIE MUNGER was nine years old, Franklin Roosevelt had
been elected president, the New Deal had been introduced, and Prohibition had been repealed. When Charlie was 14, Orson Welles terrified
the United States with his overly realistic radio broadcast "War of the
Worlds." Munger was 15 when Hitler's Nazi army invaded Poland. The
whole world was experiencing dramatic change that would carry Charlie
away from his home in Nebraska.

He's a poker player, likes to keep things to .himself. Even when
we were children, he'd say, "We'll see. We'll see," more than
any other comment. If you ask him a question he doesn't
want to answer, he just pretendshe doesn't .hear.

Molly Munger

WO OF TIIE MI]NGER GRANDCHILDREN, Charles Lowell and Nathaniel
(ages ranging from seven-ish to ten-ish), and a mob of kids from
neighboring cabins clamor up and down the stairs of the main Star Island
house to a third-floor loft, where they have set up a fort and have formed
a secret club.

On this sunny, languorous August day at the Munger compound on
Cass Lake, they play a game that children have played for centuries, making up elaborate rules, planning raids on imagined enemies, and seizing
territory. Their chatter has a recurring theme. One youngster bursts out,
"I've got an idea!" No sooner does the gang discuss and agree on the plan,
than young Nathaniel Munger pipes up, "I've got a better idea." Back to
the drawing board. Nathaniel always has a better idea.

To improve the fortification and deter intruders, the children pile a
chair and suitcases at the top of three flights of stairs. All is well until
Nathaniel decides to make a reconnaissance trip to the first floor. Suddenly, with an alarming clatter, the chair, the suitcases, and Nathaniel all
tumble down.

Charlie Munger Senior glances up from his book and listens to the
bawling Nathaniel and the thunder of feet as the other children run to
gawk and as adults rush to survey the damage. Miraculously, Nathaniel
has no broken bones, not even a bruise that anyone can locate. Once he is
the center of attention, Nathaniel's crying stops. The family reports to Grandad that no damage was done. Charlie continues to read. "I didn't
think so," he mutters. By the end of the day, Nathaniel is boasting to his
pals that he fell all the way down the stairs and didn't even get hurt.

THE 1940s BROL'(;HT TI 110`1011, AND CHANGE both to America and the Munger
household. Some of that change was to be expected because Al and
Toody's children were growing up. As rumblings of war were heard from
across the oceans, first Charlie, then Mary, and finally Carol left for college. In the middle of those natural transitions, a dreaded inevitability
occurred-the United States was dragged into World War II.

Charlie was 17 when he left, in 1941, to enroll in the University of
Michigan where he majored in mathematics-and never after, except for
visits, returned fo Omaha. Mary Munger chose Scripps College in
Pasadena, but Carol followed in her father's footsteps and went east to
Radcliffe, nominally the women's college at Harvard at the time.

At Ann Arbor the students, including Charlie and his roommate, Nebraskan John Angle, listened to Bing Crosby records, watched young
Bette Davis at the movies, and explored new academic vistas. Charlie was
introduced to physics. "To me, it was a total eye-opener," he said. Although Munger only took an introductory level class, it was the physicists
approach to problem solving that made a lifelong impression on him.

"The tradition of always looking for the answer in the most fundamental way available-that is a great tradition, and it saves a lot of time in
this world. And, of course, the problems are hard enough that you have to
learn to have what some people call assiduity. Well, I've always liked that
word-because to me it means that you sit down on your ass until you've
solved your problem."

Munger says that if he were running the world, anyone who qualified
to do so would be required to take physics, simply because it teaches a
person how to think.

"I am in no sense a working scientist or a working amateur scientist,"
Munger concedes, "hut I have a very deep appreciation of science and I
find the methods used are useful outside of science."

But he was not to have a long period of tranquil studies at the University of Michigan. Instead, the prospect of war was troubling the minds
of most Americans. The political temperature was rising in Europe, then,
early in Charlie's first year of college, on December 7, 1941, there came
the surprise attack on the U.S. Naval fleet at Pearl Harbor. The imperative
of World War II forced many young men out of college and into military
service, and Charlie was no exception. He stayed at the University of Michigan through the end of 1942, then, a few days after his nineteenth
birthday, joined up.

When Charlie enlisted, the war was well underway in Europe, Africa,
and the Pacific. Because he had been a member of the Reserve Officer
Training Corps (ROTC) in high school and college-a total of six yearsMunger was bored with marching. He decided against going into the infantry and to his everlasting good fortune joined the Army Air Corps.

Charlie's mother was frantic about the safety of her only son, although Carol Estabrook said Toody Munger tried to hide her fear. Surely
Al Munger suffered similar anxieties, but to compensate, he threw himself into the war effort at home. Consequently, World War II became an
exciting time for Charlie's father. He cultivated a huge victory garden,
recruiting a nephew to work in it with him. Then he found a partner, a
priest who was a professor at a local Jesuit college and who had some land
in the country. Together they raised pigs so that they could have bacon
and other pork cuts, which were scarce because so much meat was being
shipped overseas to feed the troops. About the time their pigs matured,
though, rationing ended and pork products again became available at reasonable prices.

"It was very expensive bacon," chuckled Charlie. "I think my father
did it mostly because he liked raising pigs."

When he first joined the military, Munger was an ordinary soldier,
and his training gave him time to think about his future. "As a private in
the Army in Utah in a tent, in the mud and snow-very unpleasant conditions-I remember talking to someone. I said I wanted a lot of children, a
house with lots of books, enough money to have freedom."

After Munger took the Army General Classification Test, he found out
that a score of 120 qualified a soldier to be commissioned as an officer.
Charlie did much better than that, scoring 149. He soon was promoted to
Second Lieutenant.'

He was first dispatched to the University of New Mexico in Albuquerque, and then to a distinguished private college of science and engineering, the California Institute of Technology in Pasadena, California, to
train as a meteorologist. In plainer language, he would be a weather forecaster. Charlie took one look around Pasadena and knew he liked his new
surroundings.

Pasadena was a graceful old town, full of Spanish colonial-style mansions and shaded by billowing purple jacarandas and fragrant eucalyptus
and pepper trees. It had been settled a hundred years earlier by Midwesterners who built impressive churches and cultural institutions like the
ones they enjoyed back home. Smog wasn't yet the problem it would become, and on most days, the San Gabriel Mountains seemed so close
that you could reach out and touch them. To the west stretched the energetic, exotic metropolis of Los Angeles.

"Southern California was quite different. It looked like a bigger, more
interesting place than Omaha, a city that I love," he said.

Munger's three roommates at Caltech also impressed him favorably.
One roommate, Henry Magnin, was the son of an influential Reform Jewish rabbi. The second was the son of a music professor famous for teaching prodigies, and another was from a family of well-known scientists and
inventors. "They were all Californians. Interesting guys with interesting
families," recalled Charlie.

Following his weatherman training, Munger was dispatched to
Alaska, which was cold and dark, but, according to his own account, not
particularly dangerous. Charlie noted that his experience contrasted
starkly with the dangers to which others were exposed. U.S. casualties in
World War II totaled 292,000 dead, 672,000 wounded, and 140,000 taken
prisoner or declared missing.

The war interrupted his education, but it did not have the deeply formative influence on him that it had on others, said Charlie. "I don't think
I knew well 15 people who died in World War II. It wasn't like a whole
generation of young men died, as the Europeans did in World War I or
Americans in the Civil War. I never got near military action. I was stationed in Nome. I couldn't have gotten farther from action."

Just as Munger had avoided the poverty and degradation of the Depression, he was spared from the battlefield by serving in a vital noncombat job. Nevertheless, his years in the military allowed him to refine
what later became an important skill-card playing.

"Playing poker in the Army and as a young lawyer honed my business
skills," said Charlie. "What you have to learn is to fold early when the
odds are against you, or if you have a big edge, back it heavily because you
don't get a big edge often. Opportunity comes, but it doesn't come often,
so seize it when it does come."

Munger's deployment to Caltech coincidentally overlapped with
his sister Mary's enrollment at nearby Scripps College. She introduced
Charlie to one of her classmates, a girl named Nancy Huggins, whose family owned a shoe store that catered to the well-heeled residents of
Pasadena. The whole nation was in the throes of wartime angst, and
young love, under the threat of long or even permanent separation, became highly romanticized. The combination of youth, war, and romance
led to predictable consequences.

"The first Nancy goes to Scripps College-is a lively, pretty girl, from
the lively, attractive Huggins clan," explained Molly. "Willful, indulged. She rooms with a much calmer, steadier, bookish girl from Omaha. She
has a brother who started [to college] in Michigan. He was sent to Caltech. And they utterly rushed into marriage-he was 21, she 19-no idea
of what they were doing, both people of high spirits. Young people in the
middle of a war. They made severe mistakes."