Billionaire investing icons Warren Buffett and Charlie Munger have never had an argument in their six decades of business and friendship.
"We have never had an argument, really, in 62 years, and it's not that we agree on everything. We've, literally, in 62 years, we've never gotten mad at each other," Buffett said at Berkshire Hathaway’s (BRK-A, BRK-B) annual shareholders on Saturday.
Munger, who's held different opinions on investments such as Costco and Wells Fargo, said "luckily there's no conflict, and Warren I don't have to agree on every damn little thing we do. We've gotten along pretty well."
In the fourth quarter of 2020, Berkshire Hathaway cut its stake in Wells Fargo (WFC) by 58% in a sale of 74.95 million shares. Munger, who is also executive chair of the Daily Journal (DJCO), a legal software and publishing company, still owns the bank's stock on the Daily Journal's balance sheet. Munger is also on the board of Costco (COST), which Berkshire Hathaway exited in the third quarter of last year. At the Daily Journal's annual meeting in February, Munger praised Costco for having a "better reputation for providing value than practically anybody including Amazon."
Berkshire Hathaway's annual meeting took place in Munger's hometown of Los Angeles on Saturday, with Buffett reuniting with his long-time business partner Munger after a year apart.
In a normal year, thousands of people make the pilgrimage to Omaha, Nebraska, to listen to Buffett, 90, and Munger, 97, answer questions for hours as they sip Coca-Colas and nibble on peanut brittle from See's Candies. Last year, due to the coronavirus pandemic, the Berkshire Hathaway annual meeting went virtual, with Buffett answering questions from afar in an empty CHI Health Center Arena without Munger.
While Buffett is the more public and recognizable face for Berkshire Hathaway, the iconic conglomerate as it stands today was built to Munger’s blueprint of moving beyond so-called “cigar-butt” investing to “buying wonderful businesses at fair prices,” according to a shareholder letter commemorating the company’s 50th anniversary. Though Buffett credits Munger for his success, he also emphasizes that his friend and business partner has made him a “better person.
Munger, Berkshire Hathaway’s vice chairman, is admired for his expansive knowledge and his maxims about business, investing, and life as well as his colorful language and humor. Famously, he often says after Buffett finishes speaking, “I have nothing further to add.”
Munger grew up in the Dundee neighborhood of Omaha, a half a block from Buffett’s house, and attended the same high school as the investing legend. He even worked at Buffett’s grandfather’s grocery store as a teenager, though the pair wouldn’t meet until later, at the ages of 35 and 29, respectively. Lunch in 1959 at the Omaha Club, arranged by mutual friends, sparked an instant friendship and one of the most important business partnerships ever forged.
This year, Berkshire's other two vice-chairmen, Ajit Jain and Greg Abel, fielded shareholder questions. Jain and Abel, who joined Berkshire in 1986 and 1992, respectively, were added to Berkshire Hathaway’s board in January 2018, after the board voted to increase the number of directors from 12 to 14. At the time, Jain became the vice-chairman of insurance operations, while Abel stepped into the role of vice-chairman of the non-insurance business operations.
One of the shareholders pointed out that "one of the successful features of Berkshire is the strong bond between Mr. Buffett and Mr. Munger, who managed the company better, because they had each other." The shareholder proceeded to asks how Abel and Jain, who are viewed as "clear leaders of the next generation at Berkshire Hathaway" how they interact with each other.
"There's no question that the relationship Warren has with Charlie is unique. And it's not going to be duplicated, certainly, not by me and Greg, no. I can't think of very many other pairs that can duplicate it," Jain said.
Jain pointed out that he and Abel have known each other "for a very long time" and have a "perfectly well-functioning relationship."
"I certainly have a lot of respect, both at a professional level and a personal level, in terms of what Greg's abilities are. We do not interact with each other as often as Warren and Charlie do, but every quarter we will talk to each other about our respective businesses, and update each other on our respective businesses," the insurance executive added.
Abel noted that Buffett and Munger "have an exceptional relationship, but I'm very proud of their relationship Ajit and I've had."
"And as Ajit touched on, it's developed over many years, we've had the opportunity, or I've had the opportunity to see how Ajit's run the insurance business. And as Warren highlight, and Charlie highlights, there's no one better at it, so I've had the opportunity to observe that. And then equally, over the years, that relationship has just built and become greater and greater," Abel said.
Abel added that he "couldn't have more personal respect for Ajit both personally and professionally."
"And even though the interaction may be different than, say, how Warren and Charlie do it, as Ajit touched on, there is a regular dialogue, both around opportunities within our two businesses and units, both if we see something unusual that the other individual should hear, we make sure we're always following up with each other," Abel said.
Abel added that they both have "a great understanding of the Berkshire culture."
"And anytime we see anything unusual in one of our businesses, it's Ajit who I'm going to call and say, "'Are you comfortable that we're taking this approach? Is it going to be consistent with how you think about it? How you think about it in insurance?' So it goes beyond just discussing the businesses, but maintaining the exceptional culture we have at Berkshire and building upon that. So very fortunate to have Ajit as a colleague and immensely enjoy working with them every day," Abel said.
Julia La Roche is a correspondent for Yahoo Finance. Follow her on Twitter.
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