Charlie Munger passed away recently at 99 years of age. Munger is perhaps best known for his association with Warren Buffett but his influence over Buffett is underappreciated. Before meeting Munger, Buffett was a classic value investor.

Buffett practiced what was coined as cigar butt investing where he bought dirt cheap companies with ‘one puff’ left. He was able to profit off of these investments and earned enviable returns until the bull market of the 1960s started. As valuation levels steadily rose Buffett’s approach was no longer viable. He decided to give up and ended the Buffett Partnership telling his investors that he no longer understood what was happening with markets.

Buffett and Munger had been introduced at a dinner in Omaha in 1959. Munger was a lawyer who had graduated at the top of his Harvard Law School class but his attention slowly shifted to investing in shares and real estate. Soon Buffett and Munger were on the phone every day talking about investing. And Buffett credits Munger as the originator of the Berkshire Hathaway investment approach.

The new approach was no longer based on finding dirt cheap companies. Instead, Buffett and Munger focused on finding great businesses with sustainable competitive advantages and fair valuation levels. They would then aim to hold them forever.

There are five Munger quotes that stood out to us that reflected the wisdom and experience he gained over a lifetime of investing. Listen to the full episode below. Alternatively, read the full article here.