Charlie Munger's Final Years: Boldly Investing at 99, Supporting Young Neighbors in Building a Real Estate Empire

Written by: Ye Zhen

Source: Wall Street Journal

The final chapter of Charlie Munger's life was not a quiet retirement by the seaside, but rather a vibrant time filled with contrarian investments and new challenges. This investment giant continued to actively make investment decisions, forge new friendships, and calmly face health challenges until the very end of his life.

According to a recent feature article published by The Wall Street Journal, in his later years, Munger gave up his ocean-view mansion in Montecito, California, and chose to stay in his old Los Angeles home, which doesn't even have air conditioning, simply because it was closer to the people he admires and the projects that excite him.

In the last year of his life, Munger made a bold bet against the trend on an industry he had avoided for 60 years—the coal industry—yielding over $50 million in paper gains. In his later years, he also collaborated with a young neighbor, becoming deeply involved in real estate investment and building an apartment empire valued at around $3 billion.

Meanwhile, this legendary vice chairman of Berkshire Hathaway is also facing health issues such as declining vision, but he copes with a calm and humorous attitude, combating the loneliness that comes with aging through regular breakfast meetings and gatherings with friends.

The report pieced together a little-known picture of Munger through the memories of his family and friends, revealing that in the final moments of his life, his mind was still operating at high speed, maintaining a keen business sense and a passion for learning.

Betting against the trend on coal stocks yields hefty returns

For an investor who has avoided the coal industry for 60 years, Munger's actions in 2023 surprised the market.

According to The Wall Street Journal, many investors were bearish on the coal industry due to the long-term decline in coal usage, but Munger saw a different logic. He believes that as global energy demand increases, coal will still be necessary, and many producers remain profitable while their stock prices are quite cheap.

“He read an article saying the coal industry was doomed,” recalled his stepson Hal Borthwick, “and he said, 'Nonsense.'”

In May 2023, Munger bought shares of coal producer Consol Energy and later in the same year acquired stakes in metallurgical coal producer Alpha Metallurgical Resources. By the time of his death, Consol's stock price had doubled, and Alpha's stock price had also risen significantly, bringing him over $50 million in paper gains from these two investments.

A Cross-Generational Friendship and the Real Estate Empire

Another extraordinary investment by Munger in his later years began with a friendship across generations.

In 2005, 17-year-old neighbor Avi Mayer knocked on Munger's door. At that time, Mayer was struggling academically and feeling lost about the future. Munger became his listener and mentor, encouraging him to forgo college and enter “Munger University”—learning through observation and practice.

A few years later, when Mayer collaborated with childhood friend Reuven Gradon to venture into real estate, Munger, after observing their early operations, decided to support their company Afton Properties. Starting around 2017, the three collaborated to acquire nearly 10,000 low-rise apartments in Southern California. Munger was deeply involved in all aspects of the business, from site selection and building assessments to paint colors, even personally deciding to spend hundreds of thousands of dollars to plant new trees to improve the landscaping.

At Munger's suggestion, the company opted for long-term loans to lock in favorable interest rates and hold assets for the long term.

This strategy has proven effective. The Wall Street Journal cites informed sources as stating that Afton Properties currently holds assets valued at approximately $3 billion. Until the very end of his life, Munger remained involved in decision-making, and a property acquisition deal located across from a Costco store was only finalized a few days after his passing.

Face aging with composure and humor.

In the last ten years of his life, Munger began to face health challenges.

An article in The Wall Street Journal stated that a surgical error during a cataract operation in 1978 led to his left eye becoming blind, and around 2014, he also experienced problems with the optic nerve in his right eye, which at one point posed the possibility of complete blindness. According to his friend Li Lu, Munger took it calmly and even prepared to learn Braille. Fortunately, his right eye's vision gradually improved later.

As his mobility became increasingly limited, he gave up hobbies like golf and needed to rely on a cane to walk. But he always fought the troubles of aging with humor. He would joke that his secret to longevity was Diet Coke, and once lamented to a visitor, “Oh, if only I could go back to being 86 years old.” In terms of diet, his family eventually gave up trying to keep him on a healthy diet, and he enjoyed takeout foods like Costco hot dogs, In-N-Out burgers, and Korean fried chicken.

Munger is worried about loneliness and becoming insignificant, so he chooses to enrich his life with closer social interactions. Every Tuesday, he has breakfast with a group of business people at the Los Angeles Country Club, sharing investment wisdom and life philosophy. He once told his friends, “At my age, you either make new friends or you have no friends at all.”

The Last Farewell to Buffett

Although Munger's daily involvement with Berkshire Hathaway has decreased in the last decade of his life, his friendship and collaborative relationship with Buffett has remained constant.

The two have a phone call once a week or every two weeks. Due to Munger living in Los Angeles and Buffett in Omaha, and both having hearing issues, communication has become more challenging.

According to Munger's granddaughter-in-law Whitney Jackson, “They would yell loudly into the phone. The conversation might have been supposed to be confidential, but anyone within a mile could hear it.”

According to the Wall Street Journal, a few days before his passing, Munger was taken to a hospital near Montecito. He asked his family to leave the room so that he could make one last call to Buffett, and the two legendary partners said their final goodbye.