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  "That's where we saw the most of him," said Wendy.

  The island is aptly named. Its shape resembles that of a star that has fallen from the sky and splattered to earth. The dense evergreen forest starts directly in back of the houses and the clear water of Cass Lake laps up just 40 feet from the front door of Munger's eastern shore cottages. Lake Windigo, a body of water completely contained within the island, is less than a 15-minute hike from any of the cottages.

  There are no roads on the island, and to get around, residents use a system of hiking trails dividing uncut woods. The only way to reach Star Island from the mainland is by private boat. Most of the island is now controlled by the U.S. Forest Service, but the longtime residents who own the several dozen cottages perched along the edges, feel it is theirs.

  Munger's grandparents discovered Star Island in 1932. Cass Lake was a two-day drive from their home in Lincoln, Nebraska, but to the Mungers, the trip into the Northern Minnesota wilderness was worth the effort. They came upon the snug resort community in their desperation to escape the stifling 90-degree heat, 90 percent humidity that settles over Nebraska in the summers. Home air conditioning was almost unknown, and any Midwesterner who could afford to do so fled to the cooler north.

  After the solitary hotel on the island burned, the only accommodations left were an American-plan lodge (which later was acquired by the U.S. Park Service and demolished) and a sprinkling of primitive cabins around the shoreline. At first, the Munger family rented one of the cabins. Charlie's grandparents were a stalwart couple. Federal Judge Thomas C. Munger and his wife believed that roughing it with no electricity, no toilets, no telephones, no nearby stores, was good for their family. It built character. Electricity didn't come to the island until 1951 and telephones weren't available until the 1980s.

  "I think I was 13 when the bathroom went in," recalled Wendy Munger. "Before that, we had outdoor toilets and a couple of sinks."

  The original Munger cabin was built around 1908. Charlie's father bought it in the 1940s from Dr. Tommy Thompson, a Lincoln orthopedist. Dr. Thompson's droll comments on life still hang on some walls.

  "My dad paid $5,600 for this house in 1946," explained Charlie. "My grandmother had just died and he inherited some money. Before that he didn't have anything extra."

  An avid outdoorsman, Al Munger was delighted to own his own lake house. But Charlie's mother Florence, always called Toody, had to muster up her courage to make the annual trip to Minnesota.

  "It was Dad's love. Father was a passionate fisherman, a duck hunter, loved dogs," recalled Charlie's sister, Carol Estabrook. As for Toody, "She was allergic. She was not an outdoor lady at all."

  Although the short boat ride from the mainland marina to the family dock was an ordeal for her, Toody Munger set the standard for all grandmothers.

  "Here was this woman who couldn't swim, and yet she came every summer to an island out of love for her children and grandchildren," recalled Wendy. Once she was safely on the island, Toody Munger's sense of humor returned.

  "At Cass Lake," said Charlie's childhood friend Willa Davis Seemann, "just before dinner we had to straighten things. `I want this cottage artistic by sunset,' Toody would say. She was clever and fun."

  Allergies and insecurity on water weren't Toody's only problems with the island. She was terrified of mice, and there were plenty of rodents to be found in a cabin in the woods that was unoccupied much of the year. The Mungers have never been able to get rid of the mice completely, even though the house has been remodeled several times. Even at home in Omaha, Toody Munger had to confront her aversion to rodents, thanks to her only son, Charlie.

  Charlie recalled that when he was a small boy, he and his mother would go out walking together. One day he saw a dead rat by the side of the road. "I'd already sensed her aversion to rodents, so I picked it up and said, `Mother, what's this?' and waved it in front of her. She turned and ran down the road and I ran after her, still holding the rat."

  "It was the only time she took out after me with a coat hanger," Charlie said.

  Later Charlie became enamored with raising hamsters in the basement. It was a popular hobby at the time, and Charlie began trading his pets with other hamster farmers, usually children like him. The Omaha Cavy Club met downtown in the county courthouse, and Charlie was always riding off to meetings on his bicycle.

  "The idea was getting a bigger buck, or a hamster with unusual coloration, or something like that," explained Munger. At one point he owned about 35 hamsters and when one of them died, he wanted to keep it in the refrigerator.

  Carol Munger Estabrook said that her brother sometimes forgot to feed the hamsters or would come home from school late. The little creatures "squeaked like crazy and could be heard all over the house. Finally they got to smelling so bad mother made Charlie get rid of them."

  Munger and his two sisters inherited the Minnesota cabin from their parents, but Charlie's sister Mary, who has since died, sold her share to buy her own island cabin down the beach. Now, Charlie, his wife Nancy, and his surviving sister Carol, each own one-third of the property.

  "We like the island life," observed Nancy Munger. "There are generations of people there. We're into the fifth and sixth generation of friends."

  John Ruckmick, a Star Island neighbor who lives most of the year in Evergreen, Colorado, has spent 72 summers on the island. His parents vacationed there in the late 1920s when his mother was pregnant with him, and John started coming to Star Island the very next year. Ruckmick figures he was between five and seven years old when he first met Charlie. The two boys played together when island families gathered for picnics. "He exhibited his character early," said Ruckmick, laughing at the memory. "He was assertive!"

  Returning to the island each year once he grew up was not easy for Charlie, especially after he moved to California in the mid-1940s and spent the next two decades raising a large family and trying to establish a financial foothold.

  "We started going to the island when I was around three or four," remembered Molly. "In the early days, sometimes we would fly to Omaha and then drive up to the island. Wendy flew with my mother because she was young enough to sit in my mother's lap. Once I went on a train with Teddy and Daddy. It took a long time. I had red sandals."

  When there was a little more cash, the family flew from California to Minneapolis then got to the lake the best way they could figure out. "We sure took some weird flights to save money," said Wendy. "We split up. The older kids went on a Greyhound bus. It was a dramatic sign that times had changed when we all started to fly from Minneapolis to Bemidji-a big shift."

  To Charles Munger, Jr., summers at the lake were a time when the family had their father's full attention. "Up here we went fishing. We were always making fires. The rest of the year we didn't see him much."

  Now, said Wendy, "we all try to be there together, usually seven of the eight children, or at least six of the eight. It is crucial to our wellbeing," "We all want to be there at the exact same week. We had to buy up property on the shore to make room."

  When the Munger clan gathers there in late July or in August, there can be nearly three dozen people living in the assortment of Munger cottages. Because it is difficult to store enough food for that many people in the small kitchens, the Munger children take turns boating across Cass Lake for daily shopping excursions. The food bill invariably runs more than $300 per day. The family takes delight in finding fresh lake fish or a reliable supply of locally-harvested wild rice, or in bringing home 100 ears of fresh corn, bought from a farm truck parked along the road.

  As nearby cottages came up for sale, Charlie bought them-starting with the house dubbed "Munger West." Later third and fourth cottages farther along the shore were acquired. In 1999, the Munger children communicated by telephone, fax, and e-mail to plan, build, and furnish a "great room," which allows family and friends to gather in one place for meals and games.

  The original main house, "Munger East," has doubled in s
ize since Charlie's father bought it. A guest house equipped for use by a disabled person later was built with ramps and other devices to accommodate Charlie's sister Mary, who in the late 1980s succumbed to Parkinson's disease. Eventually a boathouse with an apartment over the top was added, then a tennis court, and in 1999, a more substantial dock that Charlie designed himself.

  A sign over the front door of the main house reads "Anglers' Rest," a name taken from one of Charlie's favorite books by P.G. Wodehouse, demonstrating Charlie's devotion to both Wodehouse and fishing. Before the house was remodeled, the upstairs walls, more partitions than anything, didn't go all the way to the ceiling. Molly lay in bed at night hearing her father in his own bedroom chuckling as he read stories about Wodehouse's zany character, Bertie Wooster.

  The Mungers may be on vacation at Star Island, but they don't forget the companies that made all this comfort possible. Much of the furniture that wasn't originally in the cabins was purchased from a Berkshireowned furniture store in Omaha, The Nebraska Furniture Mart, and shipped to the lake. It was floated out to the island on a barge owned by Munger. Gillette toiletries are stocked in the bathrooms and the refrigerators are loaded with Coca-Cola, both companies in which Berkshire has substantial ownership.

  With the extra cottages came more docks and boats. There are now thirteen boats, including fishing dinghies, two Mark Twains, a Stingray, and a catamaran sailboat. The Star Island boats, said Molly Munger, are a constant source of vexation, since family members live thousands of miles away most of the year and the boats are untended and in "various stages of disrepair."

  The upkeep on the houses is especially daunting, since Charlie and Nancy also own homes in the Hancock Park district of Los Angeles, in Santa Barbara, Newport Beach (California), and in Hawaii. A local businesswoman, Ann Cramer, has for 25 years supervised the Munger property in Minnesota, taking a hand in overseeing what seems like never-ending construction and remodeling projects.

  For Charlie, the childhood memories are essential to who he is, but even without the memories, he might keep coming back for the fishing. By any measure, Munger is a fervent and determined angler.

  "Charlie would fish in a rain barrel," said King Williams, a friend of Munger's who is captain of a huge sailboat that Munger built and keeps in Santa Barbara.

  Cass Lake is one of a series of lakes that stretch north, and each lake has nooks and backwaters where, according to local lore, bass, muskie, and possibly walleye are most likely to bite. On the eightieth birthday of a Star Island neighbor, J.D. Ramsey of Des Moines, Iowa, Munger chided his friend about his fishing habits, which sound like Munger's own:

  "I have seen a lot of peculiar fishermen in my life who, like me, are willing to suffer to fish in promising water," Munger wrote in a tongue-in-cheek tribute to Ramsey. "But only J.D., wearing the hair-shirt that duty requires in his unflagging conception, sees the whole point of fishing as the welcome opportunity to carry small boats through swamps and otherwise suffer in reaching fishing that is selected partly for its difficult access and partly for the difficulty of encountering any fish. ,2

  Barry Munger explained that just as his father is a patient investor, he also is an extremely patient fisherman. "He tries to find the best technique day in and day out and will stick with that lure, or whatever, even if others on the boat are having better success with something else. At one time he was dedicated to a chartreuse jig, day in and day out. I guess it works, but if I'm out on a day when the fish aren't taking that, I will try every color in the tackle box."

  Charlie and his son Barry on Star Island.

  Munger's attitude about fishing is revealed in the story he once told when musing on the gullibility of many investors:

  This fishing tackle manufacturer I knew had all these flashy green and purple lures. I asked, "Do fish take these?" "Charlie," he said, "I don't sell these lures to fish."3

  DAVID BORTHWICK, MUNGER'S STEPSON, said it was at Star Island that he realized Buffett played an exceptional role in their lives. "In 1963 or 1964, Warren came up and stayed a few days in August. Normally father would have dispatched Hal [David's older brother] to pick someone up. Father went himself. That was a clue that this was an important guest."

  But it was Buffett's second visit to Star Island that has become legend among Buffett followers. It was the occasion on which Munger nearly drowned his business partner.

  "I went up with Rick Guerin," said Buffett. "His wife had died. He had a boy. We thought it would be a good idea if they got away."

  John P. "Rick" Guerin, Jr., was at the time chairman of the Los Angelesbased brokerage firm Mitchum, Jones and Templeton. He also served as chairman of the New America Fund, in which Munger was a major shareholder. Guerin is a street-smart, physical fitness buff who wears dark glasses, open-collared silk shirts, looks suspiciously like he works in the film industry, and in fact he now owns his own film company. The most unlikely member of the stolidly conventional Munger-Buffett circle, Guerin nevertheless, has been a longtime business associate.

  Guerin said his first wife Ann used to call Charlie and Warren and (Los Angeles attorney) Chuck Rickershauser his master group. Ann committed suicide in 1980. "It was obviously traumatic," said Guerin. "Warren and I were talking about it a few days later and about the effect of the death of a loved one on a child. Patrick was eight years old."

  Warren suggested to Rick that the three of them join Charlie and his family, who were on their annual pilgrimage to Cass Lake. Guerin was welcomed by Munger, who himself had suffered a tragic and untimely death in the family.

  "We hung out," recalled Guerin. "We played bridge."

  And naturally, Munger took his pals fishing.

  "Charlie insisted on driving the boat. I offered, but he insisted," said Guerin. There are several different versions of what happened next, but generally, the story goes this way:

  "It was a calm day. We were out a mile or so," said Buffett. "Rick and I were talking away."

  In an effort to reach a better casting position, Munger put the boat's motor in reverse.

  "Suddenly," said Guerin. "I looked down and I'm in the water. We were going backward and water was flowing over the gunnel."

  Guerin yelled at Charlie, who replied, "I'll take care of that." Charlie then put on full power, but still in reverse. The boat sank. Both Guerin and Buffett were underwater for a few moments before they popped up side by side. "Warren's eyes were as big as his glasses," said Guerin.

  The borrowed boat, explained Charlie, was not designed so as to keep the water from rushing in when the boat was going backward. Buffett is athletic, but he is not a highly skilled swimmer.

  "I had to help Warren. The story has been a little stretched," admitted Guerin. "We know Warren was going to live with or without me. I've often said since, if he were in real trouble, I'd have made a deal before I helped him get a life preserver. I'd have been chairman of Berkshire Hathaway! "

  That mishap, concluded Guerin, is why Charlie's friends sometimes call him Admiral Munger. Despite the misadventure, Guerin says that the time he spent at Cass Lake that summer was an invaluable first step in his recovery from grief. He says it showed him that Munger and Buffett were more than just business associates.

  "Warren gave me the greatest gift he could possibly give: Three days of his time. And Charlie gave that, too. We try to be realistic and smart and logical all the time, but there is another side to it."

  The way Buffett reacted to the boating accident was typical of the business relationship between him and Munger. "Even when I took him fishing in Minnesota and upset the boat and we had to swim to shore, he didn't scream at me," said Munger.4

  One of Munger's children noted, however, that the ill-fated fishing trip was the last time Buffett ever joined the family at Cass Lake.

  Munger said there was another reason Buffett never returned: "After dunking him in the lake, we tried to cheer him up by making him watch a bunch of high school students perform Moliere in a Bemidji tent
." Moliere, even if delivered professionally, is not Buffett's style.

  C H A P T E R T H R E E

  THE NEBRASKANS

  An increased percentage of people come from Nebraska. Some people say they are from Nebraska when they aren't, for status reasons.

  Warren Buffett, 1997 Berkshire Hathaway annual meeting

  UNDREDS OF THOUSAND OF PIONEERS, heading west to the Oregon -and Mormon Trails, passed through Nebraska in the nineteenth century. Omaha was a gateway to the vast, rich lands beyond the Missouri River, and the ruts left by the wagon trains are visible in Nebraska farm fields more than 150 years later. Omaha was so rough and primitive back then that one of Charlie Munger's grandmothers for a while refused to live there; it was too far from the sophistication of her native Iowa.

  "Mother's parents moved to a job in Omaha, "said Carol Munger Estabrook, "but our grandmother insisted on living in Council Bluffs, Iowa. It's now full of casinos and strip joints. But back then, Nebraska was considered more of a frontier than Iowa."

  Omaha has improved, but living in Nebraska still is a characterbuilding experience. Temperatures can hit more than 100 degrees Fahrenheit in the summer and plummet to 40 below zero in the winter. Two big rivers, the Platte and the Missouri merge in Omaha, and melting snows can produce early spring floods.

  There are many Nebraskans of notable character, including the creator of modern rodeo, Buffalo Bill Cody; novelist Willa Cather; former U.S. President Gerald B. Ford; entertainers Henry Fonda, Johnny Carson, Marlon Brando, Nick Nolte, and Fred Astaire; and civil rights activist Malcolm X.'

  Munger says he owes a lot to Omaha, the community in which he was raised. He paraphrases an old saying, "they can take the boy out of Omaha but not Omaha out of the boy."