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  His friend Rick Guerin described the 29-year-old Charlie's grief: "He said when his son was in the bed and slowly dying, he'd go in and hold him for a while, then go out walking the streets of Pasadena crying."

  But Munger tried to live a normal life. After the divorce, a law partner introduced him to a young divorcee, Nancy Barry Borthwick. She also had two young children, and Charlie and the second Nancy began taking their youngsters on outings together. At first the entourage included Teddy.

  "I knew he was very sick, and I knew lie was dying," recalls Hal Borthwick. Hal was about Teddy's age, and met the boy when Charlie and Nancy took the children to a private beach club on the Pacific Coast Highway. The club was affectionately called The Filthy Fifties, so named by a rival club because of the number of members. The second Nancy's family had been members for years.

  "I do remember being down there one day with Teddy, and it was fairly near the end," recalled Hal. "I asked if he wanted to go play and he said, `No, I really can't. I'm just too tired.' He was-you know ... you could tell ... What nine-year-old boy doesn't want to play at the beach? He was just too tired."

  In 1955, one year after the diagnosis, Teddy Munger died. "I can't imagine any experience in life worse than losing a child inch by inch," said Munger. "By the time he died my weight was down 10 to 15 pounds from normal."

  Hal Borthwick said that for the other children the end had a surreal feeling to it. "I don't have any recollection of going to the funeral or anything like that. I don't even know if Molly and Wendy went to it. In fact, I don't even know if there was a funeral. Teddy just sort of disappeared." There was a small religious service for Teddy but because Nancy and her sons weren't family yet, they did not attend.

  Though the adults knew what was coming, Teddy's death also shocked his younger sisters. "We didn't know at all he was going to die," said Wendy. After he did. "We each kind of held our breath when we got to nine years old and released it when we got to ten. It was a silly kid thing to do, but I didn't like it when my kids were nine either."

  With Charlie living at his club and Teddy gone, the once cozy threebedroom, two-bath house Munger had built on Edgewood Drive in South Pasadena became a lonely place situated on a quiet street surrounded by gracious homes and majestic trees, it is only a block from Wendy's present home. Even after so many years, it looks like a sad little house to Molly and Wendy when they drive by.

  "Molly and I lived in that house until 1957, then mother remarried," said Wendy Munger.

  Charlie's first wife married radiologist Robert Freeman, one of the doctors who tended to Teddy Munger during his illness. Molly and Wendy felt that their mother's remarriage definitely improved their lives. They moved from the modest Edgewood Drive house to a much grander home on Madeline Street. Next door was the Westridge School for Girls, where Molly and Wendy soon enrolled. Now, they lived in a "big house, with an attic, basement, many rooms. It was a wonderful thing for a nine-yearold," said Molly. "Daddy had married, was producing babies. Our stepbrother Hal was a very special person. Just a hoot. I knew he had great relative potential. He was just my age, reactive, an idea a-minute type kid. My stepfather was more grandfatherly. He had his own children who were older than we were and a building medical practice. He doted on us. Daddy would cone and get me. I very shortly thought it was a happy outcome to a had situation. It was fine."

  Dr. Freeman, the son of a local Presbyterian minister, played the accordion each week at the Kiwanis Club and served on the local school board.' Life began to brighten all around. Wendy Munger does not remember the transition from one family structure to the next, but she soon became aware of the advantages.

  "I always said I had the best of both worlds," said Wendy. "I immediately got two stepparents that I liked and lots and lots of new relatives. It was a smooth thing for me. Both my mom and my dad spoke highly of one another. I just loved it, being part of a big family."

  AT AGE 76, CHARLIE MUNGER LOOKS back on those years and notes that time takes some of the pain out of losing a child. If it didn't, he says, he doesn't know how the human race could continue. Munger believes that by coping as best he could with the tragedy of Teddy's death, he was doing the only rational thing. "You should never, when facing some unbelievable tragedy, let one tragedy increase to two or three through your failure of will." As for the end of his marriage, the years have given Munger a mature perspective on that as well:

  I don't spend much time regretting the past, once I've taken my lesson from it. I don't dwell on it. Certainly I had more sense when I was 32 than I did when I was 22. But I don't have any feeling of terrible regret. We ended up with nice children. I think my ex-wife has been reasonably happy in a different situation.

  Years later, Munger compared the marriage process to the investment process, though perhaps he wasn't speaking specifically of his own experience. "Life is a whole series of opportunity costs," said Charlie. "You've got to marry the best person who is convenient to find that will have you. An investment is much the same sort of process."

  That pragmatic statement masks his devotion to his second wife, Nancy, and certainly throws up a shield around the trouble and sorrow Munger experienced before he finally settled into a happy situation. The second Nancy insists Charlie is very affectionate, but said he is a little "uptight" about showing his feelings. Charles Munger, Jr., Nancy and Charlie's first son, suggested that his father's strength, his ability to resolutely move on from the past, also is his Achilles heel.

  "His son died, his marriage ended, he lost a lot of money," said Charles, Jr. "He just walks away from that (emotionally). Dad says to himself, that doesn't work. Don't revisit it. There are some things my dad could deal with better if he faced them more. My dad, if he had a bad experience in a town, in a restaurant, he would not go back. I'd try again."

  And yet Munger did try marriage again, and in this second union, said Charles. "Both Mom and Dad found what they lacked in their first marriages."

  CHARLIE'S DREAM OF A LARGE FAMILY was about to be realized, and Munger was determined that the children would be raised and educated well. He knew that if he was to earn sufficient income, he would have to apply all his talents to the task. He already was a hard-charging lawyer, and gradually his need for additional income drew him into the business world.

  "He was always interested in money," recalled Molly. "He was always good at money. He invested in the stock market. He talked about business in a way that was animated and interesting though now I see he was almost broke. I knew he drove an awful car. But I never thought he was anything but a big success. Why did I think that? He just had this air-everything he did was going to be first class, going to be great. He was going to put in a patio on Edgewood Drive. He was going to get a boat for the island. He was going to build a house, build apartments. He had these enthusiasms for his projects and his future-his present. It was not as if you had to deny yourself in the present for the future. The focus was on how interesting things are today, how much fun to see them built. It was so much fun being in the moment. That's what he always communicated."

  CHAPTER F I V E

  PUTTING TOGETHER

  A NEW LIFE

  I liked the independence of a capitalist. And I always had sort of a gambling personality. I liked figuring things out and making bets. So I simply did what came naturally.'

  Charlie Munger

  MET CHARLIE IN 1955," said the second Nancy Munger. "We were married in January 1956. We've been married 43 years."

  That simple statement covers a life that has been anything but simple. When Nancy Barry Borthwick and Charlie wed, it was as if he'd walked from a dark place into a bright field of new possibilities. The second Nancy had traits that either filled in gaps or compensated for Charlie's shortcomings.

  "He's not a very good manager," conceded his daughter Molly. "He's the utter absent-minded professor. He buys on impulse. If he had expensive tastes, he'd be in real trouble. Along comes Nancy. She's calm, stable, hard-working, in
credibly frugal, interested in the nuts and bolts of making it work. She manages it. She's the CFO, the Robert Duval character. She's putting it together. He has charismatic abilities. She adores him. She just thinks he's the cutest thing."

  Nancy was youthful, healthy, and had energy. A skilled athlete, she played tennis and kept skiing well past the age of 60, and despite recent hip replacement surgery, still plays golf.

  "She's a great self-investor," said Molly. "What you learn from Nancy is never give up on yourself. Just keep working on your stuff. She does very beautiful watercolor painting, which she began in her 50s. She cooks French food at a gourmet level."

  Charlie and his second wife Nancy at their wedding reception.

  NANCY HAD A CALIFORNIA-STYLE PEDIGREE not unlike the one Charlie brought with him from Omaha. Her father's family moved from Beaumont, Texas, to Los Angeles in 1902 and were real estate developers before the Great Depression diminished the family fortune. David Barry Jr., Nancy's father, was in the insurance business and was also involved in various real estate ventures. Among other things he was interested in botany and built greenhouses where he crossbred rare plants, particularly palms and bromeliads. Her mother, a native Californian, was a teacher.

  Nancy's parents met at the most characteristically Californian of all colleges, Stanford University in Palo Alto. Stanford was founded in 1918 by Leland Stanford, a railroad baron who dedicated the college to his son who succumbed to typhoid fever while still a teenager. When their son died Stanford told his wife that the children of California now would be their children, and soon afterward the couple established the West's most distinguished university.

  "I was born in Los Angeles at the hospital where Charlie is chairman of the board, Good Samaritan," said Nancy Munger. "I lived in Los Angeles, and went to public school until the tenth grade, then I attended Marlborough School."

  Nancy's mother was an only child but she henefitted from an extended family. The Wittenbrocks, her mother's grandparents, had settled in Sacramento around the time of the Gold Rush and prospered there.

  Her grandmother had an uncle and six aunts, noted Barry Munger. "Each was given a house when they got married on a single block in Sacramento. When she visited as a child, Mother could run around from one house to another. The aunts' houses are still there on J Street, close to the state capitol. The original Wittenbrock home is listed as a historic landmark."

  "The aunts," said Nancy, "were endlessly patient with checkers, tiddlywinks, and jackstraws. Each afternoon they chose someone's garden to gather in and gossip. They had fruit trees. They canned peaches and cherries."

  Like her parents before her, Nancy also went off to Stanford. Five of the eight Munger children followed suit, and if Wendy's daughter Anna is accepted in 2000, she will make the fourth generation of her family to attend Stanford.

  "I majored in economics," said Nancy. "I loved business law, but I didn't receive any encouragement to go to law school. Instead, I married and had a family shortly after graduating."

  Following graduation Nancy's husband continued at Stanford Law School. Nancy took a job at a scientific laboratory at Moffett Field in nearby Mountain View. She worked in a section where wind tunnel and other research work was conducted for early supersonic aircraft.

  "They asked me, would you rather be in the typing pool or use a calculator.' I said calculator. We used a Frieden machine, and I calculated the shapes of aircraft wings and fuselages," recalled Nancy.

  It was Nancy's plan to earn a master's degree in American history, but before she could complete her studies the couple returned to Los Angeles.

  NANCY BORTHWICK HAI) BEEN DIVORCED for it short time and was living with her two young sons in a house in a canyon above old Bel Air. She and Charlie met on a blind date.

  "Good friends lived up the street. They knew some friends of Charlie's, who said he'd like to meet someone, so they arranged for us to meet," said Nancy. The couple who did the introducing were Martha and Roy Tolles. Martha is it writer of children's stories and Roy was one of Charlie's law partners at Wright & Garrett." Friends say that after Charlie and Nancy had their first evening out, Tolles asked how it went. Charlie assured him that everything went very well, but then scolded Tolles for not telling Charlie the most important thing about Nancy-that she had been a Phi Beta Kappa student.

  "My mother and Charlie are both very bright, capable people and neither of them suffer fools particularly gladly or wants to waste time," explained Nancy's eldest son Hal Borthwick. "And I think that both having been married and both having relatively unfortunate divorces in terms of what was involved ... in terms of emotional intensities and what not ... I think they made a fairly quick decision as to whether the other person was worth a second look."

  It is clear the prospects struck them both as promising.

  "No one would write a novel this way. No one would ever name both wives Nancy," exclaimed Charles, Jr.

  Hal Borthwick was about seven years old when his mother remarried and Charlie moved into her house on Roscomare Road not far from the north side of the University of California, Los Angeles campus. "It was just me and my younger brother, David. Teddy had died before they were married and the girls lived with their mother in Pasadena."

  The Mungers were married and nine and a half to ten months later, Charles, Jr. was born. It became a his, hers, and ours establishmentCharlie's two girls from his previous marriage, Nancy's two boys and Charles, Jr. Roughly every three years after that a new baby arrived and together Charlie and Nancy had three sons and a daughter.

  "Apparently I was a happy baby, fat little boy, always laughing," said Charles, Jr. His parents have told him, "We needed a son like you just then."

  By the time Charles, Jr. came along, both families were settling into their new arrangements. The two older sisters had a fairly tame existence. Hal and David's father was no longer in the picture. He stuck around for a while after the divorce, but not long, said Hal. "He went back over to Honolulu where the family had a mortuary and other business interests and he was there for a while and then he moved to the Philippines and he was there for many years. He had various business interests, including some memorial parks and stuff like that."

  It was many years before Hal and David Borthwick's natural father returned to the United States, and by that time the young men were well assimilated into the Munger clan. For Hal, the integration started quickly but did not go smoothly.

  "I know that I had felt myself to be somewhat the man of the house, even as young as I was," said Hal. "Charlie would take Mother out for a date and I'd be up waiting for Mother when she came home, whether I was supposed to be in bed or not."

  Hal's feelings intensified once there was another man in the house. "My personality is one of wanting to acquire whatever amount of territory I can expand into," admitted Borthwick. "And so I had acquired territory that I was going to be deposed from and it happened. It was as simple as that. Behavioral issues-I used to pound on my younger brother a lot and Charlie made short work of all that. It isn't easy to go through a divorce, to lose your dad. I was old enough so I remember the things that kids can remember about divorces. Fighting and stuff like that. My brother David was too young, so he doesn't have the same experience set that I do. But I still had damage from that."

  Borthwick said his new stepfather was not afraid to spank, though Charlie had to be pushed before he would do so, and the spankings were not severe. Borthwick said lie was the type of child who needed discipline and benefitted from it. "My brother David on the other hand was not that kind of child. I'm not aware of any of the other children that got paddled as much as I did. I'm sure Charlie didn't particularly enjoy it, but at the end of the day it got the job done."

  The territorial issues took several years to resolve since Borthwick was a particularly pugnacious boy, and during that time, Hal felt angry.

  "I gave those concessions up grudgingly, but ultimately I came to accept Charlie as my father in every sense of th
e word other than biological," said Borthwick. "Because what I am today, you know, he has contributed to materially. The way I approach life, my value structure, and what I will and won't do."

  In the meantime, the brothers and sisters just kept arriving.

  "There are 20 years between the oldest and youngest," explained Charles, Jr. "Molly and Hal are together, David and Wendy. Now the age differences matter less. But most of the time the family was a fuzzy muddle."

  Carol Estabrook says that the commotion at home suited her brother perfectly. "I think he would have had 40 children. It was not from a lonely childhood. He was always gregarious, friendly. He had lots of friends."

  Perhaps it was the example of the big, relaxed family gatherings at his great grandfather's house in Iowa; maybe lie was inspired by the memory of the gang of children at Star Island in the summer.

  "I didn't see life as a breeder's derby," said Charlie. However, he added, "I'm very glad to have had children. I don't want to crow that they are superstars-hut we're pleased with them all."

  Regardless of his motivation for having them, the upbringing of eight children was a daunting financial task. The family went to Star Island in the summer partly because it was an inexpensive vacation for such a big crowd. The pressure on Nancy was tremendous, but she recognized the need to build both family and financial stability.

  "The early clays were the scraping by clays," noted Charles, Jr. "Trying to reestablish themselves after their lives had hit the rocks. She backs the plan, she was faced with a number of children for so long. Mother's mother or Marv Rhodes-Mom's childhood nurse-looked after us sometimes. My Grandfather Barry had built a house on Diamond Head Road in Honolulu, and our parents went there. At the end of a week's vacation, at the thought of going back, my mother burst into tears. The work at home was overwhelming."