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  Nancy's reaction was not surprising considering her many duties, but it seemed out of character.

  "Mother is emotionally stable," said Barry Munger. "She does not suffer from much self-doubt, self-criticism. She's very loyal. Family is a sacrament."

  Charlie wasn't the sort of man who came home and helped with the laundry in the evenings, and Nancy didn't expect that of him.

  "I think my mother gave him an incredible amount of latitude to concentrate on his affairs and career," said Emilie Munger. "She did everything in the home. I expect my husband to help with the boys and go on family outings on the weekends."

  The view a Munger child has of Charlie's presence in the home varies somewhat, depending on whether a younger or an older child is asked. To the older children, Charlie seemed always to be working. The younger children came along when he was more firmly established, and to them lie seemed less busy.

  "I'm not trying to paint an idea of a desert, devoid of all interaction between father and son," said Hal Borthwick, "there were family trips, we would fish back in Minnesota, and things like that, but, he was a very, very, busy man in those years."

  Nevertheless, recalled one of the younger children, Barry, "He was always there. He was not the type of father who took off on ski trips or on business trips. He was always principally there, but he had an active business and social life, a lot of preoccupation."

  To Emilie Munger, third from the youngest, "My father seemed like a traditional father. Everyone's dad was going to the office, coming back to dinner. We all sat down together for dinner. I didn't have the feeling that he was gone a lot. He played golf on Saturday, was around Sunday morning. He wasn't that involved in day-to-day discipline, but was a strong figure, so you knew if you ever broke a cardinal rule you would be in trouble."

  Barry described his father as "high energy," out the door early in the morning and back in the door for dinner. He brought projects home and turned his attention to those after the evening meal. "He could go for a long time on nervous energy, on family flights, family trips. He would get on a 6:00 A.M. flight. My mother does not function early. She gets up early, but would rather not rush out the door."

  Charlie habitually did several things at once. He would sit in a chair in the evening and read a book, at the same time following and interjecting comments into the family conversation.

  "Both parents are stiff-upper-lip types. They are a team," said Barry. "You would never play one parent off another. You would never have had success. Their basic feelings about raising children, what they're allowed to do, not do, are similar. When we were young, a lot of attention was paid just to keep us from tearing up the car. He was strict, but not the Great Santini. You wouldn't lip off to him. They weren't the type of people you'd do that to. In the height of adolescence-I would mouth off, be sulky. I had the closest thing to a classic adolescence of the younger children. But I would say in terms of my peers, I was mild. I didn't run away from home. We weren't hell-raisers."

  Despite the constant trips to school conferences, dental appointments, and loads of luggage when they went anywhere, those early years bonded three families into one.

  "Mother treated Molly and Wendy as if they were her own," recalled Charles, Jr. "Father treated her boys as if they were his own. They forged a real family."

  "He doesn't say children and stepchildren, he simply says we have eight children," said Wendy Munger. "He doesn't differentiate. That's just typical. In his treatment of the grandchildren, there is no distinguishing. He doesn't care at all. It is unimportant to him."

  Even the soft-spoken David Borthwick, who bucked the family trend and became what Charlie calls "a coupon clipper," is deeply grounded in being a Munger. Molly lived fifteen or more miles away in the suburb of Pasadena with another set of parents, but she also felt part of her father's life.

  "He bought me this car when I was in high school," said Molly. "Here he was struggling away. But I was driving the Mustang car with the white landau top. I had a clothes allowance. He was always there for me. I felt completely taken care of. It wasn't just financial. That was nice, but if he hadn't had that, he would have had something else."

  Emilie Munger now has three small children of her own. She said motherhood has prompted her to wonder how her parents managed to raise eight successful children who share similar standards and who get along well together.

  "As parents, part of their success was in transmitting values, human morality, and ethical codes to their children," said Emilie. "It wasn't through organized religion. We went to Sunday school at the Episcopalian church. We learned the golden rule, the basic rules. But it almost evolved through their example. I think he teaches through telling stories about people who are admirable in his eyes and those who are not. He was not hovering over us and telling us what was right or wrong with our own behavior. The siblings truly enjoy one another's company. There is not a lot of the weird things that can happen between brothers and sisters, parent and child, partly because we're all pretty moral and honest."

  The Munger children often harken hack to the lessons they've learned from growing up around it father with definite ideas of right and wrong. Hal Borthwick said Charlie drummed in the notion that a person should always "Do the best that you can do. Never tell a lie. If you say you're going to do it, get it clone. Nobody gives a shit about an excuse. Leave for the meeting early. Don't be late, but if you are late, don't bother giving people excuses. Just apologize. They're due the apology, but they're not interested in an excuse. By the way, those are very useful rules, especially for people who have decided to go into service businesses. People are paying for your services with their own money. Return your calls quickly. The other thing is the five-second no. You've got to make your mind up. You don't leave people hanging."

  "He asked us to do something." recalled Emilie. "If we came hack and said we couldn't because (of this reason or that), he would send us hack out to solve the problem and keep our word. Fine tune your judgment."

  Nancy agreed that Charlie's limited involvement at home and her acceptance of that seems unusual, but it was typical of their generation. "He was not much of a helpmate around the house. I always say, he lives in a lovely hotel that others maintain. He's no potterer."

  Nancy worked hard, but the whole family knew Charlie also worked hard to keep up his end of the domestic bargain. He was in his midthirties, starting his financial life over again, and managing several careers at once. Nancy used to tell their friends that Charlie "was a young man in a hurry," in a hurry to live a full life, in a hurry to get rich.

  He often approached family life much like an executive would deal with a business situation, Nancy explained. "He was always ready to advise and assist the children, and the opportunity came along fairly often. When they grew older, however, we tried to limit advice to one or two important issues."

  Though Charlie was reticent about expressing his feelings verbally, Molly said it was clear that he has always felt deeply about his family. It's just that a show of feelings might be dangerous.

  "He probably feels that if he ever began, he would be overwhelmed by his emotions," said Molly. "But it's very much there. We all wish he would show it more up front. They both came from old-fashioned, repressive backgrounds. She's been very understanding and just worked along with what it is."

  In addition to her domesticity, Nancy was Charlie's intellectual equal, someone with whom he could discuss ideas, though it is common for Nancy and Charlie to carry on a conversation with both talking simultaneously.

  "On Nancy's seventieth birthday, there was a big party," said Warren Buffett. "I thought about it and decided to get her a Purple Heart." Buffett searched around in Omaha until he found an old soldier's medal in a pawn shop.

  IN THE MANGER'S HANCOCK PARK NEICIII3OIHIOOD, all the families seemed equally prosperous. Nobody made a big splash, said Charles, Jr., "Except Craig Hoffman's dad, who ran a candy company, which we toured." Charles, Jr. did not even know what
his father did for a living.

  "I never had a sense of his career. Dad woke up and left the house between 6:30 and 7:00 A.M., and would come home between 5:30 and 6:00 RM. Dinner was at 6:30. That was our routine. What he did was mysterious to all of its. One of his offices was in a blue building. He had a big desk. I didn't understand what was on it. I never showed a great deal of interest in what my parents did. I had no idea."

  ONE REASON THE: MANGER CHILDREN were unaware of the nature of their father's work was that he seldom talked about it. And when he did, it tended to confuse the youngsters because so much was going on at once.

  Early on, Charlie mostly just practiced law at Musick, Peeler & Garrett, using all the skills he could muster to get ahead. Chuck Huggins, president of See's Candy but no relation to the first Nancy's family. says he saw Charlie in action as an attorney, and found him to be a "go get 'em" type of lawyer.

  During an early case on which Charlie was the junior law partner, he knew the clients would be coming in to discuss strategy on a certain day. Charlie thought about the case and decided that there were only three reasonable ways to resolve the issue. He thought through each approach. The next day the clients arrived, and after some discussion, instructed the lawyers to proceed along one of the paths that Munger had anticipated. The senior law partner asked Charlie to go off and draft a letter accordingly. Charlie told the group that if they brought in a stenographer, he could do the letter then and there and save the clients the trouble of returning the next day. When Munger rattled off the letter in a matter of minutes, the clients were wowed. When they did business with the firm after that, they asked that Munger help represent them.

  Munger was especially fond of senior partner Joe Peeler, a native of Alabama who used colorful language and like Charlie's own father, was a great hunter and fisherman. From him Charlie learned a new word that he liked very much-"gumption."

  "No wonder I liked him," said Munger. "Also, like me, he tended to delegate any task completely or do it all himself, and I liked his total delegation mode."

  One of the firm's most interesting clients was Harvey Mudd, a wealthy engineer with worldwide mining interests who later financed one of the best science and engineering colleges in the country, Harvey Mudd College, part of a cluster of small colleges in Pomona, California. Though Munger did not have a lot of close contact with Mudd, he developed ties with Harvey's brother Seeley and one of Mudd's advisers, Luther Anderson.

  Charlie recalls that Mudd would tell his lawyers, "I don't want to know merely what the law is and what I can accomplish without violating the law. I welcome your help in doing rightly, all factors considered."

  Charlie made some mistakes as a young lawyer, including drafting legislation granting property tax exemption to university buildings under construction. The law passed as he wrote it, but Munger was embarrassed to realize that it covered the buildings, but failed to mention the land under the buildings. Another partner was able to get the situation corrected.

  Nevertheless, Munger moved ahead nicely. But he also sometimes found himself punished for his outspoken brashness and tendency to show off his brains. His friend Chuck Rickershauser told Charlie that when he first started out in the law, the correct path was explained to him by a senior partner. "You must always remember that your duty is to conduct yourself so that everyone appraises you no higher than the third smartest person in the room. The client must be made to appear smartest, with me the next smartest, and only after this should any wisdom seem to reside in you."

  The leading partner at Musick, Peeler was Roy Garrett, and though Munger admired Garrett's legal skills and his ability to attract important business to the firm, he and Garrett never became as close as Munger was to Peeler. Despite the fact that Garrett gave some of his personal legal work to Munger for handling, Charlie said that deep down, he knew Garrett didn't like him very well.

  "Roy Garrett was a dominant personality, and he and I naturally clashed," said Munger. "One day, fairly early in our relationship, he called me in and chewed me out for running up $20,000 of billable time, with no collection, on sonic small-looking account he had assigned to me. I replied, `Roy, you have no right to talk to me this way until the first time I fail you in billing and collection' and we left it at that. A couple of weeks later I collected $50,000. This sort of being right got mixed reactions from Roy."

  Charlie lived by principles he'd learned at his grandfather's kneefirst, the surest way of building a business is by concentrating on the work already on his desk, and second, by underspending his income and amassing a pile of cash that could be invested to build future wealth.

  "Munger learned a lot about business as an attorney," said Buffett. "He was involved in an International Harvester dealership, TwentiethCentury Fox. He was always seeing reality. He is unable to be around a problem without thinking about it."

  Even things that were merely near at hand received close scrutiny, including an excellent mining property in California's Mojave Desert. "I would like to own that boron mine-boron is an element, the mine is in an open pit in a safe country. It has low costs and big reserves," said Munger. "It would be a really nice mine to own, but it is already owned by someone who knows it's a very nice mine."

  Some of his clients, unfortunately, were not the types that Charlie would have liked them to be. He began to think more about his father's reaction when they discussed one of Al's clients, Omaha auto dealer Grant McFayden.

  "I once complained that he [Al Munger] should have more clients like Grant McFayden and fewer like a certain other man," Charlie said. "I can remember my father's mock horror when he explained how McFayden treated his customers right, his suppliers right, and his employees right. A lawyer's family would starve, my father said, if all his clients behaved like McFayden. It is a lesson I have never forgotten and it has helped my business career, even though I find, like other businessmen, that it is harder to starve the lawyers now than it used to be. The lesson helped me prefer McFayden types as clients and McFayden behavior as the right example for myself."'

  The problem with law, Munger felt, is that the people he most enjoyed working with didn't get in much legal trouble, and the people who needed him most sometimes were defective characters. On top of that, in the 1950s and 1960s, practicing law wasn't necessarily a road to wealth.

  Munger gradually accumulated money from his legal practice and began investing in securities and joining friends and clients in business endeavors, some of which proved to he graduate-level courses in the school of hard knocks. He'd done some legal work for a small transformer manufacturing company in Pasadena and got along well with the clients. Charlie hoped they would come back to him for more business. One morning, while driving past the company offices on his way in to work, Charlie decided that he was being too shy. He shouldn't wait for the clients to call him. He should make a personal visit to them. He did a Uturn in the middle of the street and went back. After chatting with the business owners for a while, he did get more work. Eventually, he took an ownership position in the business, borrowing some of the necessary funds. Munger's first formal partner was Ed Hoskins, who now is in his mid-90s and lives in a golfing community near a small mid-California city.

  "Ed Hoskins is a great guy. He had created Transformer Engineers. He reached a disagreement with his venture capitalists who wanted to replace him. We worked out a deal for him to buy them out, using large amounts of credit. It was an early leveraged buyout. It was a nonlegal solution to what looked like a legal problem."

  The company was a job shop, making highly specialized transformers that Hoskins designed for military rockets and the like. Because the Korean War was in progress, an enormous amount of military work was underway in Southern California. Despite the opportunities presented by the war, the business was plagued with problems. One of the key officers, a young man, died slowly of cancer and as he did so, was carried financially by his partners.

  It was obvious that the company would have to expand
rapidly to pay off the debt from the buyout. At the same time, however, competing companies spotted the wartime opportunities and also expanded rapidly. Soon there were too many producers. The business aspects of their lives became miserable, accounting for much of the financial pressure on Munger around the time of his divorce. The upside of the story was that Hoskins and Munger became good friends.

  "Ed worked 90 hours a week" recalled Charlie. "He designed every transformer in the early days. I can't tell you how close we were and what a wonderful man he proved to be. We had troubles that made his hair fall out. Terrible struggles. The worst trouble came from buying William Miller Instruments, Inc. That was not a good idea. It produced a complicated cathode ray recording oscillograph. That business took forever to get off the ground."

  Finally the product started to move, and Hoskins and Munger sold the company. It was none too soon. The cathode ray recording oscillograph rapidly was made obsolete by more sophisticated magnetic tape technology.

  "In the end all we had was the transformer business," said Charlie. "That was a bad business when the war was over. We were stretched financially. With the help of Harry Bottle, the controller, we finally righted it by firing all the customers who wouldn't let it make money and downsizing to a much smaller company. It was a lot of struggle, a lot of nerve pain. We damn near lost everything. We finally made it work out, but not fabulously. But we got a very respectable return on investment eventually."

  Munger went into the partnership with Hoskins in the 1950s and got out of it in 1960 and 1961. Munger got a good start on a business education during those years with Hoskins. For one thing, "I never went back to the high-tech mode. I tried it once and found it to have many problems. I was like Mark Twain's cat that, after a bad experience, never again sat on a hot stove or on a cold stove either."