By: Russ Kamp, Managing Director, Ryan ALM, Inc.

Unfortunately, I never had the opportunity to meet or speak with Charlie Munger, but I would always welcome the opportunities to read what he has to say. His brilliance was in the simplicity of his message. I’ve seen a number of tributes to the man from those who had the gift of knowing him to those, like me, who simply admired his amazing career and his words of wisdom. 

In an industry where one complicated strategy after another is introduced, usually accompanied by larger and larger fee schedules, Charlie’s perspective and message was a breath of fresh air. You can find his quotes on a number of subjects. In our industry the pursuit of constant learning is so very critical. On the subject of learning, Charlie is quoted as saying, “Without the method of learning, you’re like a one-legged man in an ass-kicking contest. It’s just not going to work very well.” — 2021 Daily Journal Annual Meeting He’s also quoted as saying “In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time — none, zero. You’d be amazed at how much Warren reads — and at how much I read. My children laugh at me. They think I’m a book with a couple of legs sticking out.” — Poor Charlie’s Almanack

With regard to investing, he said, “One of the inane things [that gets] taught in modern university education is that a vast diversification is absolutely mandatory in investing in common stocks. That is an insane idea. It’s not that easy to have a vast plethora of good opportunities that are easily identified.” — 2023 Berkshire Hathaway Annual Meeting I couldn’t agree with the following quote, in which he said “Mimicking the herd invites regression to the mean (merely average performance).” — Poor Charlie’s Almanack I think that it would be quite beneficial for our pension industry to take Charlie’s thoughts seriously about diversification and the herd mentality exhibited with regard to asset allocation.

On the subject of technology, he commented that “We now have computer algorithms trading with other computers. And people buying stocks who know nothing, being advised by people who know even less. It’s an incredibly crazy situation … All this activity makes it easier for us.” — 2022 Berkshire Hathaway Annual Shareholders Meeting In addition, he stated that he’s “personally skeptical of some of the hype that has gone into artificial intelligence. I think old-fashioned intelligence works pretty well.” — 2023 Berkshire Hathaway Annual Meeting But he was also a staunch supporter of capitalism and opposed to breaking up big tech, saying “”I would not break them up. They’ve got their little niches. Microsoft maybe has a nice niche, but it doesn’t own the Earth. I like these high-tech companies. I think capitalism should expect to get a few big winners by accident.” — 2023 “Acquired” podcast

Again, I wish that I’d had the opportunity to meet the man who became a legend. In addition to Charlie, there have been a number of incredibly influential people in our business whom I’ve admired, but never had the chance to meet, including John Bogel, John Templeton, and Peter Lynch. Fortunately, I’ve had the great opportunity to work with a number of brilliant and critically important investors who don’t carry the same cache as Charlie or the others that I referenced. 

Currently, I have the great fortune of working with a fixed income legend in Ron Ryan. Recognized for his work with indexes (Bill Sharp Lifetime Award winner) and Asset/Liability Management, Ron (and Ryan ALM, Inc) is more than a provider of product. His personal mission is to protect and preserve defined benefit plans for the masses. He, too, follows the KISS philosophy. If pension plans exist to meet a promise that has been given to a participant, shouldn’t that promise be the focus of our effort? Seems obvious, right? However, in a world where over diversification (“deworsification” according to Munger) and the herd exist in spades, the management of pension assets focused on the “goal” has morphed into a return objective – tragic! 

Thank you, Charlie, for the wisdom you shared over more than six decades. Thank you, Ron, for showing me how we can make a true difference for the millions of American workers who are counting on (hoping) the promise that was given to them when they began working by focusing on the true pension objective of SECURING the promised benefits at a reasonable cost and with prudent risk.