Munger on real estate: Rare insights, comic relief

Billionaire investor, second in command to the Oracle of Omaha, and would-be dorm designer Charlie Munger passed away yesterday at the age of 99. 

Though Munger made his billions as an independent investor, serving for years as Warren Buffett’s right hand, he got his start in the real estate industry. 

After finishing law school at Harvard, Munger moved to California, where he became a real estate attorney, and soon got involved in development deals of his own. He did only five deals before getting out of the industry and heading to work with Buffett, but he left plenty of sage advice about real estate, investing, architecture, and business.

Check out a few of our favorite Munger quotes below. 

“A lot of real estate isn’t so good any more. … There’s a lot of agony out there.” –to the Financial Times in an April interview 

“There’s no real controversy. We just had a couple of nutcases that went off half-cocked.” –on critiques of his dorm design at UC Santa Barbara in a 2021 interview with The Real Deal 

“Lush landscaping. That’s what sells. You spend money on trees, and you get back triple.” –to Janet Lowe for his 2003 biography Damn Right! 

“Here’s an area in which we have a virtually perfect record extending over many decades: we’ve been demonstrably foolish in almost every operation having to do with real estate that we’ve ever touched.” –to Berkshire Hathaway shareholders in the 1998 annual meeting 

“I did a total of five projects, then stopped. I didn’t like constantly borrowing more money.” –from Damn Right! on why he got out of the real estate game 

“I regard architecture as the queen of the arts. Think of how much more good one nice building does for humanity than one damn painting.” –to The Real Deal in a 2021 interview

“I never had any flannel-mouthed baloney in the operation. I dealt with quality people.” –on picking the right partners for his deals, in Damn Right! 

“Forget what you know about buying fair businesses at wonderful prices; instead, buy wonderful businesses at fair prices.” –Munger quoted by Warren Buffett in his 2014 letter to Berkshire Hathaway shareholders

“I developed it because I didn’t want to let the zoning authorities rob me the way they wanted to. And now I know that if I had let them rob me, we would have had better financial results.” –on his pricey Santa Barbara development, in Damn Right! 

“What kind of idiot would make the men’s bathroom and the women’s bathroom the same size? The answer is, a normal architect!” –to the Wall Street Journal in 2019

“It’s remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.” –in Damn Right! 

“If you think psychology is badly taught in America, you should look at corporate finance. Modern portfolio theory? It’s demented!” –in Damn Right!