In May 2019, as Wells Fargo tried to move on from
Munger, the longtime business partner of Warren Buffett who helped grow Berkshire Hathaway into one of the most successful companies in the world, told Berkshire Hathaway shareholders that he wished Tim Sloan, who had
"We're talking about honest errors in judgment and I don't think Tim Sloan even committed honest errors of his judgment," Munger said during Berkshire Hathaway's annual meeting in Omaha, Nebraska. "I just think he was an accidental casualty that didn't deserve the trouble."
"I wish that Tim Sloan was still there," he added.
Munger, an attorney who left his law practice in 1965 to join Buffett in building Berkshire Hathaway, died Tuesday in Santa Barbara, California at age 99, five weeks before his 100th birthday. The vice chairman of Berkshire Hathaway since 1978, Munger was known for his blunt, sometimes unpopular comments and his steadfast loyalty to certain companies, such as Wells Fargo.
Berkshire Hathaway, which began investing in the bank in 1989, owned nearly 350 million shares of Wells at the end of 2019. It drew controversy for its decision to hang onto shares long after Wells' fake-accounts scandal surfaced in 2016.
Munger was always willing to defend Berkshire's investment in Wells Fargo, even as
"If I had to say which bank is more likely to behave the best in the future, it might be Wells Fargo out of all of them," Munger said during Berkshire's 2018 annual meeting.
Munger recently summed up his thoughts about bank investments during
While Berkshire Hathaway "has made some bank investments that worked out very well for us," it has also "had some disappointment in banks, too," Munger told the Financial Times.
"It's not that damned easy to run a bank intelligently," he said. "There are a lot of temptations to do the wrong thing."
In the same article, he warned of trouble ahead for the U.S. commercial property market, saying U.S. banks had a lot of "bad loans" due to falling commercial property prices. He said there's "a lot of agony out there" related to office buildings, shopping centers and other real estate, and said banks have been retreating from lending to commercial developers.
"Every bank in the country is way tighter on real estate loans today than they were six months ago," Munger told the Financial Times. "They all seem [to be] too much trouble."
Berkshire Hathaway, and Munger by association, have a long history of investing in banks. As of Sept. 30, the holding company owned shares of four banks — Ally Financial, Bank of America, Capital One Financial and Citigroup — as well as two payment processors, American Express and Visa, and one investment bank, Jefferies Financial Group, according to a regulatory filing.
Bank of America and American Express are its top stock holdings, after Apple. Bank of America shares make up about 8.7% of its portfolio while American Express shares make up 7.1%.
Apple, by far its largest investment, makes up about 48.5% of the total portfolio.
One of Berkshire's most memorable investments came during the aftermath of the financial crisis. In 2011, the firm invested $5 billion in Bank of America, which served in part as a vote of confidence in the beleaguered banking sector.
In 2019, Berkshire Hathaway boosted its stake in Bank of America
Over the years, Munger expressed skepticism of an "utterly toxic" competitive greed in the banking industry, including at BofA, even as Berkshire maintained its ownership stake.
"The more it looks like investment banking, the less I like it as a citizen," Munger said during Berkshire's annual meeting in May. "I am deeply distrustful of situations in which everybody wants to get rich and envies everybody else."
Berkshire Hathaway drew attention in 2022 when it
Munger had plenty to say about banks at this year's annual meeting, when several shareholders asked questions about his and Buffett's opinions of the banking industry. Munger told them that he "kind of liked it better" when banks weren't involved in investment banking and that credit cards, "when they came in as the original bank cards, were a great contribution of civilization."
Over the years, Munger's short and measured comments served as a counterbalance to Buffett's sometimes long-winded and explanatory remarks.
For example, in 2019, as the duo recounted lessons learned from the Great Recession, Buffett asked Munger whether he believed banks would make big mistakes in the future. Munger responded with his characteristic catchphrase which also served as a convenient demur.
"I've got nothing to add to that," he said.
During the same annual meeting, after Buffett spoke about regulations capping the ownership stakes of banks that private investors are allowed to hold, Munger responded by saying that Berkshire would "cheerfully" invest more in banks "if we didn't have all these damn rules."
In 2016, Buffett asked Munger during Berkshire's annual meeting whether Munger could remember the last time the firm purchased securities of an investment bank following Berkshire's investment in Goldman Sachs in 2008.
"We fear the genre more than we love it," Munger responded.
Warren Buffett’s Berkshire Hathaway exited a bet on Synchrony Financial during the first quarter as the company continued to pare back its investments in financial firms.
He also held the steadfast belief that Berkshire's judgment of businesses as potential investments set the firm apart from the "bad examples" banks set leading up to the recession by hedging on unnecessary risks.
"A major part of the cause of the great financial crisis is that the banks were reporting a lot of income they weren't making," Munger said during the 2016 annual meeting.
"An idiot could make a lot of money by just making way gamier loans on high interest and accruing a lot of interest," he said.
Regardless of personal opinions, Munger understood his role as a counterbalance to Buffett.
In 2019, Buffett said it was "infuriating" that there were no jail sentences for bankers that egregiously contributed to the recession. In response, Munger struck a milder tone.
"I don't think people ought to go to jail for honest errors of judgment," he said. "I don't think any of those loan officers was deliberately malevolent in any way."
