Charlie Munger's Concentrated Portfolio: A Two-Year Performance Review Since His Passing

The Philosophy Behind the Focus

Warren Buffett’s long-time partner at Berkshire Hathaway, Charlie Munger, was famously skeptical of conventional investing wisdom. During a 2017 presentation, Munger disclosed that his entire family portfolio—valued at approximately $2.6 billion—rested on just three major positions. This wasn’t recklessness; it was calculated conviction.

Munger openly criticized diversification as “a crutch for investors who lack confidence in their decisions.” His track record validated his approach: before joining Berkshire, his independent investment operation delivered 19.5% average annual returns between 1962 and 1975, dramatically outpacing the broader market indices.

Position One: The Retail Powerhouse

Munger’s decades-long relationship with Costco Wholesale exemplified his preference for “moat”-protected businesses. As a board member and devoted shareholder with over 187,000 shares (valued at roughly $110 million at the time), he characterized himself as “completely addicted” to the company’s model.

Since his passing in November 2023, Costco has delivered compelling returns: equity appreciation of 47%, coupled with a 27% dividend increase and a special $15-per-share distribution in early 2024 that provided an additional 2.3% yield. The company continues demonstrating the pricing power and operational excellence that drew Munger’s admiration.

Position Two: The Value-Focused Fund

In the early 2000s, Munger entrusted $88 million to Li Lu, a fund manager recognized as a “Chinese-style value investor” for his disciplined application of Buffett-Munger principles to emerging markets. Himalaya Capital, Lu’s investment vehicle, emphasizes Benjamin Graham-inspired value discipline.

Munger’s confidence proved justified. While the private hedge fund maintains limited public disclosure, its largest holding—Alphabet—has surged 130% in the period following Munger’s death. Alphabet represented nearly 40% of the fund’s portfolio value as of the most recent regulatory filing. Himalaya’s secondary positions, including Berkshire Hathaway itself, contributed to what Munger himself described as “ungodly returns.”

Position Three: The Core Holding

Berkshire Hathaway dominated Munger’s net worth, comprising roughly 90% of his final fortune. This represented a significant reduction from decades earlier: Munger had divested or donated approximately 75% of his original 18,829 Class A shares held in 1996. Had he maintained that complete stake, estimates suggest his wealth would have approached $10 billion.

At the time of his death, Munger controlled 4,033 Class A shares worth approximately $2.2 billion. In the subsequent 25 months, Berkshire Class A shares have appreciated 37%, continuing the wealth accumulation trajectory Munger helped architect.

The Broader Assessment

Two years after Munger’s passing, the aggregate performance of his three concentrated positions tells a nuanced story. Berkshire Class A shares (38% gain) and Costco (47% gain) have underperformed the broader S&P 500 (52% gain) during this period. Himalaya Capital’s exact returns remain private, though its top holdings suggest consistent double-digit performance.

Yet raw percentage returns capture only part of the investment thesis. Munger deliberately chose businesses with structural competitive advantages, lower volatility profiles, and resilient fundamentals. In an environment where value-oriented investing has faced significant headwinds, these three positions have demonstrated the durability of his investment principles—suggesting that sound capital allocation frameworks transcend market cycles.

The performance vindication may yet come, as these “moat-protected” enterprises potentially reward patient shareholders over longer horizons.