Charlie Munger influenced three generations of Damanis, says Ramesh Damani

The veteran investor recalled Munger’s cult following and divulged that Munger had a very revered following in India too and there is a institute in Pune and the dining hall is named after Munger

Charlie Munger has had a profound influence on three generations of the Damani family, says Ramesh Damani, admitting that he learnt the power of holding a business over a long time and seeing it compound from Munger.

In an interview with CNBC-TV18, the veteran investor talked at length about how the late Berkshire Hathaway vice-chairman who was regarded as Warren Buffett's closest aide had influenced the Damanis.

Charlie Munger, the billionaire philanthropist, died on November 28 night in California. He was 99.

Reflecting on the life lesson he learnt from Munger, Damani said that the former Berkshire VC was well-known for calling a spade a spade. “I have been fortunate to attend a few of the AGMs of Berkshire and meet him (Munger) and sitting in his presence has been one of the kick marks of my life,” Damani said. “When Munger spoke he spoke with such candour and preciseness that I can safely say that a generation of value investors are in awe of him.”

He understood from Munger that volatility is a character of the market. “Munger taught all of us and Warren Buffet, too, by examples. One of the examples that he taught us is that instead of buying a fair business at a wonderful price or buy a cigar butt as Warren Buffet was prone to doing is to buy a great business push the envelope in what a great business is and pay a fair price for that and one of the first investments they made was Coca-Cola,” Damani said.

The veteran investor recalled Munger’s cult following and divulged that Munger had a very revered following in India too and there is a institute in Pune and the dining hall is named after Munger so many are already familiar with his name. “Munger’s beliefs and his stoicism that whatever happens to you, you have to deal with it, don't complain, don't explain and what I have learned from Warren and Charlie is holding a business for a long time and the power of compounding it. I try to find business that I can hold for 10, 20, 25 years because I learned from Munger and Buffett,” he said.

Highlighting another importance of long-term investments, Damani said, “Everyone knows about his investments in Coke, Costco and what they don't understand is that he went to China and bought BYD, an EV maker and a rival to Tesla, the stock went up and languished for many years the suddenly went up in the past 3/4 years.”

Damani also said that Muger believed that India would learn a lot from Singapore in terms of legislation and growth strategies. “I think there is a lot of anger in India right now with the volume of derivatives trading and options trading and if Munger had his view he would say that equity should be traded like real estate very sparingly and certainly not in the frequency that we do in India or in America. I think he felt that a lot of trading is extremely bright people doing non-productive work in society.”