How Charlie Munger Net Worth Built a $2.6 Billion Portfolio Without "Dumb" Diversification: The 2-Year Report Card

The Concentrated Bet Philosophy That Made Berkshire’s Co-Architect Rich

When Charlie Munger, Warren Buffett’s longtime partner at Berkshire Hathaway, passed away in November 2023, his $2.6 billion net worth stood as a testament to one radical investing idea: forget diversification. He famously dismissed the conventional wisdom of spreading investments across dozens of stocks, calling it “a rule for those who don’t know anything.” For those with genuine investment acumen, Munger believed you should deploy concentrated firepower into your best ideas.

Two years and one month later, we can finally audit whether this bold strategy—even in posthumous form—held up in real markets.

The Three Pillars of Munger’s Fortune

Munger’s approach defied modern portfolio theory. Almost his entire wealth sat in just three buckets. Before his death, this concentration was intentional. Earlier in his career, he ran his own investment vehicle and delivered 19.5% average annual returns from 1962 to 1975, crushing the Dow Jones Industrial Average by nearly 4-to-1. He knew exactly what he was doing.

Pillar One: Costco—The Retail “Moat” He Adored

Munger served on Costco Wholesale’s board for decades and developed what he called an addiction to the company. In 2022, he held over 187,000 shares (worth ~$110 million at the time) and publicly vowed never to part with a single one, declaring he “loved everything about Costco.”

Since his November 2023 passing, Costco Wholesale shares have climbed 47%. The company simultaneously raised its dividend by 27% and distributed a $15-per-share special dividend in January 2024—yielding 2.3% all by itself. That’s the kind of durable moat (competitive advantage) Munger sought: pricing power in a business difficult to replicate.

Pillar Two: Himalaya Capital—The “Ungodly Returns” Play

In the early 2000s, Munger entrusted $88 million to Li Lu, a fund manager often dubbed “the Chinese Warren Buffett” for his disciplined value investing approach. Li runs Himalaya Capital, which explicitly mirrors the principles of Buffett, Munger, and Benjamin Graham.

As a private hedge fund, Himalaya doesn’t disclose its full returns. But its largest holding—Alphabet (Google)—comprised nearly 40% of the fund’s assets under management as of the most recent regulatory filing. Google’s stock has surged 130% since Munger’s death. Munger’s earlier confidence in Li proved prescient; he regularly praised the fund for generating what he called “ungodly returns.”

Pillar Three: Berkshire Hathaway—The Core Conviction

Here’s where Munger’s wealth concentration becomes striking. By the time he died, Berkshire Hathaway represented roughly 90% of his $2.6 billion net worth. He held 4,033 Class A shares valued at approximately $2.2 billion.

Interestingly, this wasn’t always the case. Records show that in 1996, Munger owned 18,829 Berkshire Class A shares. He sold or donated roughly 75% of them over the decades. Had he held the entire original stake, his net worth would’ve reached an estimated $10 billion—a decision he apparently made on his own terms, not out of necessity.

Since his passing, Berkshire Hathaway Class A shares have risen 37%.

The Scorecard: How Concentrated Conviction Performed

Over the two years and one month since Munger’s death:

• Costco Wholesale: +47%
• Berkshire Hathaway: +38% (Class A)
• Alphabet (via Himalaya): +130% (top holding)
• S&P 500 (for comparison): +52%

At first glance, two of his three holdings lagged the broader market benchmark. Costco came closest to matching it; Berkshire underperformed. Himalaya’s other holdings have remained private, but their performance relative to Alphabet suggests solid double-digit gains.

What This Actually Means for Investors

The superficial takeaway? Munger’s concentrated bets didn’t beat the market over this specific 25-month window. But that misses the deeper point he spent a lifetime making.

Munger invested like a business owner, not a trader. Costco’s moat—its member-driven loyalty and operational efficiency—remains structurally intact. Berkshire’s diversified business empire continues generating reliable returns. Alphabet faces short-term headwinds but retains dominance in digital advertising and AI infrastructure.

These three holdings carry substantially lower volatility and downside risk compared to the S&P 500’s broader exposure. During market dislocations, that stability typically becomes invaluable. Munger’s “high-conviction” approach wasn’t about chasing maximum returns; it was about combining great fundamentals with acceptable downside.

The fact that value-oriented holdings delivered respectable gains even as growth stocks commanded outsized attention speaks to the timelessness of Munger’s philosophy. Two years post-mortem, his concentrated portfolio continues to demonstrate that knowing what you’re doing—and acting accordingly—beats guessing.