Charlie Munger and Warren Buffett's Three Core Bets: Performance Check After Two Years

When Charlie Munger passed away in November 2023, the investment world lost one of its most distinctive voices. Yet the legacy he and Warren Buffett built together continues to speak through their concentrated portfolio holdings. Unlike conventional wisdom that preaches broad diversification, both Munger and Warren Buffett championed the counterintuitive strategy of “putting your eggs in fewer baskets” — but making sure those baskets were exceptional. In a 2017 disclosure, Munger revealed that almost his entire $2.6 billion net worth was concentrated in just three investments, a stark rejection of diversification that he famously called a “rule for those who don’t know anything.”

With more than two years having elapsed since Munger’s death, it’s worth examining how these three cornerstone positions have evolved and what they tell us about the enduring power of focused, principled investing.

The Retail Giant: Costco’s Steady Climb Under Munger’s Legacy

Munger’s 40-year association with Costco Wholesale as a board member wasn’t mere involvement — it was passion. He openly described himself as “a total addict” of the membership-based retailer and pledged to never sell a single share. At the time of his death, his 187,000 shares represented the second-largest stake in the company, worth approximately $110 million.

Since November 2023, Costco shares have returned 47%, while the company simultaneously rewarded shareholders with a 27% dividend increase and a special $15-per-share distribution in January 2024. While this performance trails the S&P 500’s 52% gain over the same period, it represents exactly the kind of steady, sustainable value creation that both Munger and Warren Buffett have always sought. Costco’s consistent execution and pricing power — fundamental hallmarks of what investors call “moats,” or competitive advantages — have proven resilient even as economic conditions shifted.

Private Equity Gamble: How Himalaya Capital Delivered on Munger’s Vision

In the early 2000s, Munger placed approximately $88 million under management with Li Lu, the founder of Himalaya Capital. Lu has earned recognition as “the Chinese Warren Buffett” for his disciplined application of value investing principles adapted to Asian markets. Munger’s confidence in Lu’s approach proved abundantly justified, with the fund delivering what Munger himself termed “ungodly returns.”

As a private hedge fund, Himalaya Capital doesn’t publicly disclose comprehensive performance data. However, examining its largest holding provides useful insight: Alphabet (Google’s parent company) has surged 130% since Munger’s passing and represented nearly 40% of the fund’s assets under management as of the most recent regulatory filing. Combined with strong performance from Berkshire Hathaway — the fund’s second-largest position — the trajectory suggests Himalaya has delivered double-digit annualized gains throughout the two-year period.

The Core Holding: Berkshire’s 37% Jump Reflects Investment Discipline

Perhaps most revealing about Munger’s investment philosophy is what he chose not to do: he sold or donated roughly 75% of his Berkshire Hathaway Class A shares between 1996 and his passing. Had he maintained his full original position of 18,829 shares from 1996, his net worth would likely have approached $10 billion. Instead, at his death, Munger held 4,033 Class A shares, representing nearly 90% of his entire net worth.

This concentrated bet on Berkshire wasn’t careless — it reflected absolute conviction in the principles that he and Warren Buffett had spent decades perfecting. Over the two-plus years since November 2023, Berkshire’s Class A shares have climbed 37%, delivering solid returns that underscore the resilience of their fundamental business model.

What These Returns Reveal About Value Investing in 2026

The numbers tell a nuanced story. Munger’s three core holdings have generated respectable returns — Costco up 47%, Berkshire up 37%, and Himalaya’s top positions up substantially — yet they haven’t dramatically outpaced the broader S&P 500’s 52% rise. Yet this comparison misses the deeper point that both Munger and Warren Buffett would emphasize.

Absolute returns represent only one dimension of investing success. These three positions share DNA that sets them apart: entrenched competitive advantages, management focused on long-term value creation rather than quarterly performance, and business models that function across varying economic conditions. By their nature, they tend to be less volatile and less risky than the broader market. For a thoughtful investor like Munger, that risk-adjusted return profile held substantial appeal.

More importantly, the fact that these value-focused investments have held their ground during a period when many growth and momentum strategies dominated reflects something profound: the enduring validity of the investing principles Charlie Munger and Warren Buffett pioneered. Even with Munger gone, his three concentrated bets continue to validate the philosophy that patient capital, disciplined selection, and genuine conviction in outstanding businesses form the foundation of genuine wealth creation over time.