Kintsugi Investing

Nobody knew Buffett and Munger had a 3rd partner and close friend.

His name: Rick Guerin.

Brilliant, rich, with an enviable track record.

But one tragic mistake in 1973 cost him a fortune.

His story: 🧵 

In 1965-1983, Rick's partnership with Berkshire generated a compound return of 22,200%.

He invested alongside them in the early days, making over $10 million through deep-value investing.

For years, he was as rich (if not richer) than Buffett.

So, where did it all go wrong? 

Guerin wasn’t just a brilliant stock picker—he was aggressive.

Unlike Buffett and Munger, he used leverage to supercharge his returns.

When the market was soaring in the late ‘60s, his net worth surged past $50 million.

But then came the crash of 1973–74…

Markets collapsed, he lost 42% in 1973 and 34% more in 1974.

Margin calls rolled in.

Guerin had to sell 6,000 shares of Berkshire Hathaway at ~$40 per share (and more) to stay afloat.

Those shares would be worth over $3B today.

Buffett later explained it: 

“Charlie and I always knew that we would become incredibly wealthy. We were not in a hurry.

Rick was just as smart as us, but he was in a hurry.”

The market doesn’t reward impatience—it punishes it.

Munger called this the lesson of “Too much, too fast.”

The paradox of investing:

• The people who get rich the fastest often lose it all.
• The people who get rich the slowest usually keep it forever.

Buffett and Munger had a simple rule: Never risk what you have for what you don’t need.

Guerin’s mistake was thinking short-term leverage could speed up long-term compounding.

Instead, it destroyed him. 

Buffett’s secret wasn’t just picking great stocks.

It was never being forced to sell them.

• No leverage.
• No margin calls.
• No panic selling.

Just relentless patience.

Rick Guerin eventually rebuilt his wealth, reportedly amassing tens of millions again, but he never reached Buffett’s level.

The same man who once invested alongside him was left watching from the sidelines.

Because he was “in a hurry.”

The lesson:

Wealth isn’t just about picking great stocks.

It’s about surviving long enough to let compounding work its magic.

Because the market doesn’t care how smart you are.

It only rewards those who can stay in the game.

Rick Guerin’s story is a painful reminder:

• Never use leverage on long-term investments.
• Never be in a hurry to get rich.
• Never put yourself in a position where you have to sell.

Buffett &amp; Munger took the slow path.

We’re Zee and @thehowietan:
• Financially free investors
• Focused on asymmetry &amp; risk management
• Sharing insights to help you build &amp; repair your portfolio.

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https://x.com/kintsugiinvest/status/1894725796058796530?s=46&t=nBtSZMQ6-suZWCuy6mxMHg

@thehowietan Do you think leverage is a useful tool or a dangerous trap for investors?

Let us know 👇🏼

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