Steve Ballmer once shared how Charlie Munger bluntly questioned his decision to hold Microsoft stock.

Speaking on the Acquired podcast in 2025, Ballmer recalled a candid exchange during a country club Q&A session in Los Angeles, where Munger didn't hold back.

"Steve, you know, I'm wondering why you held on to your Microsoft stock when your partners over there didn't," Munger said. "I know you're not that smart."

The remark, characteristic of Munger's famously direct style, drew laughs — but also underscored a serious investing principle.

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Ballmer said his response was simple: "No, Charlie, but I'm loyal."

Unlike some early Microsoft insiders, including Bill Gates, who diversified portions of their holdings over time, Ballmer chose to hold on to most of his stake in the company he joined in 1980 as employee No. 30.

For Ballmer, the decision wasn't purely financial.

"It's sort of a from-the-heart kind of thing," he said, adding that even in a worst-case scenario, "me and my family, we can live … I'm OK either way it goes."

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Munger, the longtime business partner of Warren Buffett, once told shareholders that his family's entire portfolio was concentrated in just three major investments.

While many financial advisors highlight diversification — spreading money across stocks, mutual funds and ETFs to limit risk — Munger argued that such a strategy isn't necessary for investors who truly understand their positions.

"Diversification is a rule for those who don't know anything," he said, adding that Buffett refers to them as "know-nothing investors."

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Today, Ballmer is worth more than $125 billion, according to Forbes, with much of his wealth tied to Microsoft, which has grown into one of the world's most valuable companies.

Ballmer, who held about 4% of Microsoft at the time of his retirement, has retained the majority of his stake and has said he remains the company's largest individual shareholder.

Microsoft currently has a market cap of $2.89 trillion.

In 2014, the same year he stepped down from Microsoft, Ballmer purchased the NBA's Los Angeles Clippers for $2 billion; the franchise is now valued at $7.5 billion by Forbes. He has since invested another $2 billion into building a new arena.

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This article Steve Ballmer Once Recalled Charlie Munger Telling Him: 'I Know, You're Not That Smart' — Here's What The Ex-Microsoft CEO Replied originally appeared on Benzinga.com