Jensen Huang resigned as Nvidia's CEO on Thursday, and within 72 hours the internet had settled on its preferred frame for the story: Charlie Munger's warning that smart people go broke in three ways — liquor, ladies, and leverage.

The AI chipmaker's founder stepped down after a scandal-filled week surrounding his personal life and his relationship with an alleged Chinese spy. His resignation followed fresh claims that he had an affair with a subordinate. Huang had already admitted to being "unfaithful" to his wife, according to a company memo.

The dayslong saga prompted commentators on X to reach for the canon of Warren Buffett and Munger, the former chairman and late vice-chairman of Berkshire Hathaway (the conglomerate they ran together for decades). The most-cited line is Buffett's retelling of his partner's adage.

"My partner Charlie says that there's only three ways that a smart person can go broke: liquor, ladies, and leverage," Buffett said in a 2018 interview. "Now, the truth is the first two he just added because they start with 'l' — it's leverage."

What are people actually quoting?

The archive of Berkshire aphorisms deployed this week includes several recurring entries:

• Munger's "ladies, liquor, and leverage" warning, which has even been translated into other languages in recent days, including Spanish.
• Buffett's reputation dictum: "It takes 20 years to build a reputation and five minutes to ruin it."
• His 1991 warning to Salomon Brothers employees as interim chairman: "Lose money for the firm, and I will be understanding. Lose a shred of reputation for the firm, and I will be ruthless."
• His message to Berkshire subsidiary managers: "We can afford to lose money — even a lot of money. But we can't afford to lose reputation — even a shred of reputation."

Buffett has also famously advised people never to do anything they would not want printed on the front page of their hometown newspaper for all their friends and family to see. That test, arguably, is the one Nvidia's board just graded.

Investor and commentator Anthony Pompliano captured the mood on X: "Everyone thought AI would blow up over leverage, but no one was prepared for it to be women." Another user, Trung Phan, quipped that Munger was "seeing his 'Liquor, Ladies, Leverage' quote being used more times in a 72 hours timeframe than any other time in human history."

What does this change for investors?

The memeing is not the whole story. The market has repriced both ends of the trade. Berkshire stock has rallied strongly in recent days as investors have soured on AI stocks like Nvidia amid concerns about overinvestment and fears of a regulatory crackdown (government action that could constrain the sector's growth).

The numbers are blunt. Berkshire Hathaway Class B shares have jumped 13% in the past month to trade at $590, close to a record high. Nvidia stock is down 27% over the same period.

That divergence tells you the quotes are doing more than decorative work. Investors fleeing AI exposure are parking capital in the value-investing fortress that Buffett and Munger built, and the spectacle of an AI-era founder felled by personal conduct is sharpening the appeal.

The old guard is gone

There is an irony worth noting: the men being quoted are no longer available to comment. Munger, Buffett's right-hand man for over 45 years, died at age 99 in November 2023. Buffett, now 96, stepped down as Berkshire's CEO at the end of last year and as its chairman in September.

Their words are circulating more widely than ever while they have both left the stage. Huang's departure, meanwhile, leaves the world's most consequential AI hardware company searching for leadership at the exact moment investors are questioning how much of the AI buildout they are willing to underwrite.

The lesson the crowd has drawn — that character risk is balance-sheet risk — was always in the Berkshire archive. It simply took a founder's resignation, a spy allegation, and a 27% drawdown to make it trend.

Whether the reputation arithmetic holds for Nvidia itself is a separate question. Buffett's five-minute rule has been applied to Huang personally. The company he founded still has to prove the damage stops at the top.