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kiwing100

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    Poor Charlie's Almanack

    in Books

    Posted

    Today, we’re releasing a conversation between John Collison and Charlie Munger. We've had this interview with Charlie scheduled to air for a while, coinciding with Stripe Press's launch of the amazing reprint of Poor Charlie's Almanack, which is released today.

    We were all stunned last week when we heard the news of Charlie's passing, but having consulted with those close to him, everyone agreed that he'd want us to release this interview. I'm thankful to be able to learn from him just one more time in this interview. Please enjoy, and may Charlie Rest in Peace.

     


    https://podcasts.google.com/feed/aHR0cHM6Ly9pbnZlc3RsaWtldGhlYmVzdC5saWJzeW4uY29tL3Jzcw/episode/NTNjNjY5ZTQtOTJiYS0xMWVlLTg0NjQtMzNkZTIzOWQxODBk?sa=X&ved=0CAgQuIEEahgKEwjIm8je2_qCAxUAAAAAHQAAAAAQ4gM

    Berkshire Annual meeting - 50% a year?

    in Berkshire Hathaway

    Posted

    Where can you see 005389.KS in the DJCO portfolio? Is there some filing?  FYI, I looked in the 10K and nothing was mentioned.

    I believe what wabuffo is saying is that he has inferred the identity of the undisclosed foreign security by looking at the end of quarter marks for DJCO's entire investment portfolio and backing out the known, disclosed positions.  005389.KS lines up with those marks, which as more quarters are reported becomes less and less likely to be a coincidence. 

     

    gfp is correct.  To my knowledge Charlie has never disclosed the identity of the South Korean manufacturing company in the DJCO portfolio.  He did disclose that the other foreign manufacturing company on the Hong Kong exchange is BYD (1211.HK) at the AGM last year:

    https://www.sec.gov/Archives/edgar/data/783412/000143774918002649/djco20180215_8k.htm

     

    Using publicly available information, one can easily identify the mystery South Korean stock.  Here's a table that shows the start of how to do that. 

     

    http://i68.tinypic.com/2efpctk.jpg

     

    DJCO has to file a 13F every quarter and outline its holdings of its four US-listed stocks (WFC, USB, BAC, PKX).  One can back into the quarter-end fair values of its two foreign-listed stocks by subtracting the amounts in the 13-Fs with their total holdings of common stocks reported in the 10-Qs, 10-Ks.  We can see that the bigger position is BYD.  We can use the BYD information to calculate the quarter-end fair values of the South Korean stock (and then figure out what stock it is).

     

    http://i65.tinypic.com/2eoce55.jpg

     

    To calculate the quarter-end fair values of DJCO's holding of BYD (1211.HK) we need to peg it to the quarter-end reported fair values of BYD by BRK Energy (a more-or-less permanent holding) in its 10-Qs, 10-Ks.  You can see that the annual values (9/30) declared in the foreign currency risk section in the DJCO 10-K tie with the calculated values using BRK Energy's fair values of its BYD holding. 

     

    Using the fair value of DJCO's BYD holding, we can then back into the quarter-end fair values of DJCO's mystery South Korean exchange-listed security.  If we compare the index vs the 9/30/17 fair value of this holding with the calculated USD-value of Hyundai Pfd Series 3 (005389.KS) quarter-end prices converted to USD from South Korean won, you can see that the quarterly index values match exactly.  This makes it virtually certain that this is the South Korean-listed stock that DJCO owns. 

     

    There's other circumstantial evidence that supports this hypothesis.  One is the Alfred Munger Trust holdings of Hyundai securities.  A second data point is that Li Lu (who manages Munger's money in his Himalaya Capital fund) presented South Korean preferreds (which are actually non-voting common shares) being mispriced versus their voting common equity pairs at a Sohn Conference in 2013 and has probably influenced Munger's thinking in this area (Munger first started buying Hyundai Series 3 Preferred for DJCO during late 2014).

    https://www.marketfolly.com/2013/05/li-lus-sohn-conference-presentation-on.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+MarketFolly+(Market+Folly)

     

    And then again I could be wrong  8)

     

    wabuffo

     

    Wabuffo,

     

    Many thanks to you for your very comprehensive response.

    Berkshire Annual meeting - 50% a year?

    in Berkshire Hathaway

    Posted

    Which Hyundai entity is it? (There are quite a few - Hyundai Motors, Hyundai Engineering & Construction, Hyundai Dept Store, Hyundai Fire & Marine, Hyundai Green Food, Hyundai Merchant Marine, Hyundai Heavy, Hyundai Corp, Hyundai Mobis, Hyundai Steel, Hyundai Mipo)

     

    By isolating the quarter-end fair value dollar amounts and comparing the Q-to-Q change in fair values to quarter-end prices (converted to USD), I believe Munger has also purchased Hyundai Motors Preferreds in the DJCO portfolio.  Specifically, the 005389.KS ticker on the South Korean stock exchange.

     

    It hasn't been a winner for him, so far.

     

    wabuffo

     

    Wabuffo,

     

    Thank you for that.  Where can you see 005389.KS in the DJCO portfolio? Is there some filing? 

     

    FYI, I looked in the 10K and nothing was mentioned.

    Berkshire Annual meeting - 50% a year?

    in Berkshire Hathaway

    Posted

     

    Take Munger’s smaller pools of capital—The Daily Journal and his foundation. 

     

    How about his foundation?  The only large investment he has made in the foundation in the last five years (Hyundai common and preferred) is probably down by 50%.

     

     

    Poor Charlie

     

    1) How did you find out about the Munger foundation's investment in Hyundai?  Is there a list or filing made?

    2) Which Hyundai entity is it? (There are quite a few - Hyundai Motors, Hyundai Engineering & Construction, Hyundai Dept Store, Hyundai Fire & Marine, Hyundai Green Food, Hyundai Merchant Marine, Hyundai Heavy, Hyundai Corp, Hyundai Mobis, Hyundai Steel, Hyundai Mipo)

     

    Thanks in advance.

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