Charlie Munger and the Daily Journal Corporation (DJCO)

[dcollon]

Thanks for all the posts from the meeting.

 

 

[JBird]

If you're interested in having typed notes PM me. I think the spirit of Charlie's meetings is in sharing wisdom for nothing in return. If we get enough people interested we can pool the cost of having my audio file converted to text.

[Guest longinvestor]

If you're interested in having typed notes PM me. I think the spirit of Charlie's meetings is in sharing wisdom for nothing in return. If we get enough people interested we can pool the cost of having my audio file converted to text.

Thx for posting the audio. Prefer that medium myself, get to repeatedly listen via Bluetooth while driving. Distance no matter this way.

[cubsfan]

First of all, thanks to JBird for the great audio file.

Having gone to the meeting before, and not being able to go this time, it was terrific to hear Charlie's voice again.

The jokes and intonation come across much better than in the notes.

 

I will however give FarnamStreet his due: his notes are simply fantastic, and much of what you will miss

in the audio - you will pick up in his transcript. I took pages and pages of notes at the previous DJCO meeting,

but they simply did not compare in terms of completeness with FarnamStreet 40+ pages of notes.

And I'm happy to pay a very reasonable fee to fully capture the full force of Munger's intellect and have a historical record.

I've re-read those notes many times - better than most books as far as I am concerned.

 

I'm grateful to both of you for contributing to this effort.

 

And thanks to all the other members that have shared their personal DJCO notes and efforts.

[kiwing100]

If you're interested in having typed notes PM me. I think the spirit of Charlie's meetings is in sharing wisdom for nothing in return. If we get enough people interested we can pool the cost of having my audio file converted to text.

 

Thank you very much JBird for sharing your audio file.

[smd123]

I think the spirit of Charlie's meetings is in sharing wisdom for nothing in return.

 

Well said.

[rranjan]

Here's a 2 hour audio clip of the Q & A. It includes everything except the very first question (which Charlie said happened to be the most intelligent question ever asked at the meeting, haha)

 

Thanks a bunch for posting it here. It was a very clear recording and so nice to hear it all.

[Kiltacular]

Here's a 2 hour audio clip of the Q & A. It includes everything except the very first question (which Charlie said happened to be the most intelligent question ever asked at the meeting, haha)

 

This is outstanding.  Thank you.

[jeremykgold]

Here's a 2 hour audio clip of the Q & A. It includes everything except the very first question (which Charlie said happened to be the most intelligent question ever asked at the meeting, haha)

 

Well, I have to ask then. What was the first question? TIA.

[MrB]

Here's a 2 hour audio clip of the Q & A. It includes everything except the very first question (which Charlie said happened to be the most intelligent question ever asked at the meeting, haha)

 

Well, I have to ask then. What was the first question? TIA.

http://bambooinnovator.com/2015/04/01/mungers-wisdom-and-comments-on-lky-in-notes-on-daily-journals-shareholder-meeting/

[peter1234]

Mr. Bs link in plain text

http://www.valuewalk.com/2015/04/charlie-munger-daily-journal-2015-meeting-notes/

[Jurgis]

Mr. Bs link in plain text

http://www.valuewalk.com/2015/04/charlie-munger-daily-journal-2015-meeting-notes/

 

Just FYI this transcript has some errors. E.g. Munger's Posco answer is quite different in audio.

[JBird]

Here's a 2 hour audio clip of the Q & A. It includes everything except the very first question (which Charlie said happened to be the most intelligent question ever asked at the meeting, haha)

 

Well, I have to ask then. What was the first question? TIA.

 

My recollection is he asked what milestones Charlie expects to see in the legal publishing business. Charlie responded that it was an important question because it affects the entire future of the company.

[Gopinath]

thanks for the audio JBird!

[peter1234]

thanks for the audio JBird!

+1

Thank you Mr. Bird. Awesome.

:)

[sleepydragon]

thanks for the audio JBird!

+1

Thank you Mr. Bird. Awesome.

:)

 

What? It's free?! I can't believe it. Does this violate any anti-dumping law. Why are you doing this?!

J/k :)

[gurpaul88]

thanks for the audio JBird!

+1

Thank you Mr. Bird. Awesome.

:)

 

What? It's free?! I can't believe it. Does this violate any anti-dumping law. Why are you doing this?!

J/k :)

 

+! Thanks a bunch!

[rijk]

very interesting

 

thanks jbird!

 

regards

rijk

[TREVNI]

Anyone know when the next annual meeting is? Is it this year, since the last one was delayed? Aren't they usually in September?

[cubsfan]

They are usually in February.

[JBird]

As of Feb 29, 2016, the market value of DJCO's stock portfolio was $109 million. The portfolio consists of $74.6 million in WFC (68.5%), $28.8 million in BAC (26.4%), $5.4 million in USB (5%).*

 

I estimate the intrinsic value of the Daily Journal by summing its stock portfolio valued at market ($109 million), plus excess cash (~$5 million) minus its margin loan ($32 million), plus the intrinsic value of the legal publishing business ($5 to $30 million), for a total of about $90 to $115 million. That's $80 a share.

 

DJCO is valued at $275 million and has an implied valuation on the legal-publishing business of ~$190 million (DJCO market cap - stock portfolio + excess cash - margin loan).

 

I think DJCO is a reasonable short-sell candidate. To hedge shorting risk, and to short the valuation of the legal-publishing business specifically, one would short DJCO and go long the DJCO stock positions in proportion to each stock’s representation of DJCO’s market capitalization.

 

Put on the following trade: 1) Short $X worth of DJCO 2) Initiate a long position in WFC worth .27 of X, a position in BAC worth .10 of X, and a position in USB worth .02 of X. Finally, 3) As the implied earnings multiple on the legal-publishing business collapses from 190 to say, 40, the short should be covered and the long positions sold.

 

This short trade has roughly 55% upside, less borrowing costs (which are currently zero). In order to sustain a permanent loss of capital on this trade, the earnings from the legal-publishing business must grow to justify and then exceed a $190 million valuation. I estimate that in order to do so the earnings must compound at 30% per annum for at least a decade.

 

It's worth noting that a true groupie and cloner has taken an enormous position in DJCO and may be partly responsible for the current stock price.**

 

If you have any disconfirming evidence I'd love to hear about it.

 

* http://whalewisdom.com/filer/daily-journal-corp#/tabholdings_tab_link

** http://whalewisdom.com/filer/rwwm-inc