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Charlie Munger - "speculative frenzy" in the stock market


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https://markets.businessinsider.com/news/stocks/warren-buffett-partner-charlie-munger-speculative-frenzy-stocks-lack-bargains-2021-1-1029993473

 

Does anyone on the board have access to the letter mentioned in the article, and is willing to share? I did a quick search but couldn't seem to find it. Thanks in advance.

 

It is in the DJCO thread, but here it is -

https://proxy.dailyjournal.com/Chairman%20Letter%20for%20FY2020.pdf

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I don't think it is a very strong market call. All it is really saying is that segments of the market are speculative and to an extent speculation in some names has forced unreflective buying by the indexes. Both are difficult to argue with and are warning signs but nothing more and certainly not grounds to get out of the market completely.

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The dude is using margin. I mean, he can't be too concerned then, right?

 

mmm - he sold enough stock in the Sept Q to basically raise cash to cover 90%+ of the margin loan.  Prior to this Q, Munger didn't hold a lot of cash on the b/s.  So is he really still on margin?  Technically yes, but...

 

wabuffo

 

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The dude is using margin. I mean, he can't be too concerned then, right?

 

mmm - he sold enough stock in the Sept Q to basically raise cash to cover 90%+ of the margin loan.  Prior to this Q, Munger didn't hold a lot of cash on the b/s.  So is he really still on margin?  Technically yes, but...

 

wabuffo

 

Didn't know that. Thanks!

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The dude is using margin. I mean, he can't be too concerned then, right?

 

Lol. Maybe r/Wallstreetbets had it right. Hard to argue when even Charlie Munger is buying electric vehicle stocks on margin. I guess he did it before it was cool.

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Where can I see this information, that he is using margin?

 

I think folks are referring to the borrowings used by Munger to buy the two software companies in 2012 and 2013.

 

https://www.sec.gov/Archives/edgar/data/783412/000143774914011800/djco20130930_10k.htm

 

This is the description here in the 10-K: [click on the image for full-size viewing]

margin2.jpg

 

And you see the amount on the balance sheet here:

Margin.jpg

 

wabuffo

 

 

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The dude is using margin. I mean, he can't be too concerned then, right?

 

Where can I see this information, that he is using margin?

 

I just saw it in the letter:

 

"At September 30, 2020, the Company had not only its two businesses, but also a large trove of

liquid wealth consisting of $28,963,000 in cash and marketable common stocks with a value of

$179,368,000, offset by $29,493,000 in margin debt.:

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