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Munger’s Daily Journal Broadens Investment Portfolio With a Sixth Holding


maxthetrade
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  • 2 weeks later...

Does anyone know more about DJCO? Portfolio of securities is probably worth somewhere around $80m now, earnings seem reasonably stable and market cap is only $102m. How about it's chairman, J.P. Guerin?

 

I'm going to look into it asap.

 

The operating business of DJCO is in decline.  Other than the temporary revenue spike in 2008-2010 due to the real estate crash increasing public notices, revenue is the same as ten years ago.  What is impressive is management's ability to reduce costs.  Operating income has gone from $1 to $2 million to $10 million in 2011.  EPS is above $5 per share.

 

From what I have read.  Holding #1 is WFC at about $44 million.  Holding #2 is USB at $3.6 million.  Holdings 3&4 are foreign companies that combined are valued at just under $1 million.  Holding #6 is the unknown addition in Q4 of 2011 at $13.6 million.  I hope it is BAC based on how it has performed recently, but who knows. 

 

J P "Rick" Guerin is profiled in Buffett's article "The Superinvestors of Graham-and-Doddsville" in Table 6.  He is mentioned quite frequently in Janet Lowe's book on Munger titled, "Damn Right."   

 

 

 

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Guest ValueCarl

Only a twenty five percent PREMIUM for inheriting the portfolio artwork of an ORIGINAL Superinvestor of Graham--and--Doddsville? I could see Charlie "kicking up" his "compounding machine" before he leaves us on his journey!

 

Charlie is not working from a $200B base, you know!  ;D 

 

 

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Long-time students of Charlie Munger are quite aware of Wesco (WSC), which Charlie has been Chairman of for some years.

 

However, the Daily Journal Corporation (DJCO), while smaller, is perhaps the fullest public expression of Charlie Munger's business creativity. According to the DJCO's latest proxy statement, Munger, Marshall & Co control 41.1% of the company's stock. Mr. Munger and Mr. Marshall are the sole general partners of the Munger, Marshall & Co partnership.

 

http://www.gurufocus.com/news/78840/charlie-munger-and-the-daily-journal-corporation

 

J.P. Guerin

Vice Chairman of the Board

Daily Journal Corporation

Los Angeles ,  CA

Sector: SERVICES  /  Publishing - Newspapers

 

Mr. Guerin is a private investor. Qualifications and Skills: Mr. Guerin has approximately 50 years of experience in business, working with both private and public companies. During that time, he has served on more than 20 boards of directors.

 

Mr. J. P. Guerin has been the Vice-Chairman and a Director of Daily Journal Corp. since 1977. Mr. Guerin has been Vice Chairman of PS Group (alternate name is PS Group Holdings Inc.) since 1997 and also its Director since January 30, 1996. Previously, he served as Chairman of PS Group Inc. ("PSG") Board of Directors from 1985 to 1991 and also as its Vice Chairman from 1991 to 1993. Prior to retiring in 2002, Mr. Guerin served as a Director of Lee Enterprises Incorporated, a company owning newspapers. He served as a Director of PSG from 1978 to the 1996 Reorganization was consummated.

 

                                                                              * * *

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If DJCO spun off their investment portfolio into a CEF, managed by Munger, with no fees like now, what are the odds it would trade at NAV? What would you pay for the privilege of having Munger invest your money for you, for free? This won't happen in a million years, nor should it, but they could if they wanted to. And it's interesting to think about when valuing...

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If DJCO spun off their investment portfolio into a CEF, managed by Munger, with no fees like now, what are the odds it would trade at NAV? What would you pay for the privilege of having Munger invest your money for you, for free? This won't happen in a million years, nor should it, but they could if they wanted to. And it's interesting to think about when valuing...

 

 

Smith Affiliated Capital and Allianz Global Investors ( The top Institutional & top Mutual Fund Holders ) at Central Fund of Canada Ltd( CEF :AMEX), would welcome Munger's Daily Journal with open arms.

 

But like you said it will never happen. Dream on - very nice idea. The love of Value makes one conjure up all sorts of images & ideas.

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If DJCO spun off their investment portfolio into a CEF, managed by Munger, with no fees like now, what are the odds it would trade at NAV? What would you pay for the privilege of having Munger invest your money for you, for free? This won't happen in a million years, nor should it, but they could if they wanted to. And it's interesting to think about when valuing...

 

 

Smith Affiliated Capital and Allianz Global Investors ( The top Institutional & top Mutual Fund Holders ) at Central Fund of Canada Ltd( CEF :AMEX), would welcome Munger's Daily Journal with open arms.

 

But like you said it will never happen. Dream on - very nice idea. The love of Value makes one conjure up all sorts of images & ideas.

 

Hester,

 

I believe strongly in the value of your professional investment advice.

 

The more I think about it, maybe you are on to something about; "If DJCO spun off their investment portfolio into a CEF, managed by Munger"

 

Or, Central Fund of Canada Ltd( CEF :AMEX  largest institutional holder - Allianz Global Investors

 

Allianz Global Investors is a global asset management group committed to helping clients achieve sustainable success. We draw on the intellectual capital of our diverse family of investment managers—each with their own distinctive philosophy and culture—to provide clients with a choice of innovative investment solutions, including mutual funds, managed accounts, closed-end funds, 529 plans and retirement offerings. We are part of the Allianz Group, one of the world’s leading integrated financial services providers.

 

Their range of investment products includes:

 

Mutual Funds   

Closed-End Funds 

Managed Accounts

 

 

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Guest ValueCarl

Does Mr. Munger like to eat his own cooking fresh from the ocean's BOTTOM? My good friend, Brker_guy, thinks BYD. Seems plausible to me!  ;D

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Guest ValueCarl

Thanks. Sorry to have spoken for Brker_guy, because initially he called out BAC during his travels. BYD could not be the one, at least for now. I'll go with BRK.B, since Charlie would have had to have done a 180 degree turnaround while having lambasted the BAC franchise less than eight months ago, in advance of WEB's preferred floor and seemingly correspondent "BAIL OUT!"  ;) Then again, it is not unwise for a rational investor to change directions when circumstances change one way or the other.     

 

<Daily Journal bought common stock in “another Fortune 200 company” in the three months ended Dec. 31, the Los Angeles- based publisher said in a regulatory filing today.>

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Holdings 3&4 are foreign companies that combined are valued at just under $1 million.

 

I doubt it since Munger spent $11.1m buying them.  ;D

 

wabuffo

 

You are right.  My bad.  The foreign positions have performed poorly so far.  They spent nearly $11 million in cost in early 2011 and ended with a value at calendar year end of approximately $7.4 million.

 

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Why wouldn't it be IBM? 

 

IBM is by far (at cost) Berkshire's largest equity investment ever. 

 

Warren and Charlie must feel pretty good about its future prospects.

Maybe DTV. Good capital management, operating results, modest valuation, and advantages in certain markets absent unexpected major infrastructure investments.

 

I think you both are thinking a head into the future with great ideas with IBM and DirecTV.

 

I would go one step further and tie them together.

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  • 2 months later...

10-Q is out and by my math it seems clear that newest holding is BAC.  DJCO is up to $82 and has $60 of cash and investments, net of deferred taxes.  First half of fiscal 2012 earnings per share of $2.72.  Four times earnings net of cash and investments. 

 

If the US lowers corporate tax rates to 25% in the near future that would not only improve earnings it would reduce the deferred taxes amount.  Double benefit.

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10-Q is out and by my math it seems clear that newest holding is BAC.  DJCO is up to $82 and has $60 of cash and investments, net of deferred taxes.  First half of fiscal 2012 earnings per share of $2.72.  Four times earnings net of cash and investments. 

 

If the US lowers corporate tax rates to 25% in the near future that would not only improve earnings it would reduce the deferred taxes amount.  Double benefit.

 

Thanks for the update, interesting to see a sixth holding. Munger has spoke positively about BAC.

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