Our editorial system and our advertising system are all in the cloud. Youve even said business schools that dont adopt this method are doing their students a disservice. I dont think its easy for ordinary people to become great investors. Do you think the Daily Journal would have hundreds of millions of marketable securities now if Gerry didnt know how to learn something new? I hope that that will continue in the future. DAILY JOURNAL CORPORATION : Shareholders Board In a shareholder letter, Barra said 2023 will be a "breakout year" for GM's Ultium-based EVs. Charlie Munger: Well, I dont think I know exactly what the future of banking is and I dont think I know how the payment system will evolve. Practically everybody does that. Apartments have come through better. Copyright FactSet Research Systems Inc. All rights reserved. And it has saved Los Angeles a fortune because gas is so much cheaper than gasoline. Jamie Dimon's Letter to Shareholders, Annual Report 2021 Charlie Munger: Its partly culture but a lot of it is just born in and its a quirk. Question: You identified the opportunity in electrification and invested in BYD. And, he was very good company and a splendid gentleman. And there arent many people that can do that. You used examples of Lee Kuan Yews good judgment in choosing someone with brains over certain physical attributes in your past interview. We cant promise what the outcome will be but we are trying pretty hard and we get some favorable impressions of progress. What would be a mistake at the Daily Journal which we can all learn from? At the age of 97, Charlie Munger wasnot surprisinglysharp as a tack. Charlie Munger: Early 70s. Amazon's 1997 Shareholder Letter Warren Buffett's highly anticipated annual Lane Hickenbottom/Reuters Warren Buffett's longtime business partner called out a To the extent that my thoughts have helped my life, I think Ive pretty well run the course. What do you think we can do to help those who are currently falling behind as a result of this pandemic? He was fun to be with because he was always jumping out of airplanes and parachutes and running marathons and so on, doing all kinds of things I would never consider doing. If you have unrealistic expectations, youre going to be miserable all your life. And what he does is he sells about half of them always. And, of course, thats a very dangerous way to invest. He was a very smart man and he had a lot of good ideas. He was death on corruption which was a very good idea. I find it much easier to find four or five investments where I have a pretty reasonable chance of being right that theyre way above average. With that one exception, Ive stayed out of Sequoias business because theyre so much better at it than I would be and I dont know how to do it the way they do it. The mantra he said over and over again is very simple. %%`EQ=@jMjkjJn. g5? 5T Culture is very important. Julia La Roche - Amazon Web Services The JTI software has been configured for other judicial and justice agencies, including district attorneys, prosecutors, public defenders, probation, etc. How concerned is he about Chinese government interference as seen recently with Ant Financial, Alibaba, and Mr. Jack Ma. We focused and de-risked the company through strategic portfolio actions, significantly accelerated our debt reduction, tzJ/wa*''=`R9+eJ}hv&iA+sn\/t`5q2(5l.h% dD2)ls.sz M4Z6X_h+ak,+,D^'a%&2K~SO@z'9f)xC? 6ZERFyGh.Q{BoM$k2YNNV'Vq3yd;6. Thats a really good rule. Question: Should there be a tax on buying stock now that Robinhood trades are free? You get crazy booms. So, I think you can count on the fact that what were doing is going to be a big growing field. Privacy Policy. He was just a very old-fashioned sound thinker. And that is why Costco presents some danger to Amazon. Charlie Munger: I think Im alive because of a lucky genetic accident. Gerald Salzman: Well, we dont think about mistakes. When people gave me a good idea and I could see it was a good idea, I quickly mastered it and started using it for the rest of my life. Rick was part of the group which consisted of Warren Buffett, Rick Guerin, and Charlie Munger that bought control of Blue Chip Stamps when it was widely distributed in an anti-trust settlement. I think that to some extent the complaint about the rich getting richer as a result of the COVID panic is a misplaced concern. On the other hand, the buses in Los Angeles work on natural gas. Also, fortunately before the pandemic, we got out of the conference-type events and we were not subjected to the problems of no conferences nobody to attend. That word focuses Bezos and focuses the people that look to him for guidance. Have you considered amending this quote or lowering your standards? Charlie Munger: Its very hard to have a shrinking business. Daily Journal Corporation - Shareholder/Analyst Call <> At this rate, I think they would have come out worse because their position was so dire and the poverty was so extreme, they needed very extreme methods to get out of the fix they were in. Cryptocurrencies: Cryptocurrency quotes are updated in real-time. I think most people who are assuming tolerable success in life are about as happy as they were ordained to be. But, but by and large, most of the knowledge has been available for a long time. While there were only 410 shareholders of record of Daily Journal's common stock as of Dec. 15, according to its annual report, Munger attracts a sizable I have a very simple idea on the subject. I think the world is gonna be quite different. Just think of the things that were once prosperous that are now in failure or gone. Charlie Munger: Well, the one charitable institution where I have had some influence for a very long time has a whole bunch of hotshot financiers in every branch of wealth management there is on the board. Cookie Notice Classified advertising is down significantly. GM raises its 2023 earnings outlook | Automotive News Charlie Munger: Well, the people doing the computer software are doing magnificently wellthe people under Gerry: Maryjo and Danny. I tell a story on Rick that he took the Navys IQ test and got one of the highest scores ever recorded and left early. Charlie Munger: I cant think of a We paid high prices for some little companies in the course of trying to enter the court software business. Charlie Munger: Well, I dont participate at all. And I applaud the result. I love connecting with other curious nerds so if you have a comment to my article or want to introduce yourself, shoot me an email. The best venture capital operation probably in the whole world is Sequoias and they are very good at this early stage investing. Youve reached the limit of my circle of competence. And, we hope to do well in it. 3 0 obj It doesnt happen anymore. Thats the nature of capitalism. You can hardly think of anything more important in life than being reliable for the people who trust you. Generally, what people do is they have financial reserves so they have some options if trouble comes, and they adapt the way Gerry has to require downsizings or require upsizings. But he could play chess blindfolded at just below the Grandmaster level. Question: You often advocate for learning from other peoples big calamities and stupidities. Its very difficult to hire reporters in the San Francisco area with all the demands coming from the internet companies wanting to have an editorial product. Can U.S. Treasury bonds be such a case today? I think office buildings are now in some trouble and, of course, commercial real estate rented to stores has been in a lot of trouble for a long time. Has there been anything that has surprised you, and what would be your best advice to someone starting a business now? I dont think its like the newspaper business. If the seas were to rise 60 feet, which could happen in another 100 years or so, wed have to build enormous barriers to sea entry. Charlie Munger: We will not be following Tesla into bitcoin. I think the Chinese were very smart. Ive been engaged in recent years in trying to create a better type of student dormitory. Sure, we all love the kind of civilization we have. Thats what the communists are doing. By rejecting non-essential cookies, Reddit may still use certain cookies to ensure the proper functionality of our platform. Do you agree with the premise and if so how would you address inequality? Dear shareholders: Over the past 25 years at Amazon, Ive had the That thing circulates. At the age of 97, Charlie Munger wasnot surprisinglysharp as a tack. Daily Active Users (DAUs) totaled 53.3 million in June 2022, year versus 3.571 billion hours in May, up 10% over May 2021. What prevents the wide use of helpful psychological insight is the fact that psychology gets really useful when you integrate it with all other knowledge. Key Points. And like last year, you will in this note find a full transcript of the entire meeting. WebCharlie Munger at the 2021 Daily Journal annual meeting spoke once again at great length. So human greed and the aggression of the brokerage community create these bubbles from time to time. Charlie Munger: I dont think I have a lot of wonderful advice about starting a business but what youve learned in the pandemic is that we can do with a lot less travel and a lot more Zooming. So, its a very interesting competitive field. Of course, if he had a chance to do it over again, he would avoid those mistakes. And I think thats what shareholders do. What were the lessons learned? Some people think that value investing is you chase companies that have a lot of cash and theyre in a lousy business or something. GE released its 2021 Annual Report today. Without the method of learning, youre like a one-legged man in an ass-kicking contest. Question: If you had a chance to make an addition or revision to Poor Charlies Almanac, what would that be? He knew everybody and everything. He took over a malarial swamp with no army, no nothing. Questions: Now that we are cash flow positiveassuming the software business is investing organically as much as it canwhat is the philosophical thinking with respect to capital allocation at the Daily Journal. All we can promise is that were gonna try and so far as I can tell, were doing pretty well. And some types of real estate in recent years has been particularly difficult. But I do think having a whole system to sell hydrogen is difficult. I do think that a properly run bank is a great contributor to civilization and that the central banks of the world like controlling their own banking system and their own money supplies. Charlie Munger: Well, of course, if a person is a chronic drunk, we avoid him. He was a very smart man. Question: Charlie, you have been a long-time admirer of Singapore and Lee Kuan Yew. Charlie Munger: Modern monetary theory means that people are less worried about an inflationary disaster like Weimar Germany from government printing of money and spending it. Theres no question about the fact that Wells Fargo has disappointed long-term investors like Berkshire because the old managementwhich is now removedwere not consciously malevolent or thieving but they had terrible judgment in having a culture of cross-selling where the incentives on the poorly paid employees were too great to sell stuff that customers didnt really need. Were beholden to the guidelines of the county of Los Angeles and other counties. Gerry, dont you think were doing pretty well? Where does it appear most egregious? And its a shame that the economics textbooks dont emphasize how much a growing economy needs poverty in order to get out of poverty. Charlie Munger: Theres one thing that were quite passionate about and that is serving the customers who have trusted us. For more information, please see our Now 16 years have passed. Hell be able to do it. Theres an old German proverb Ive always liked. Of course, its hard to know what the future holds when in a complex system where you cant predict a lot of things. Do you think that digital economy has reached a tipping point such that this time is different and that conventional valuation measures for these types of companies are dead, or does this environment remind you of 1999? The former majority owners of Bank of Blue Valley and Morill & Janes Bank, Bob Regnier and Kurt Saylor respectively, both signed the shareholder letter. Youre better off concentrating your decision power on one person the way the Li Lu partnership does and then choose the right person. Every value investor tries to get more value than he pays for. And if youre selling them gambling services where you make profits off of the top, like many of these new brokers who specialize in luring the amateurs in, I think its a dirty way to make money. I think all good investing is value investing. Charlie Munger: Well, I do have a tip. Absolute insanity. But, of course, I think there will be more automation in transportation of all kinds in the future. 2023 Junto Investments, all rights reserved. Its doing a big public service. When I look at the modern Singapore health system, it costs 20% of what the American system costs. Kipling once wrote a poem called The Women (The Ladies) and the concluding line was to the effect that you should learn about women from him instead of doing it yourself, because, he says, I know you wont follow my advice. This is cheap compared to Tesla currently valued at over 1100 times P/E and 24 times sales. That is true and makes sense. Imagine a bunch of Chinese communists turning a whole lot of Chinese and the billionaires in a big hurry. I think civilization would do better without it. International stock quotes are delayed as per exchange requirements. Charlie Munger: Well, I hope we dont have fewer truck stocks because Berkshire Hathaway is deeply involved in truck stops. Is it Bitcoin, decentralized finance, or something else? And in biology, what happens is the individuals all die, and eventually, so do all the species. Theres a lot of competition and were a very small company compared to our main competitor. What little newspaper company has come through the crisis of this destroying of all the newspapers better than the little Daily Journal? Charlie Munger: I would go further. Do it right the first time. I dont think we have any great gift at making macroeconomic predictions. But, I dont think Ive got a lot to contribute. You can hardly think of a decision that matters more to human felicity than who you marry. 02/15. By the way, thats not the normal outcome in America. He was a one party system but he could always be removed by the electorate. FactSet (a) does not make any express or implied warranties of any kind regarding the data, including, without limitation, any warranty of merchantability or fitness for a particular purpose or use; and (b) shall not be liable for any errors, incompleteness, interruption or delay, action taken in reliance on any data, or for any damages resulting therefrom. We admire the company and like its position. Charlie Munger: Well, you know, I had a failed marriage, so I dont think Im in the perfect position to advise the young about marriage. We take the situation as it is and try to solve it. Question: Do you believe the valuations for electric car manufacturers are in bubble territory? And we pay huge taxes to a combination of the federal government and the state of California when we sell something. Facebook; Instagram; LinkedIn; Twitter; Youtube; Shop Amazon.com Many of our systems are in the cloud. By using our website or by closing this message box, you agree to our use of browser capability checks, and to our use of cookies as described in our Cookie Policy. Of course, its going to be difficult. Thats been greatly curtailed. He was very courageous and generous in helping everybody around him all his life. I think that the methods that Ive used including the checklists are the correct methods and Im grateful that I found them as early as I did and that the methods have worked as well as they have. Data are provided 'as is' for informational purposes only and are not intended for trading purposes. Shareholder Charlie Munger: Yes, I think it must end badly but I dont know when. %PDF-1.5 Gerald Salzman: Always upbeat, yes. Charlie Munger: I think everybody is willing to hold stocks at higher price-earnings multiples when interest rates are as low as they are now. Furthermore, hed gone through the Great Depression. 2021 Letter to Shareholders. He lived in a particular town. So you now know what I do in charitable institutions. Generally speaking, people assume that were a normal software company like Microsoft or something. Change value during other periods is calculated as the difference between the last trade and the most recent settle. Charlie Munger: Its quite importantpart of the success of a company like Costco. Charlie Munger: Well, I consider that very unlikely. And I dont think that we or the Daily Journal is getting ahead because weve got some wonderful macroeconomic insight. Interpretations of those facts will vary. He doesnt mind at all not getting credit for his charitable donations. WebThe U.S. economy is strong. A lot of people assume that since England led the Industrial Revolution and had free speech early that free speech is required to have a booming economy as prescribed by Adam Smith. And why did you feel that Amazon had more to fear from Costco than Costco had to fear from Amazon? Charlie Munger: 2022 Daily Journal Annual Meeting Transcript, Charlie Munger: 2020 Daily Journal Annual Meeting Transcript. 2022 . We have offices in all the major cities in California and also in Logan, Utah. Highlights From JPMorgan CEO Jamie Dimon's Annual Letter Im pretty easy on myself these days. Charlie Munger: Well, I never owned a share of General Electric because I didnt like the culture. Part of the reason for that was cultural. Larry Summers has recently been quoted as being worried that were having too much stimulus. 2021 [The questioner] would like to know what Charlies method of learning is. I do think the present CEO is an extraordinarily able man and the directors made a very wise choice when they put him in charge. Shareholder Letter WebMunger's terse letter to Daily Journal shareholders. When you get into these hard questions, theres a lot of very intelligent honorable people who reach opposite conclusions. And another shareholder asked: Dear Mr. Munger, please share your thoughts on the recent /r/WallStreetBets GameStop short squeeze. I wouldnt change my life all that well. WebAnnual reports, proxies and shareholder letters. If you try and reduce the poverty too much, its counterproductive. Could you please elaborate on the subject and could you consider giving a talk on this particular subject? I dont think it was a mistake to buy the Daily Journal when we did, paying the price we did. Costco I do think has one thing that Amazon does not. WebShareholder Letter Q2 2022 AUGUST 9, 2022. That turned out to be a wonderful idea and thats one of the reasons we made all this money. Question: What is the biggest lie currently being perpetuated by the investment complex? The stock appreciated probably way more than intrinsic value. See our Terms, Privacy Policy, and Disclaimer. Has the quality of the publication suffered as the employment levels have decreased? Gerry, can you ever remember Rick down? Question: Do you believe global warming is an existential threat to humankind? But you know, most people dont do that. Copyright 2023 Surperformance. And I dont know whether hes right or not. The death tax in China is zero. Question: Do you think value investing is still relevant in a GDP-decreasing world? You have said that the single best way is to deserve a good spouse because a good spouse is by definition not nuts. What are the psychological implications of this type of market behavior? DJCO | Daily Journal Corp. Financial Statements - WSJ Rick was always humorous. And he made a very favorable impression. Mr. Buffett gives a quick update on his investing lieutenants, Todd Combs and Ted Weschler, noting that they each now manage more than $10 billion of Berkshire's money. Question: What advice would you give to someone who is trying to stay within their circle of competence but finding that the pace of technical technological innovation is rapidly reducing that circle? xZF}W3y%Y{mZ#fHSMR-Er``F(VuSE()|"MT/+AIE"WUVm &IN/ qD2OM~-e.kvwySQ;&m.rOqK[z=7r|>*a[9ATrv92==I>6n2- ` #? Dimon, the banks chairman and CEO, laid out all of this and more in his annual letter to shareholders, released early Wednesday. Put me down as skeptical. djco20221227_def14a.htm Always intelligent. Question: In recent years, Berkshire Hathaway has provided much greater insight into the companys succession thoughts and has made available at the annual meeting the companys leading managers that will steer Berkshires future. Bookings in June 2022 totaled $217 million, up 8% (approximately 12% adjusted for the recent strengthening of the dollar against certain currencies) over Its hard to run a bank intelligently. Daily Journal 13F filings and top holdings and stakes - stockzoa But Henry was a genius. On balance, we hold in certain of these position when, normally, we wouldnt buy a new position. I think theyre probably right, by the way. % 3 0 obj Take Gerry. And I was like Rip Van Winkle; when I tried to come back to it, I found that the world had changed. Opportunities to invest in underpriced stocks (banks in 2009, in particular, I believe) Nothing is very Its just that the investment banking profession will sell shit as long as shit can be sold. 2021 It reminds me of the key phrase and Bunyans Pilgrims Progress in which he says: My sword I leave to him who can wear it. In the past few years, equity prices have increased significantly and cash has arguably become riskier due to central banking policy. FOURTH QUARTER 2021 FINANCIAL RESULTS AND SHAREHOLDER LETTER We generated $97 million of free cash flow in the quarter and $477 million for the year, inclusive of a $191 million increase in inventory of which approximately $60 million is due to increased transit times and the balance targeted to alleviate our unshipped Charlie Munger: Well, its natural for people to think their own civilization and their own nation are better than everybody else. That way, whatever happens, he feels smart. Yahoo Finance to stream Daily Journal annual meeting featuring And when the old CEO of the Daily Journal died, Gerry was managing the business affairs of the Munger Tolles law firm. I think you can count on the fact that if we really like the company and we like the managementand that is the way we feel about BYDwere likely to be a little too loyal. Both Berkshire and Li Lu own BYD Company which you spoke highly of in the past. Source: Kantar Media. We have different tax considerations. All rights reserved. Thats very, very important. That was not a startup, but it was so small and thinly traded that we were buying into a venture capital type investment but in the public market. What could investors do to cope better with periodical frenzy? And some bankers yield to the temptations. We expect many of our employees to always be at client court offices because we work with them very closely to make sure they get what they need. Theyve got a better reputation for providing value than practically anybody, including Amazon. A lot of things are going to change. People really trust Costco will be delivering enormous value. You dont need to worry about them. No, I dont think I have anything to contribute. Question: [The questioner] quotes a commencement address you gave in 2007 at USC Law School. They wouldnt be a lot happier if they were richer or a lot less happy if theyd been poor. And he said; I cant decide the order of presidency between a flee and a louse. And thats not a sure thing either. Sources: CoinDesk (Bitcoin), Kraken (all other cryptocurrencies), Calendars and Economy: 'Actual' numbers are added to the table after economic reports are released. And, I was not surprised when it blew up. Bill Gates has written a book on this subject recently in which he concludes that it would be expensive but it could be handled. We all live with that problem. Charlie Munger: Well, I think all stocks can fluctuate. Question: Can you share some parting thoughts with the viewers who are watching all around the world? As a matter of fact, what happens is to make a nation rich, you need a free market system. It was totally required. h`DU6,]Z a]T&LPuwIXX>4cGy82 No one knows for sure just how much government intervention is wise and at what point the government should stop intervening. WebIn 2021, we continued adding new restaurants to our Marketplace and third-party data suggests we remain the selection leader in the U.S. When you look at whats happened in California [in terms of] the price of real estate and rentals, weve reduced the number of offices we have both for Journal Technology and for the Daily Journal. In 2020 and 2021, enormous QE approximately $4.4 trillion, or 18%, of 2021 gross domestic product (GDP) and enormous fiscal stimulus (which And we cant go to many offices because theyre closed. And, of course, its all worked. And even if you have a natural gift, you cant be good at it unless you start playing at a very young age and get huge experience. Charlie Munger: Well, I dont know how well the economys doing to work in the future. Its too volatile to serve well as a medium of exchange. You are on record as a zealous fan of the Chinese work ethic and Confucian value system. Question: Previously, you have said; It takes character to sit with all that cash and do nothing. Any copying, republication or redistribution of Lipper content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Lipper. Question: How do you control your investments in a world where reasonable companies with a good image like General Electric sink rapidly into the bottomland of the stock market. That was a big error in judgment. And, I was always aware of that and so Ive accepted these damned annual meetings. Question: Of the various types of moats and competitive advantages, which types do you think will be most important in the years ahead, and what combinations of competitive advantages can you imagine will create any new types of moats? The bad news is its not clear whos gonna win all the business or how much money is going to be made. You can imagine its in a wonderful position and that excited the people in China which has its share of crazy speculators. Were all pretty forgiving of ourselves too which is probably a good thing. shareholder letters Of course, thats a useful thing. Charlie Munger: 2022 Daily Journal Annual Meeting Transcript Its a funny way to make money. Munger's terse letter to Daily Journal shareholders. Do you agree that there is a close parallel to the late 90s and that this, therefore, must end badly?.
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