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Charlie Munger’s Daily Journal scored a $106 million portfolio gain in a year — and has easily tripled its money on paper

Charlie Munger.

AP Images / Nati Harnik

  • Charlie Munger’s Daily Journal posted a $106 million investment gain for the year to September 30.
  • The newspaper publisher’s holdings jumped in value by 94% to $348 million.
  • Munger’s gains were tempered by a sharp decline in Alibaba stock, which he bought in early 2021.

Charlie Munger’s Daily Journal notched a $106 million gain on its investments for the year to September 30, even though its Alibaba bet plunged in value.

Munger, who turns 98 on January 1, is best known as Warren Buffett’s business partner and the vice-chairman of Berkshire Hathaway. He’s also served as Daily Journal’s chairman since 1977, and manages the newspaper publisher and software supplier’s investment portfolio.

The billionaire investor’s wagers paid off in the 12 months to September 30, Daily Journal’s annual report revealed this month. The publisher’s portfolio, which has a cost base of $103 million, soared in value by 94% to $348 million. The outperformance lifted its total unrealized gains by 77% to $244 million.

Munger benefited from sharp increases in the stock prices of Bank of America, Wells Fargo, and US Bancorp — three of Daily Journal’s largest holdings at the end of September. He has made only one addition to the highly concentrated portfolio since at least 2013, which was splurging $40 million on American Depositary Shares (ADS) of Alibaba in early 2021.

He doubled down in the quarter ended September 30, plowing another $25 million into the Chinese e-commerce group. However, Alibaba stock has slumped by more than 50% this year in response to China’s crackdown on technology companies, slashing the value of Munger’s enlarged stake to about $34 million today.

Daily Journal also cut its total number of positions from nine to seven last quarter, pocketing $45 million in pre-tax proceeds. The company noted that one of its biggest holdings is the stock of a foreign manufacturer, and highlighted that one of its bets is denominated in Hong Kong dollars, supporting the idea that it holds a stake in BYD — the Berkshire-backed, Chinese electric-vehicle maker that Munger has long admired.

The publisher’s revenues slid 1% to $49 million in the year to September 30, as higher advertising sales were offset by lower circulation revenues, consulting fees, and licensing and maintenance fees. Still, lower costs meant the company reported an operating profit of $2.2 million, compared to an operating loss of $1.3 million in the year to September 2020.

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