GuruFocus Premium Membership

Serving Intelligent Investors since 2004. Only 96 cents a day.

Free Trial

Free 7-day Trial
All Articles and Columns »

Charlie Munger's Portfolio

Holly LaFon

Holly LaFon

255 followers

Charlie Munger (Trades, Portfolio), Warren Buffett (Trades, Portfolio)’s trusted partner at Berkshire Hathaway (BRK.A)(BRK.B) and endless well of investing wisdom, also manages a small portfolio for and sits on the board of a small company called Daily Journal Corp. (DJCO). The company publishes a daily paper, a monthly booklet and provides online resources for attorneys and legal professionals in California and Arizona, for an annual fee.

Munger is known for influencing his friend Buffett away from investing in degenerating “cigar-butt” companies and toward long-term investments in high-quality companies. In 2009, he began investing some of the Daily Journal’s funds into common stocks of companies hard hit by the financial crisis. In the few years since, the stocks have advanced and Daily Journal’s stock price has almost quadrupled.

Many signs indicate Daily Journal itself is a high-quality company. In the past 10 years, its book value per share flourished at a 34.3% rate, and in the past five years at a 29% rate.

1392240069019.png

As of the latest quarterly filing, his Daily Journal portfolio contains just four stocks, 95.8% weighted in the financial sector and valued at $119 million. The stocks are POSCO (PKX), U.S. Bancorp (USB), Bank of America Corp. (BAC) and Wells Fargo & Co. (WFC).

Wells Fargo (WFC)

The largest holding of Munger, Wells Fargo, is also the largest holding of Berkshire Hathaway, representing 60.8% of the portfolio, with 1,591,800 shares.

In the past five years, Wells Fargo’s stock has gained approximately 140%, and trades around $45.97 a share on Tuesday.

1392154601475.png

Wells Fargo & Co. has a market cap of $242.15 billion; its shares were traded with a P/E ratio of 12.0 and P/S ratio of 2.90. The dividend yield of Wells Fargo & Co. stocks is 2.60%. Wells Fargo & Co. had an annual average earnings growth of 3.70% over the past 10 years.

Bank of America Corp. (BAC)

Munger also holds 2.3 million shares of Bank of America Corp., accounting for 30.2% of the portfolio.

Bank of America’s share price over the past five years has surged by about 175%, to trade around $16.88 on Tuesday.

1392155277363.png

Bank of America Corporation, through its banking and various non-banking subsidiaries throughout the U.S. and in selected international markets provides a diversified range of banking and non-banking financial services and products through five business segments: Deposits, Card Services, Consumer Real Estate Services, Global Commercial Banking, Global Banking & Markets, Global Wealth & Investment Management.

Bank of America Corporation has a market cap of $180.04 billion; its shares were traded with a P/E ratio of 25.60 and P/S ratio of 2.20. The dividend yield of Bank of America Corporation stocks is 0.20%.

U.S. Bancorp (USB)

Munger holds 140,000 shares of U.S. Bancorp, which represents 4.8% of the Daily Journal portfolio. The company is also the eight largest portfolio position for Berkshire Hathaway.

In five years, U.S. Bancorp’s price appreciated 149%, to Monday’s $40.29 per share.

1392155465605.png

U.S. Bancorp was incorporated in Delaware in 1929. It is a multi-state financial services holding company headquartered in Minneapolis, Minn. U.S. Bancorp has a market cap of $73.58 billion; its shares were traded with a P/E ratio of 13.70 and P/S ratio of 3.80. The dividend yield of U.S. Bancorp stocks is 2.20%. U.S. Bancorp had an annual average earnings growth of 1.20% over the past 10 years.

POSCO (PKX)

The only non-financial and non-U.S. stock in the Daily Journal portfolio, Munger owns 64,600 shares of POSCO, worth 4.2% of the portfolio.

Over the past five years, POSCO’s stock lost 9%, trading around $68.01 per share on Tuesday – near a five-year low.

1392156303633.png

Korea-based POSCO is a steel company with a $21.16 billion market cap. It has experienced 11.6% annual five-year EBITDA growth and 15.2% five-year revenue growth. Its P/B has fallen to near a 10-year low at 0.53, and P/S ratio to near a two-year low at 0.36. Its P/E is 14.2, and it carries a dividend yield of 2.5%.

See Charlie Munger’s Daily Journal portfolio here. Not a Premium Member of GuruFocus? Try it free for 7 days here!


Rating: 4.9/5 (21 votes)

Comments

snowballbuilder
Snowballbuilder - 6 months ago
really appreciate the article and CHAPEAU for Charlie's portfolio

i think he's the greatest stockpicker alive

rational , focused and brave

only 5 stock and 1 bond

cost 48 mln , market value 150 mln (3x)

and he was all cash until the great crash of 2008

just amazing... chapeau mr munger

"Experience tends to confirm a long-held notion that being prepared, on a few occasions in a lifetime, to act promptly in scale, in doing some simple and logical thing, will often dramatically improve the financial results of that lifetime. A few major opportunities, clearly recognizable as such, will usually come to one who continuously searches and waits, with a curious mind that loves diagnosis involving multiple variables. And then all that is required is a willingness to bet heavily when the odds are extremely favorable, using resources available as a result of prudence and patience in the past." — Charlie Munger (Trades, Portfolio)

mocheng
Mocheng premium member - 6 months ago

Snowballbuilder - how do you know he is all cash until the great crash of 2008?

Are you saying Charlie can predict the market?

snowballbuilder
Snowballbuilder - 5 months ago

http://quote.morningstar.com/stock-filing/Quarterly-Report/2008/12/31/t.aspx?t=XNAS:DJCO&ft=10-Q&d=f5fd594c13dcc1fa

you can watch the 2008.12.31 quartely report and see they had only cash (2.5m) and US T bill (19.5 m) . no equityinvestment/marketable securities .

i m not saying charlie try/want/can predict the market . i m just saying he is so rational and patient that can build up cash and wait for very long time until found some "BIG FAT PITCH" usually when the "blood and fear is on the street" .

that is what i think. best wishes to your investment. take care. snowballbuilder.

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Email Hide