Guest hellsten Posted August 11, 2012 Share Posted August 11, 2012 Latest 10Q is out: http://www.sec.gov/Archives/edgar/data/783412/000143774912008166/djc_10q-063012.htm In February 2009, the Company purchased shares of common stock of two Fortune 200 companies and certain bonds of a third, and during the second and the third quarters of fiscal 2011, the Company bought shares of common stock of two foreign manufacturing companies. During the first quarter of fiscal 2012, the Company bought shares of common stock of another Fortune 200 company. During the third quarter of fiscal 2012, the Company purchased additional shares of common stock of one of the foreign manufacturing companies in which it had previously invested. The investments in marketable securities, which cost approximately $45,121,000 and had a market value of about $94,831,000 at June 30, 2012, generated approximately $1,451,000 in dividends and interest income during the nine months ended June 30, 2012, which lowers the effective income tax rate because of the dividends received deduction. As of June 30, 2012, there were unrealized pretax gains of $49,710,000 as compared to $24,532,000 at September 30, 2011. Most of the unrealized gains were in the common stocks. … As noted above, however, the investments are concentrated in just six companies. Link to comment Share on other sites More sharing options...
Palantir Posted September 14, 2012 Share Posted September 14, 2012 Anyone else long DJCO? I went in at 85, I feel the firm is undervalued on an basis of investment portfolio + business. On top of that significant capital appreciation to be expected in portfolio. Link to comment Share on other sites More sharing options...
Palantir Posted November 1, 2012 Share Posted November 1, 2012 Damn, this thing bounced 13% today. I'm on fire bitchez!!!!!!!!!!!!......I mean, I don't care about short term movements, I'm focused on the long term... Link to comment Share on other sites More sharing options...
Guest hellsten Posted December 15, 2012 Share Posted December 15, 2012 Latest 10-K: During fiscal 2012, the Company's cash and cash equivalents, U.S. Treasury Bills and marketable security positions increased by $31,667,000. Cash and cash equivalents and U.S. Treasury Bills were used primarily for the purchase of marketable securities of $20,961,000 and capital assets of $372,000 (mostly computer software and office equipment). In February 2009, the Company purchased shares of common stock of two Fortune 200 companies and certain bonds of a third, and during the second and the third quarters of fiscal 2011, the Company bought shares of common stock of two foreign manufacturing companies. During the first quarter of fiscal 2012, the Company bought shares of common stock of another Fortune 200 company. During the third and the fourth quarters of fiscal 2012, the Company purchased additional shares of common stock of one of the foreign manufacturing companies in which it had previously invested. The investments in marketable securities, which cost approximately $49,692,000 and had a market value of about $102,156,000 at September 30, 2012, generated approximately $1,967,000 in dividends and interest income, which lowers the effective income tax rate because of the dividends received deduction. As of September 30, 2012, there were unrealized pretax gains of $52,464,000 as compared to $24,532,000 at September 30, 2011. Most of the unrealized gains were in the common stocks. During the first quarter of fiscal 2013, the Company borrowed $14 million to purchase all of the outstanding stock of New Dawn and pledged its marketable securities to obtain favorable financing. Did Munger buy BYD? My guess would be yes. Link to comment Share on other sites More sharing options...
Palantir Posted December 19, 2012 Share Posted December 19, 2012 Anyone else owning this? I bought this simply as an asset play, figured 100M+ portfolio plus 6M+ in cash flow year after year made it a good value at 115M....but Mr Market has not come around to agreeing with me. Might wait a few more mos to see what happens. Link to comment Share on other sites More sharing options...
MrB Posted December 19, 2012 Share Posted December 19, 2012 Anyone else owning this? I bought this simply as an asset play, figured 100M+ portfolio plus 6M+ in cash flow year after year made it a good value at 115M....but Mr Market has not come around to agreeing with me. Might wait a few more mos to see what happens. Let me ask you a question. a. How much would you pay for a $100 bill plus $6 annual cash flows? b. Based on your answer in a., what is your expected return on that investment? Link to comment Share on other sites More sharing options...
Palantir Posted December 19, 2012 Share Posted December 19, 2012 I would pay no more than 160M....I agree it is undervalued.....I don't want it to stay undervalued. :'( ^This buy and hold thing is painful. Link to comment Share on other sites More sharing options...
MrB Posted December 19, 2012 Share Posted December 19, 2012 I would pay no more than 160M....I agree it is undervalued.....I don't want it to stay undervalued. :'( ^This buy and hold thing is painful. What kind of returns do you expect to generate over a five year period if you pay $160? Link to comment Share on other sites More sharing options...
Palantir Posted December 19, 2012 Share Posted December 19, 2012 Roughly slightly less than 10%. That's the max I would pay btw, I paid actually 115M, so basically I was paying 10M (115Mcap-105M Portfolio) for 6M-ish in FCFE. Link to comment Share on other sites More sharing options...
MrB Posted December 19, 2012 Share Posted December 19, 2012 Roughly slightly less than 10%. That's the max I would pay btw, I paid actually 115M, so basically I was paying 10M (115Mcap-105M Portfolio) for 6M-ish in FCFE. The way I would view it is slightly different. Capitalizing $6 at 10% assumes DJCO will earn $6 for 100 years, which is a high bar for a company with financials' which suggest it is going the other way. I would apply a much higher rate. Not lower than 15%. I would give the $100 a haircut too. That would mean I end up with an intrinsic value of $125 ($90 + $35) at the most. Then I still need to get a margin of safety of at least 10%, so let's say $110. I don't dispute the value of $160, but I don't believe it has the required returns and margin of safety baked in, thereby implying that it is not a investment proposition at that price. Price is what you pay and value is what you get with rate of return covering the ground in between. Just a different view on what it is worth. Link to comment Share on other sites More sharing options...
txlaw Posted December 19, 2012 Share Posted December 19, 2012 I own a bit of DJCO. I have watched for a while but haven't really owned up until recently because it's so small and is quite illiquid relative to everything else I own, and because of the cigar butt nature of the traditional biz. However, I like how Munger and Co are taking advantage of low interest rates to buy a case management system provider that is at worst a cigar butt and, at best, a growth platform. Moreover, I think there is residual value in the publication brands that is unlikely to be destroyed completely. Finally, I'm hoping that Mr. Munger is in some of the names I would hope he is in: WFC, BAC, BYD, etc. Really more of an homage to Munger in my own portfolio. A reminder in some sense. Link to comment Share on other sites More sharing options...
Palantir Posted December 19, 2012 Share Posted December 19, 2012 I appreciate the response, if I understood correctly, you subtract out a MoS after you estimate the intrinsic value. I always thought of MoS as something you subtract out of NAV for asset plays, but for operating firms, do you need to subtract a MoS if you already estimate conservative cash flows? I hope I am making sense here. You make a good point regarding its declining earnings. I'll instead capitalize 2M at 10% to get 20M, and add it to the 102M portfolio to get 122M. I suppose I am still under the target price....but it is much lower now. This is not counting portfolio appreciation thanks to Mr Munger. Link to comment Share on other sites More sharing options...
MrB Posted December 19, 2012 Share Posted December 19, 2012 I appreciate the response, if I understood correctly, you subtract out a MoS after you estimate the intrinsic value. I always thought of MoS as something you subtract out of NAV for asset plays, but for operating firms, do you need to subtract a MoS if you already estimate conservative cash flows? I hope I am making sense here. You make a good point regarding its declining earnings. I'll instead capitalize 2M at 10% to get 20M, and add it to the 102M portfolio to get 122M. I suppose I am still under the target price....but it is much lower now. This is not counting portfolio appreciation thanks to Mr Munger. I don't think there is a right or a wrong way, but I think it is very important to separate the two concepts. Intrinsic value is discounted cash flows and margin of safety is "excess margin" on top of the intrinsic value. Having said that, is there a difference between investor a. discounting at 20% and another discounting at 10% and requiring a 10% MOS on top of that? I think the danger is not properly thinking through how you discount, whether you are getting MOS at a certain price and whether the combination gets you to your required return. Applying that to DJCO then when paying x expecting y returns might imply Mr Munger needs to compound the portfolio at 15% where he might only have compounded by 16% historically. However paying x-10% expecting y might imply he has to compound at only 5% versus a historical 16%. So your MOS/certainty of hitting y increases significantly. Another example; discounting a $10 cash stream at 10% leaves you no MOS if you want a 10% return as would paying $91 for a $100 asset. Link to comment Share on other sites More sharing options...
Palantir Posted December 19, 2012 Share Posted December 19, 2012 I appreciate the response, definitely a lot to think about. I may exit this opportunity as it doesn't look nearly as attractive on second thought. Link to comment Share on other sites More sharing options...
MrB Posted December 19, 2012 Share Posted December 19, 2012 I appreciate the response, definitely a lot to think about. I may exit this opportunity as it doesn't look nearly as attractive on second thought. I am not suggesting you should to that...just that one must think it through properly. Link to comment Share on other sites More sharing options...
PlanMaestro Posted February 6, 2013 Share Posted February 6, 2013 @alexrubalcava is tweeting the annual meeting with Munger. Looks like he is shredding the management of General Motors pre-bankruptcy. Link to comment Share on other sites More sharing options...
berkshiremystery Posted February 24, 2013 Share Posted February 24, 2013 the investment portfolio of the DJCO continues to grow in the 4th qtr.,... currently at $114m AUM the 10-Q is published... http://www.sec.gov/cgi-bin/browse-edgar?company=Daily+journal+&match=contains&action=getcompany ------ I might add some interesting NAV table from GuruFocus.com, comparing DJCO vs BRK, FFH & Chou Funds http://s18.postimage.org/dakysx561/image.jpg Source: ---> http://www.gurufocus.com/news/158972/yesterday-is-history-tomorrow-a-mystery-now-djco-is-a-present Link to comment Share on other sites More sharing options...
Parsad Posted February 24, 2013 Share Posted February 24, 2013 Incredible! And DJCO uses little to no leverage or float. Just big swings at the right pitches. Cheers! Link to comment Share on other sites More sharing options...
SouthernYankee Posted April 2, 2013 Share Posted April 2, 2013 Are there any lawyers on here who use the case management software owned by the Daily Journal? Link to comment Share on other sites More sharing options...
Guest ajc Posted July 23, 2013 Share Posted July 23, 2013 Twenty-seven pages of detailed notes from the DJCO 2013 Annual Meeting. Thanks to ValueWalk for originally having posted these. http://www.scribd.com/doc/126780797/Daily-Journal-Meeting-Detailed-Notes-From-Charlie-Munger Link to comment Share on other sites More sharing options...
Guest ajc Posted July 23, 2013 Share Posted July 23, 2013 Also, I know that berkshiremystery referenced this January piece on the previous page under that NAV growth image but I think it's worth a stand-alone post so I'm just going to take this opportunity to re-register it here: http://www.gurufocus.com/news/158972/yesterday-is-history-tomorrow-a-mystery-now-djco-is-a-present Link to comment Share on other sites More sharing options...
fareastwarriors Posted July 24, 2013 Share Posted July 24, 2013 Are you guys concerned with succession for this company at all? We talk about Buffett's age and succession issues but he is 82. Munger is a lot older at 89. Link to comment Share on other sites More sharing options...
cubsfan Posted July 24, 2013 Share Posted July 24, 2013 Charlie is the Chairman of the Board, not the CEO. The others have been with the company a long time, and probably have learned plenty. Maybe the investment pool won't do as well, but operations are in capable hands. Link to comment Share on other sites More sharing options...
blainehodder Posted July 24, 2013 Share Posted July 24, 2013 Are you guys concerned with succession for this company at all? We talk about Buffett's age and succession issues but he is 82. Munger is a lot older at 89. It wouldn't surprise me if this gets absorbed into BRK when Munger is gone. Buffett has been buying up small cheap newspapers... Why not grab this as well? The holdings are all Buffett holdings anyhow, or at least Buffett approved. The investments could be spun off and distributed or thrown in the BRK pile. Link to comment Share on other sites More sharing options...
brker_guy Posted July 24, 2013 Share Posted July 24, 2013 You guys helped bring attention to Charlie's investment acumen. There is an article on him today on Bloomberg: http://www.bloomberg.com/news/2013-07-24/munger-triples-publisher-s-value-with-panic-era-wager-on-stocks.html Link to comment Share on other sites More sharing options...
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