Legendary investor and polymath Charlie Munger, Berkshire Hathaway’s vice-chairman and Warren Buffett’s long-time business partner, is speaking today at the Annual Meeting of Shareholders of the Daily Journal Corporation (DJCO) in Los Angeles.
The event is being live-streamed exclusively on Yahoo Finance from 1 p.m. ET/ 10 a.m. PT until 3 p.m. ET/ 12 noon PT, available on the site’s homepage and in the video above.
“We won’t be able to join each other in person this year, but I hope that many shareholders will join our annual meeting online. In the meeting, Jerry [Salzman] and I, as usual, will answer many questions,” Munger wrote in a letter to shareholders last month.
While Buffett is the more public and recognizable face of Berkshire Hathaway (BRK-B, BRK-A), the iconic conglomerate was built on Munger’s blueprint of moving beyond the so-called “cigar-butt” investing to “buying wonderful businesses at fair prices.”
Thousands usually make the pilgrimage to Omaha, Nebraska, to listen to Buffett and Munger during Berkshire Hathaway’s annual meeting. Still, Munger’s devoted followers— affectionately nicknamed by him as “groupies” — travel to Los Angeles for the Daily Journal annual meeting, where he holds court as chairman. Like most in-person events, this year’s meeting is only being held virtually.
Shareholders and value investing enthusiasts also used to make the trip for Pasadena, Calif.-based Wesco Financial Corp. meeting before Berkshire acquired it.
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 and engaged audience each year, including non-shareholders, to hear his wisdom and maxims about business, investing, and life. He also talks about the Daily Journal’s business.
The company publishes ten newspapers, including the Los Angeles Daily Journal and the San Francisco Daily Journal. Journal Technologies provides case management software for courts and other justice agencies. The software business accounted for 71% of its total operating revenues in fiscal 2020, up from 65% of total revenues in 2019, according to its annual report.
In the shareholder letter, Munger noted that after many years as a “cash cow,” the newspaper business broke even, posting revenue of $14.695 million, down 14% from the prior year. Meanwhile, the “much more important” software business delivered $35.247 million in revenue, up 12% from the year-ago period.
“I am very optimistic about the eventual success of the Company’s software business, but I expect this to take considerable time. In the Company’s newspaper business, my best hope is for it to turn a modest profit each year for many years to come,” Munger wrote.
As of Sept. 30, the Daily Journal Corporation held $28.96 million in cash and had a stock portfolio valued at $179.37 million. The portfolio includes investments in Bank of America (BAC), Wells Fargo (WFC), US Bancorp (USB), and Posco (PKX), according to the most recent 13-F securities filing. The portfolio of five companies includes one based in foreign currency.
“This trove of liquid wealth backs up the Company’s operating businesses,” Munger wrote. “The Company’s liquid wealth came from retained newspaper earnings, multiplied by seizing opportunities of a type no longer widely available.”
Munger added that the stock portfolio’s value reached $260 million on Dec. 31, up 45% from the end of September. He noted that “shareholders should not expect any significant appreciation above that level anytime soon.”
Shares of Daily Journal Corporation closed at $404 on Dec. 31, a price “reached amid (1) much speculative frenzy and (2) much forced buying by index funds,” Munger wrote.
Shares of Daily Journal were last trading up about 2.5% on Wednesday, near $354.99.
This post will be updated continuously with highlights from Munger’s opening remarks and shareholder Q&A.
Julia La Roche is a correspondent for Yahoo Finance. Follow her on Twitter.