Wednesday, September 17, 2014

Daily Journal 2014 Meeting Notes

I have 43 pages of detailed notes from the Daily Journal Corporation Annual Meeting (held September 10th, 2014) and led by Chairman Charlie Munger. 

While not a transcript of the event, it's the closest thing you're going to find. 

A copy of these notes are available for a limited time for $32 (Canadian. ~$30 American).

Here are the things you should know before you purchase a copy of the notes:
  • There are freely available notes from the meeting floating around online. These are not nearly as detailed as mine, but they might suit your needs just fine.
  • I charge for the notes to cover my travel costs to attend the event.
  • There are about 17,000 words, which is more than my 2013 notes
  • By purchasing a copy you agree not to post it on the web or share it with friends. To this end, each copy is personally watermarked in 3 different ways. I hate doing this but last year's notes were posted online. 
  • Student pricing: $9.99. Email me a scanned copy of your valid student ID and I'll tell you what to do next.
  • I will send you an email within 24-72 hours of your purchase with a PDF of the notes.
  • These notes are intended solely for the entertainment of the reader and the author. These are a best-effort to capture the actual meeting but should not be relied upon for making any decisions. In other words they may not be 100% accurate and they are provided "as-is" without express or implied warranties of any kind. 

DJCO Notes

Still curious? Try

Tuesday, June 18, 2013

Letters from Warren Buffett on Walter Schloss

Find two letters, in a single document, from Warren Buffett to “the Hilton Head Group” and “the Lantana Group”, respectively, about Walter Schloss.
The first letter is from 1976 and the second from 1994.
Still Curious? Here are some other things to read:
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Monday, May 20, 2013

Khrom Capital. Markel Notes. Office hours with Buffett, Loeb's Letter to Sony, and more!

Things you need to know.

If you're short on time, start with these.
Got a little more time? Good. Check out these goodies. 
All of this content was made available to subscribers of Mungerisms, my newsletter, last week. If you want, you can sign up for free here:
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Tuesday, May 14, 2013

Some new thoughts from Charlie Munger

I'm a huge fan of Charlie Munger.  

So when I come across some new bit of his thinking that I hadn't seen before, I gobble it up.

While researching a post for Farnam Street, I uncovered Michael Eisner's book, Working Together: Why Great Partnerships Succeed.

The book has a pretty interesting chapter on the Buffett/Munger partnership and some stuff that I'd never seen before.

Munger hated the entertainment business. 
Meanwhile, Berkshire Hathaway was the controlling shareholder in Cap Cities, and in that we made half of the deal with Disney stock, I realized quickly Berkshire would become one of our largest shareholders. That was great news for our company, but I knew Charlie hated the entertainment business. I had heard many times in conversations with him over the years in Los Angeles how he hated “the waste,” “the lack of stable management,” “the insane fees paid to talent,” and a business run by “one’s gut rather than one’s mind.”
Munger on Rails
In my conversation with Warren, he told me about one time when he called up Charlie with an idea, saying they should buy stock in the Pittsburgh and West Virginia Railway. The response was less than enthusiastic. "Well, I don't like railroads," Charlie started. "I don't like businesses with a lot of labor content. I particularly don't like when they're unionized. I don't like capital-intense businesses. I particularly don't like eastern railroads. But if you are telling me that you've researched this thing from A to Z, that you'll follow it twenty times a week and you'll keep track of it and take full responsibility for it.then I'll just shut my eyes and say no."
Munger on playing the secondary role
“That’s one of the beauties of the partnership,” says Charlie. “I am in so many activities where I am the dominant personality. Most people do not ‘fit into’ that mode—they can only operate in that mode. Yet I am particularly willing to play the secondary role. Warren’s a more able man in doing what we’re doing, so it’s the appropriate response. There are some times you should be first, some times you should be second, and some times you should be third.”
Munger on BYD
“Charlie thinks exactly like I do,” says Warren, “but he puts things through a tougher filter than I do. There are only two things he’s ever liked better than I liked that we’ve done. One was the tool company Iscar. I loved it—but when Charlie falls in love with something, forget about it. Also, there’s a deal with a Chinese car company, BYD, we did recently. I wasn’t so sure about it. Charlie tells me the Chinese guy running the company, Wang Chuanfu, is the Henry Ford of China. I’m still not jumping. Then he says he’s the Thomas Edison of China. Still no. Then, the Bill Gates of China. Nope. Then, his trump card. He’s the Warren Buffett of China!”
Improving himself
“I have always wanted to improve what I do, even if it reduces my income in any given year. And I always set aside time so I can play my own self-amusement and improvement game.”
Classic Munger
Several years ago, Charlie Munger was testifying at an arbitration hearing, and getting grilled about a recent board meeting. He claimed he didn’t recall what the lawyer was asking him about. “Mr. Munger,” the lawyer said, “you are reputed to have a very good memory. Are you really telling me you don’t remember it?” “Well,” Charlie is said t have responded, “I only listen when I’m the one talking.”

Tuesday, May 7, 2013

Why did Mohnish Pabrai recommend The Shipping Man?

It’s worth paying attention when a popular value investor such as Mohnish Pabrai recommends you read a fiction novel.

And that’s just what he did.

The Shipping Man is about, well, you guessed it: shipping.
And what’s interesting is that Mohnish has a history of successfully investing in shipping, having profitably invested in Genco Shipping and Frontline. So he knows the industry fairly well.

It starts off as my kind of book.
“The Greek laughed. “There are only three ways to get an advantage over your competitors in this business.

“What are they?” Robert asked.

Pay less for your ships, pay less to operate them or pay less for your capital. In a commodity business like shiping, the only thing that really matters is price.
It’s not often you find investing wisdom in a fiction book.

The basic premise of the novel is pretty simple. Robert Fairchild watches the Baltic Dry Index plunge 97%, registering an all time high and 25-year low within the span of 6 months. He gets excited. He gets drunk and ends up buying a ship and receiving an education.

The book is full of interersting nuggets. Let's look at a few, shall we.

Consider this one on information:
“... another problem is that everyone has the same information, which means there is no hidden value; there is only the market. If the market goes up, you win. If the market goes down, you lose. and the moment you think there is no risk, that is the same moment you have failed to recgonize the risk. At least the market doesn’t lie.“
Or this one on expertise:
“Robert Fairchild knew full well that he wasn’t an expert on shipping, but expertise, like everything in life, was relative. At that moment, all he needed was to know a little bit more about bunkers than John Harris and the other investors funneling out of the New York Yacht Club — which he did.”
And this advice: Never sell when things are bad.
“You know something, Robert, you should never sell when things are bad. You should only sell when things are good. This is what I tried to explain to Alex. When you want to cry really you should buy,” Coco said with his characteristically elegant simplicity. “When it comes to shipping, investors only lose money when they lose patience.”
Let’s end with this philosophical snippet:
“There will always be many good reasons not to do things in life, but people who achieve the great things are the ones who believe in themselves and find reasons to do things even when sometimes they do things that are not so smart.”
While I feel like I know a lot more about shipping after reading The Shipping Man, this is where my shipping education starts and not where it ends.

And no, I won't be buying a ship anytime soon.

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