Star investor Warren Buffett’s long-time confidant and companion, Charlie Munger, died at the end of 2023 at the age of 99. These were the last investments the former Berkshire vice president made.
• Charlie Munger passed away on November 28, 2023
• 13F SEC filing reveals final investments
• Munger remained loyal to long-standing investments
Charlie Munger gained great fame as a long-time confidant of Warren Buffett and deputy head of the well-known investment holding company Berkshire Hathaway. He shied away from the limelight and mostly left it to his business partner Buffett to communicate the joint investment strategy of value investing to the outside world.
Value investing is an investment strategy that searches the market for undervalued companies with a competitive advantage over rivals, often referred to as a “moat,” that are likely to increase in value over the long term. As a rule, shares in the companies in question are purchased and then held for a long period of time. Warren Buffett is considered the ultimate representative of value investing; Munger actually played a significant role in shaping this style.
Long-term investments remain
A look at the portfolio of his own newspaper publisher and tech company Daily Journal Corp., which has been listed on the stock exchange since 1987, shows that Munger remained true to this approach throughout his life. Since Munger’s portfolio significantly exceeds the value of 100 million US dollars, he, like all other institutional investors, was obliged to provide quarterly information about the investments he held. The first filings to the US Securities and Exchange Commission (SEC) were made in the fourth quarter of 2013, probably because the value of the investments exceeded the limit described for the first time. The information for the fourth quarter of 2023 was provided on January 17, 2024, so these are the last investments that Charlie Munger made in his life.
Major US banks have been there from the start
As the portfolio overview reveals, Munger remained true to the strategy of long-term value investing until the end of his life. The four positions of the manageable portfolio recently remained unchanged. Measured by the value of the investment in fourth place in the Daily Journal portfolio, as of the reporting date there were shares in the US financial institution US Bancorp worth 6.059 million US dollars. 140,000 shares were held, which accounted for 3.27 percent of the overall portfolio. The investment in the financial house already existed in the fourth quarter of 2013. It has not been changed since then.
The same applies to two other positions in the Munger portfolio, which also represent investments in major US banks. The Buffett confidant has held his 2.3 million Bank of America shares since the fourth quarter of 2013, as well as the 1,592,800 shares in Wells Fargo. The BofA holding ranks second in the Daily Journal portfolio with an equivalent value of $77.44 million and a 42.84 percent share of the total portfolio. First place goes to Wells Fargo shares, which were worth 78.35 million as of the reporting date and accounted for 42.33 percent of the entire portfolio.
Munger’s Worst Trade: Alibaba Stock
In the first quarter of 2021, Munger also began betting on Amazon’s Chinese rival Alibaba – a bet that was still active until recently. At the end of 2023, Munger continued to hold 300,000 Alibaba shares with an equivalent value of 23.25 million US dollars. They made up 12.56 percent of the total portfolio. Nevertheless, participation was – by Munger’s standards – characterized by great volatility.
The Buffett confidant quadrupled his investment in Alibaba by the end of 2021, only to halve his stake again a quarter later. In his last TV interview, which Munger gave to the US broadcaster CNBC, the star investor openly admitted that he had made a mistake with Alibaba: “My worst trade was acquiring a block of Alibaba for the Munger family, even if it was quite a deal is a good company. But I think it was hyped too much and Jack Ma made some mistakes dealing with the Chinese government. Everyone has some bad ones [Trades, Anmerk. d. Red.]. The best tennis player sometimes goes out on the court and has a bad day. Happened.”
POSCO holding closed after years
Another company that Munger was invested in for years, but which he divested of in the fourth quarter of 2022, should be mentioned. We are talking about the steel producer POSCO, which was also invested in for the first time in the fourth quarter of 2013. There was an adjustment just a year later when the star investor decided to reduce his previous holding of 64,000 shares to just 9,745 shares.
Future of Munger Depot uncertain
It will now be interesting to see how Daily Journal Corp.’s portfolio develops. changed in the future. The newspaper publisher warned in its annual report to the SEC that it would be impossible to replace Munger and that the portfolio’s financial performance could suffer in his absence: “While the Board will work to ensure that the portfolio continues to be well managed, it is “It is impossible to replace Mr. Munger. Given the loss of Mr. Munger, the Company does not expect the future financial performance of the securities portfolio to match past performance.” According to the last published 13F filing for the fourth quarter of 2014 with the SEC, the value of the portfolio was $185.1 million.
Editorial team finanzen.net
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