Charlie Munger (right) and Warren Buffett.Scott Morgan/Reuters
Charlie Munger built a $300 million stock portfolio from scratch at a small newspaper publisher.
Daily Journal Corporation warned the investor’s death will likely weigh on its future returns.
Warren Buffett’s business partner had racked up $138 million in paper profits as of September.
Charlie Munger quietly built a $300 million stock portfolio at a little newspaper publisher, which warned its shareholders this week not to expect the same stellar returns following the legendary investor’s death in November.
“Although the Board will work to ensure that the portfolio remains well-managed, it’s impossible to ever replace Mr. Munger,” the Daily Journal Corporation said in its latest annual report. “Given the loss of Mr. Munger, the Company does not expect the future financial performance of its marketable securities portfolio to rival its past performance.”
Munger, best known as Warren Buffett’s right-hand man and the vice chairman of Berkshire Hathaway, chaired Daily Journal Corporation for about 45 years from 1977 to 2022. He made the unusual move to begin investing the publisher and legal-software provider’s excess cash into other companies’ stocks at the height of the financial crisis.
“In February 2009, the Company took advantage of near-panic selling in the stock market and redeployed some of its cash, which had been invested in Treasury securities and was generating only nominal interest, to purchase the common stock of two Fortune 200 companies and certain bonds of a third,” Daily Journal disclosed in its annual report that year.
The publisher initially deployed $20.4 million, a huge bet for a company that only earned $40 million in total revenues and $12 million in operating income that year. The wager quickly paid off; it racked up $34 million in unrealized gains by September as stocks rallied.
Daily Journal made sure to emphasize in its financial reports since then that Munger was guiding its investment decisions. It credited his “judgment and suggestions” and said he played an “important role” in…
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