Investing

The Late Billionaire Charlie Munger’s ‘Other’ Firm Has 97% of Its Investments in These 3 Stocks

Will Ashworth

Published: March 6, 2025 4:46 pm

While legendary billionaire Charlie Munger passed away 15 months ago, investors cannot forget the man. His commentary about our world was just as riveting as his financial wisdom. He was an equal in every way to Warren Buffett, his longtime partner. 

When Munger passed away on Nov. 28, 2023, the Daily Journal Corp. (NASDAQ:DJCO) published an excellent obituary by editor-in-chief David Houston. It’s a recommended read.  

When anyone considers Charlie Munger’s career, they naturally think about all of the years he and Buffett answered hours of questions from shareholders at the annual shareholders’ meeting in early May in Omaha, where Berkshire Hathaway (NYSE:BRK.B). 

Munger’s longtime chairmanship of Daily Journal, a company that went public in 1986, and grew out of Munger’s purchase of the Los Angeles Daily Journal in 1977 for $2.5 million, was an ode to the legal profession that he gave up to join Buffett in an investment partnership that lasted 45 years. 

The Daily Journal operates two businesses: its Traditional Business, which publishes legal publications, and Journal Technologies, which provides case management software to the legal industry. At the end of fiscal year 2024 (September), the two segments generated nearly $70 million in operating revenues and $4 million in operating earnings. 

However, the company’s investment portfolio is the focus of this article. At the end of 2024, Daily Journal had 97% of its $209 million investment portfolio invested in these three stocks. 

Here’s why.  

Key Points About This Article:

• The late Charlie Munger was many things. His prescient bet on three bank stocks in 2009 set the Daily Journal (NASDAQ:DJCO) up for decades to come.  
• Munger is said to have bought Wells Fargo (NYSE:WFC) stock for as little as $8 a share. 
• The billionaire didn’t make many mistakes. Alibaba (NYSE:BABA) was about the only one. 
• Sit back and let dividends do the heavy lifting for a simple, steady path to serious wealth creation over time. Grab a free copy of “2 Legendary High-Yield Dividend Stocks” now.

Daily Journal Is the Banking Industry’s Biggest Fan

Three of the four stocks in its investment portfolio are banks: Wells Fargo (NYSE:WFC), Bank of America (NYSE:BAC), and U.S. Bancorp (NYSE:USB). As of Dec. 31, they accounted for 47.4%, 42.0%, and 7.9% of its $209 million assets from its Q4 2024 13F holdings report, respectively. 

The first thing you’ll notice from WhaleWisdom.com’s 13F holdings report for the fourth quarter is that all three were first acquired in Q4 2013. That can’t be coincidental. 

However, if you look at the Daily Journal’s SEC filings, you will notice that its Q4 2013F filing was its first. A Bloomberg article from August 2013 provides an answer to why. 

The SEC investigated the company earlier in 2013, arguing that its large amount of marketable securities as a percentage of its assets made it an investment company under the Investment Company Act of 1940. Daily Journal responded to the SEC’s questions on March 18, 2013.  

Essentially, Munger convinced the board in 2009, that it should move its investments from Treasury bills, into marketable securities such as stocks, and other liquid assets. 

Remember that this was during the financial crisis, and markets crashed. Munger convinced the board that bucking traditional financial wisdom was the best way to ensure the business’s long-term survival.

“[The] board recognized that Daily Journal needed a long-term plan to protect the company from deterioration in its newspaper publishing business, provide an asset base for future takeovers and build a net worth that would allow its software unit to bid on government contracts, according to the letter,” Bloomberg’s Noah Buhayar wrote on Aug. 22, 2013. 

The company’s letter to the SEC answered all five of the agency’s factors for determining whether the primary business is investing. The SEC ruled that the Daily Journal was not and closed the matter. 

Why Those 3 Stocks?

They were incredibly cheap at the time. 

Munger is said to have purchased the Wells Fargo stock at $8 a share, ultimately spending $20 million of Daily Journal’s excess cash on several stocks including the three banks.

The marketable securities first appeared on Daily Journal’s balance sheet in Q2 2009. All $24.7 million of it invested in common stocks. By the end of fiscal 2009, its common stocks had grown to $47.9 million, or 57% of its total assets. 

Most importantly, Daily Journal shareholders’ pretax gain on those common stocks was $32.4 million, a 209% return in six months. 

Fast forward to Q4 2013, the first time it filed a 13F. 

Three of the four stocks are still held today. According to the holdings report, it had 1.59 million WFC shares valued at $72.3 million, accounting for 61% of the 13F assets of $118.8 million. At the end of 2024, it had 1.41 million shares of Wells Fargo, valued at $99.2 million, with 180,000 shares sold over 11 years. 

Talk about buy-and-hold.

It gets better. 

As of Dec. 31, 2024, the fair value of the Daily Journal’s common stocks was $372.1 million, meaning that in addition to its U.S. holdings, the company held approximately $163 million in international stocks. 

The gains on its common stocks? $233 million. It finished 2024 with its common stocks accounting for 90% of its total assets.

Sadly, since Munger’s passing, the Daily Journal has said it will move on from this minor quirk in its business, which generated significant growth in its asset base. 

“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, stated pg. 17 of its 2024 10-K. 

“Henceforth, the Company expects to manage and harvest its marketable securities portfolio primarily to support the further development of Journal Technologies and its business. The Company does not anticipate initiating new investments in public common stocks unrelated to its core businesses.”

It’s the end of an era.