Obviously, everyone pays attention to Berkshire Hathaway’s quarterly filings to see what Warren Buffett is buying, in general and especially in response to the coronavirus pandemic. When Warren Buffett buys stock, he has to deal with the immediate media scrutiny (and often obtains a special SEC exemption to refrain from disclosing the purchase of certain stocks in his quarterly filings to discourage copycats while he is still accumulating various positions).
What is interesting is that the media pays far less attention to Charlie Munger’s investment moves, which are disclosed when he deploys the cash available in the publicly traded Daily Journal Corporation (DJCO) as well as the Alfred Munger Foundation (named after his father), where he allocates the capital.
Many of you saw the news over the weekend where Charlie Munger provided an interview with the Wall Street Journal where he said “The Phone Is Not Ringing Off The Hook” and he regards the present market conditions as a time for “caution” rather than “action.” He went on to add that he intends for Berkshire to survive rather than make aggressive purchases during the current environment.
Of course, neither Bufffett nor Munger have ever advertised any investment move prior to doing so, and also, it would come across as unseemly for Munger to talk about picking up stock-market deals amid so much suffering and death accompanying the coronavirus.
But on April 20, 2020, the Daily Journal Corporation filed its 13F-HR report regarding its investment holdings. In the information table, it is indicated that Munger is still holding the same four holdings that Daily Journal has held for the past decade: $48 million worth of Bank of America stock, $45 million worth of Wells Fargo stock, $5 million worth of U.S. Bancorp stock, and $331,000 worth of Posco stock.
The Bank of America stock was picked up during the financial crisis (2010 and 2011 specifically), as was the U.S. Bancorp and Wells Fargo stock. Although I would note that Daily Journal owned both U.S. Bancorp and Wells Fargo prior to the last financial crisis as well. According to the last 10-Q, Munger is sitting on $10 million in cash at the Daily Journal, though I doubt he would invest more than $5 million or so of it in stocks.
It is also unlikely that Munger is buying anything right now and is obtaining an exemption from the SEC regarding disclosure. Aside from some small-scale regional bank purchases that Munger made for Wesco in 1990s, he has not sought to delay the disclosure of any purchases outside of the typical SEC disclosure rules. The Wells Fargo, Bank of America, and U.S. Bancorp purchases during the financial crisis were disclosed in real time and in plain sight.
When Munger reflected on his career, he has often indicated that he “moves too quickly” when opportunities arrive. Buffett has shared similar sentiments. In addition, this is the most serious I have ever heard Munger discuss liquidity aside from the financial crisis. I see nothing in Munger’s behavior that would suggest he believes the March stock market values were the lows. This is not necessarily surprising because the S&P 500 in April 2020 is still trading at the same level that was available in March 2019. In many sectors of the stock market, the stocks are trading at levels that are indicative of “business as usual” rather than a global pandemic.