Daily Journal Annual Meeting Questions

Charlie Munger will take questions during a virtual meeting on February 15

Daily Journal Corporation’s 2023 annual meeting of shareholders will take place on Wednesday, February 15 at 10:00 am Pacific Time. The meeting will not be open to an in-person audience but will be live-streamed by CNBC. Becky Quick will select from questions sent via email to DailyJournalQuestions@CNBC.com. The deadline for submitting questions is Monday, February 13 at 5:00 pm Pacific Time.

Last year, Charlie Munger stepped down as Chairman of Daily Journal but remains a Director and continues to personally manage the company’s large investment portfolio. Chairman and Interim Chief Executive Officer Steven Myhill-Jones will most likely be running the meeting on Wednesday but I suspect that Charlie Munger is still likely to attract the majority of the questions.¹

Last month, I released a report on Daily Journal which contains much information about the company’s history and business model. The report consists of a 46 page PDF file and an Excel file with data going back three decades.

Although I have never owned shares of Daily Journal, I have followed the company for a long time and decided to submit three questions for the meeting:

1. Journal Technologies is a small company in an industry where larger scale is often desirable. As Mr. Munger has said, succeeding in the software business is likely to be a “long, long slog” but he has recently characterized the future as “especially interesting”. With the backing of Daily Journal’s large portfolio of securities, Journal Technologies could attempt to grow organically through investments in research and development or by pursuing acquisitions. Assuming that management considers larger scale desirable, is there a preference between accelerating organic growth investments or seeking acquisition candidates?

2. The Los Angeles and San Francisco Daily Journals have demonstrated strong pricing power over the years, albeit with a shrinking subscriber base. Given the important role these newspapers have in the California legal system, is it accurate to believe that Daily Journal will continue operating the papers as long as they are not consuming cash? If so, would the attitude toward these newspapers be similar to the attitude Berkshire Hathaway took toward continuing to run textile mills until the mid 1980s mostly as a matter of social responsibility?

3. Berkshire Hathaway has been selling shares of BYD on a regular basis in recent months. Has anything changed in the fundamentals of the business or are the sales a matter of valuation? In either case, do the sales of BYD stock by Berkshire indicate anything regarding whether Daily Journal might also choose to reduce its holdings of BYD in the future?

I suspect that the first two questions are more likely to be selected than the question on BYD, although I would be surprised if BYD does not come up at all. Charlie Munger is not likely to comment on what Berkshire Hathaway has been doing, but perhaps he will make some general comments on BYD or the electric car industry.

Of course, the big question is whether the BYD sales at Berkshire were initiated by Warren Buffett or Charlie Munger, but directly asking that question is almost certain to not get much of a response!

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No position in Daily Journal. Long Berkshire Hathaway.

1. In recent years, the questions asked during Daily Journal meetings have been wide-ranging and relatively few topics are actually related to the company’s businesses. Latticework Investing has made transcripts of meetings for the following years available: 2016, 2017, 2018, 2019, 2020, 2021, 2022. Those who plan to watch this year’s meeting will find it useful to review these transcripts.