While Alibaba's stock price in the U.S. has been sluggish since October 2020, Daily Journal, a company owned by Buffett's golden partner, Charlie Thomas Munger, continues to ramp up its holdings after opening its stake in Alibaba stock in the first quarter of 2021. This series of bottom-reading actions has aroused heated discussion among global investors and once again ignited people's curiosity about the 97-year-old.
Up to now, Munger Company holds a total of 602,000 American Depositary Receipts (ADR) of Alibaba, and after multiple position increases, Ali's position has also increased to 27.65%, ranking the third largest weighted stock, the market estimates that Munger's holding cost is about $181, on March 4, with Ali estimating that the lowest touch of $99.3, Munger bottom Ali lost more than 45%.
Munger: That's okay, Ali is very competitive!
In the first quarter of 2021, Munger bought Ali shares for the first time, and as of the end of the quarter, he held 165,320 Ali shares. According to the statistics of the Cheaperthanguru.com of the tracking position website, in the first quarter of last year, Ali's average closing price was $245.62, and the investment was about $40.61 million.
In the third quarter of 2021, Ali's stock price continued to fall sharply. Munger bought 136,740 shares of Ali stock that quarter, with an average closing price of about $181.93 and an investment of about $24.88 million. The total number of shares held rose to 302,060.
In the fourth quarter of 2021, Ali's stock price continued to plummet, with an average closing price of $145.63 for the quarter. Munger doubled his position in Ali and bought 300,000 shares. Approximately USD 43.6 million was invested.
Based on this calculation, Munger bought a total of 602,060 ADR from Ali, costing $109 million, with an average cost of about $181, and Munger currently loses more than 45%.
(Ali U.S. stock daily chart, source: Tiger Securities)
Munger previously responded that Alibaba's drawdown risk is not as great as it seems, and it is comfortable to invest in China and Ali, which is very competitive.
Munger stressed that he thinks China is a good place to invest because they can take a good stake in the companies they want to invest in at a good price. He revealed that he is more at ease than Buffett in investing in China.
"China is a modern power. It has such a huge population, it has achieved such a huge modernization in the last 30 years, and we have invested some money in China, because in terms of corporate strength and the price of securities, we can get more value in China than in the United States. ”
The man behind the "stock god": Seeing Buffett at first sight
Munger, vice chairman of Berkshire Hathaway and Buffett's golden partner, is 97 years old and has teamed up with Buffett to create the best investment record ever , the book value of Berkshire stocks , creating an investment myth with an average annual compound yield of 20.3%. Last week, Berkshire's stock price hit a record high of $494,419.72.
(Monthly chart of Berkshire Hathaway's stock price)
From 1941 to 1942, Munger studied mathematics at the University of Michigan; at the end of 1942, he dropped out of the army to join the Air Force after World War II, and was subsequently sent to the California Institute of Technology for meteorological training.
In 1948, he graduated with honors from Harvard Law School; in 1949, he joined a law firm and learned a lot about business and how to be human.
In 1953, Munger had just divorced to end an eight-year marriage, and his first child died of illness. That period was the darkest moment of Munger's life.
Faced with the departure of his wife and children, Munger, who was in debt, fell into great physical and mental torture, but still insisted on his profession. He was a lawyer at the time, and his income was not high, but he was conscientious in every case, winning the trust of clients with a focused and responsible attitude, and also accumulating contacts for his investment career.
After experiencing the pain of losing his son, Munger healed his wounds by starting a business. He and his partner founded a law firm in Los Angeles, and his life gradually turned around.
At the same time, he also began to invest, and made many gains in real estate development and construction, and earned his first pot of gold of $1.4 million. In 1956, Munger married his second wife.
In 1959, Munger returned to Omaha and first met Buffett through a friend's introduction, and they saw each other as usual, and then often talked on the phone to discuss issues for hours.
In 1962, Buffett began buying Berkshire Hathaway's predecessor, the English Textile Manufacturing Company; Munger opened a securities firm called Wheeler and Munger, which rose to prominence in the investment field, and the company's average annual return reached 28.3% for the next 10 years.
When Wheeler and Munger Securities liquidated, investors were given blue-chip stamped and multi-retail shares, which were eventually incorporated into Berkshire through equity swaps. This meant that these investors later received huge returns.
As Berkshire's number two person, Munger himself is humble and low-key but deeply hidden, always leaving the halo to Buffett.
One of the most well-known examples is that when tens of thousands of shareholders from all over the world come to Omaha to attend the Berkshire Company's annual meeting every year, the two companies at the helm spend hours answering shareholder questions, but it is usually Buffett who talks.
In September 1998, at Berkshire's special conference to buy General Reinsurance, Buffett even printed a piece of cardboard with Aunger's photo, placed it on the podium, and played Munger's signature mantra several times in a recording: "I have nothing to add." ”
However, Munger's classic investment ideas in his investment career are everywhere.
For example:
"If you want what you want, make yourself worthy of it"
"98% of the time, our attitude towards the stock market is: accept our own ignorance"
"Concentrate your money on a few projects and wait patiently for a good shot"
Wait a minute......
Many of these ideas can not only be invested, but also used in life, which is very beneficial.
Entering 2022, the world pattern continues to change, and Munger continues to influence the world with his own views. Asked at the shareholders' meeting about his views on bitcoin, Buffett tried to avoid the question, saying he did not hold the bitcoin himself.
But Munger directly said that he hated the success of Bitcoin and was not accustomed to virtual currencies kidnapping the existing monetary system and investing billions of yuan in this field to accumulate wealth, which he was very dissatisfied with.
"I want it to be banned immediately, and I admire China for banning it," Munger said. ”
"I certainly didn't invest in cryptocurrencies. I'm proud to avoid it. It's like STDs or something. I despise it to the extreme. ”
Munger and Buffett share a common habit of reading and studying. "There are no smart people I've met in my life who don't read every day — no, not a single one."
In the book Poor Charlie's Almanack, Munger mentions the concept of "mental model", and the reason why Munger and Buffett can make correct judgments in the stock market again and again is because they have mastered a variety of mental models in the process of reading a lot, so they can analyze problems in all directions, thus creating countless investment myths.