Munger Doubles Down On BABA | The Acquirer's Multiple®

In their recent episode of the VALUE: After Hours Podcast, Jake Taylor, Bill Brewster, and Tobias Carlisle discussed Munger Doubles Down On BABA. Here’s an excerpt from the episode:

Bill: People can’t stop asking us about Alibaba as if something happened over the last three weeks that we had– [crosstalk]

Tobias: Well, Munger bought some. [crosstalk] Didn’t we literally come off in the first Twitter as Munger’s reupped on Baba. So, we should talk about that a little bit.

Bill: Well, why would Charlie change his opinion on China over some stock movement?

Tobias: There was some suggestion that he’s sold out of a position. I don’t know where that came from. I looked that as [crosstalk] sold out.

Bill: Buying an idiot. These people don’t know shit. Unless you’re in the room you don’t know. Don’t speculate. That’s the answer.

Tobias: It’s unusual for him to reverse course like that, that quickly.

Bill: Yeah. Unless Charlie himself gets on CNBC and says, I have sold Alibaba, I don’t believe anything that anybody says and call fake news on financial rumors.

Jake: Let’s try to remember. I don’t remember a time where he’s doubled down on something before.

Bill: Oh, I’m sure there’s been times. They were buying blue chip stamps. [crosstalk] bought it to multiple times.

Jake: Okay. All right, let me reframe that. In that public-run portfolio that where we get to see what he’s doing in real time, I don’t recall him ever doubling down in Daily Journals portfolio [crosstalk]

Tobias: [crosstalk] one shot. He just hurls it all up and then he doesn’t do anything with it.

Jake: Then it goes back to architecture and whatever else.

Bill: Well, dude, to be fair, that’s because he’s usually bottom taking stuff. Charlie is not used to buying and having it go down. I do think it’s hilarious that the Daily Journal shareholder base once thought that they were long a company that was transitioning into a digital court filing system. Now, they are super long Alibaba. [laughs]

Tobias: You get [unintelligible [00:37:32] just about anybody else, I think.

Bill: Yeah. Backing [crosstalk] Munger.

Tobias: [crosstalk] most interested company.

Bill: Look, man, if you got into Daily Journal, you knew Charlie would do whatever the hell he wanted. That was part of the deal. You get to live with it, and it may work, it may not. But you can’t blame anybody but you.

Tobias: James T’s brought up a great Charlie Munger story where it’s the middle of the financial crisis, and he’s done nothing with all the cash for years and years, and he literally has to pull over on the side of the 405 to phone in his trade. He must feel it. There must be a little bit of FOMO there if you can’t wait until you get back to the desk, got to do it now.

Bill: You know the only reason that I don’t believe that story?

Tobias: Is it not true?

Bill: I’m just telling you why I don’t believe it. If you’re on the 405, you’re already stopped.

Tobias: [laughs] You can’t pull over anywhere on the 405.

Bill: Yeah. You don’t need to pull over.

Jake: The math doesn’t check out on this story.

Bill: Yeah. It’s just not. I don’t buy it. I want to know what time of day it was.

Jake: He’s got a broker though too. So, it’s not like he’s in there placing trades on [crosstalk] Schwab account.

Bill: I’ve always been like, “Nah, the 405, he was already stopped. He just dialed the phone.” Got mad love for LA though. Don’t love driving around it, but I do love LA.

Tobias: It was great in the depths of the pandemic when everybody was doing a cannonball runs from East Coast to West Coast.

Bill: Oh, yeah.

Tobias: Every person who has grown up in LA has these theoretical times where you could get from somewhere to somewhere in like an hour. Then, the only time that you can really do that is Christmas Eve or-

Jake: 3 AM.

Tobias: -Christmas morning at 3 AM. Yeah, that’s the only time of the year you can do it. It’s purely theoretical. Every other time, it’s like three times or three hours.

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