Subject: Re: 2026 YTD Performance
Debt free and 70% cash…
I like it. Now the hard part…waiting.

The danger with holding cash is the risk of drifting into mediocre investments, especially things we understand less than and of lower quality than something like Berkshire. I say this having fallen into that trap to some extent in the past.

I have to respect the discipline of the capital allocators at Berkshire. People are screaming at them to do something. Crickets…

A reminder from Gemini on Munger’s Daily Journal spear fishing!

The story of Charlie Munger’s management of the **Daily Journal Corporation (DJCO)** is a masterclass in extreme patience. For decades, the company was a simple, cash-rich publishing business. Munger, who served as Chairman, allowed cash to accumulate for years, refusing to invest in an overpriced market.
Everything changed in the first quarter of **2009**, at the absolute "nadir" of the Great Financial Recession.
### The Timeline: Years of Inactivity
* **The "Wait" (Pre-2009):** For years leading up to the crisis, the Daily Journal held its excess capital almost exclusively in **U.S. Treasury Bills**. While other companies were diversifying or making acquisitions during the mid-2000s boom, Munger did nothing. He famously said that "waiting helps you as an investor, and a lot of people just can't stand to wait."
* **The Move (Q1 2009):** In February and March 2009, with the banking sector appearing to be in total collapse, Munger finally pivoted. He abandoned the safety of Treasuries to "plow" the company’s cash into the very sector everyone else was fleeing: **Banks.**
### The Sums Involved
Munger didn't just nibble; he deployed nearly all available liquid capital at the bottom of the market.
* **Total Initial Investment:** Approximately **$20.4 million**.
* **Concentration:** This represented roughly **71%** of the company's total cash and equivalents at the time.
* **The Holdings:** He concentrated the money into just four primary stocks:
1. **Wells Fargo (WFC):** Purchased near its all-time lows (around $8/share).
2. **Bank of America (BAC):** Bought when it was trading under $5/share.
3. **U.S. Bancorp (USB)**
4. **POSCO** (a South Korean steel maker)
### The Result: Rapid and Massive Returns
The timing was nearly perfect. Within months, the market bottomed and began a historic bull run.
* **By Sept 2009:** The initial $20.4 million had already generated over **$34 million in unrealized gains**, more than doubling in less than a year.
* **Long-term Growth:** By 2012, the portfolio had grown to **$76.7 million**. By the time of Munger's passing in 2023, the Daily Journal’s stock portfolio was valued at approximately **$300 million**.
* **Dividend Income:** By 2015, the portfolio was generating **$3.8 million in annual dividends**—a massive sum for a small publishing company whose total annual revenue was only around $35–40 million.
### Munger’s Philosophy on the Trade
Munger often used this event to illustrate his "spear-fishing" philosophy. He believed that an investor should sit quietly for a long time, and then, when a "fat pitch" comes, they must swing with everything they have.

"It takes character to sit there with all that cash and do nothing. I didn't get to where I am by going after mediocre opportunities." — *Charlie Munger