Author Topic: Daily Journal 2019  (Read 7897 times)

BG2008

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Daily Journal 2019
« on: December 15, 2018, 10:44:43 AM »
Do we have dates yet?


mbreject

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Re: Daily Journal 2019
« Reply #1 on: December 17, 2018, 09:43:38 AM »
on or ~ Feb 14

NoCalledStrikes

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Re: Daily Journal 2019
« Reply #2 on: December 28, 2018, 09:51:05 AM »
It's official.

The Annual Meeting of Shareholders of Daily Journal Corporation (the “Company”) will be held on Thursday, February 14, 2019, at 10:00 a.m. Pacific Standard Time, at the DoubleTree by Hilton Hotel, Los Angeles Downtown, located at 120 South Los Angeles Street, Los Angeles, CA 90012.

Og

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Re: Daily Journal 2019
« Reply #3 on: January 31, 2019, 01:35:39 PM »
Does anybody know of any events going on around the meeting like last year (dinners, etc). I won't be attending this year, however, a colleague and friend of mine will be attending for his first time. He's an awesome guy, has done consulting work for PayPal & Google, is an author, made a documentary for the Sundance film festival this year, has coached thousands of people around the world, and has quite the extensive background in business & is also a former trial lawyer. So pretty interesting guy and I told him I'd help get him connected to stuff going on around the meeting this year.

Let me know!

lloyd-berk

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Re: Daily Journal 2019
« Reply #4 on: February 05, 2019, 04:06:27 PM »
It will indeed be nice to hang with the other Charlie Munger groupies on the evening before the Event. Some of us will meet at the DoubleTree lobby on Wed evening between 4.30PM to 5.00PM and then head to a nearby bar. Bring your fav Munger T-shirt. This is the same DoubleTree as the DJCO venue at 120 South Los Angeles Street, 90012.
« Last Edit: February 05, 2019, 10:54:42 PM by lloyd-berk »

netnet

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Re: Daily Journal 2019
« Reply #5 on: February 11, 2019, 01:19:31 PM »
Unfortunately, I won't be able to make it this year.  Does anyone know if it will be live streamed this year?

wabuffo

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Re: Daily Journal 2019
« Reply #6 on: February 11, 2019, 02:16:11 PM »
I hope the folks that do go get a chance to ask some questions about the core businesses. 

1) the software business appears to be nothing but a cash drain each and every Q. 

2) the legal newspaper business also appears to be tipping into cash losses.

3) even the cash dividend stream from WFC/BAC etc isn't enough to overcome these operating losses anymore and it looks like DJCO will have to start liquidating some of its marketable securities to keep the lights on.  (they sold the bonds they bought in '09 last year but the cash from that seems just about drained.)

I'm amazed that the stock price has not fallen given the real net liquidation value of the underlying assets.  I guess DJCO is a bit of a cult stock.

It would be great to get some insights from Munger, Salzman, et al about how they assess their current situation.

wabuffo

cubsfan

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Re: Daily Journal 2019
« Reply #7 on: February 11, 2019, 02:42:03 PM »
I hope the folks that do go get a chance to ask some questions about the core businesses. 

1) the software business appears to be nothing but a cash drain each and every Q. 

2) the legal newspaper business also appears to be tipping into cash losses.

3) even the cash dividend stream from WFC/BAC etc isn't enough to overcome these operating losses anymore and it looks like DJCO will have to start liquidating some of its marketable securities to keep the lights on.  (they sold the bonds they bought in '09 last year but the cash from that seems just about drained.)

I'm amazed that the stock price has not fallen given the real net liquidation value of the underlying assets.  I guess DJCO is a bit of a cult stock.

It would be great to get some insights from Munger, Salzman, et al about how they assess their current situation.

wabuffo

1) the software business appears to be nothing but a cash drain each and every Q.

I think there is more going on in the software business than meets the eye. There was a excellent presentation last month on DJCO and the software business - by the Manual of Ideas. If they have it right - the business looks very promising. There is little revenue to speak of, since the DJCO makes easy to get started by providing lots of assistance on the front end - and then collecting revenue on multi-year contracts. It is SAAS model - easy to get in - but I keep you locked in with the data - and if you decide you like it - you commit to a 10 year recurring revenue deal. Now it's very hard to get information on the operations - but I love SAAS models, as the revenue is recurring and predictable and easily upgraded. (You might start with 10 seats and then upgrade to 20 seats in the future - for which the vendor's cost is zero, but the client pays double). Anyway, if the product is real, and it sounds very good with some recent deals - this could be a very good business. I would not at all write it off. It seems to be going well - and it's still early.

wabuffo

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Re: Daily Journal 2019
« Reply #8 on: February 11, 2019, 07:23:31 PM »
There was a excellent presentation last month on DJCO and the software business - by the Manual of Ideas.

is this the presentation you are referring to?  I found it with a quick google search:
https://38cjxsde635anttomvn6z8h-wpengine.netdna-ssl.com/wp-content/uploads/ideas19-matthew-peterson.pdf

If it is, it leaves me even more concerned about the software business being able to be cash flow positive anytime soon.  DJCO can fund this business for quite awhile given its liquid marketable securities -- but then you have to factor in a shrinkage of the portfolio to continue to fund losses. 

I will also note that implementing systems in governmental agencies does have its share of implementation risks.  DJ Technologies larger competitor has had a couple of very public SNAFUs (Oakland-Alameda and Cook County court record system implementations).

By my calculations, DJCO's total businesses have had a cumulative negative free cash flow (including dividends and other investment income) of $5.2m in 2017-2018 and a further $2.6m negative free cash flow in Q1 of 2019.  At this rate, they may have to sell something this summer to continue to fund the software business (having already consumed the cash from their bond sale a year or so ago).

I'd be happy to be wrong about this - and I will admit that I don't totally understand this business.

wabuffo

cubsfan

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Re: Daily Journal 2019
« Reply #9 on: February 11, 2019, 07:58:58 PM »
Yes, that is it.  Since you seem to have questions about the progress, I thought you might find it helpful.

As with any SAAS business, there is a startup cost for each customer you need to bear. Perhaps the GEICO model for Berkshire
is a the way to thing about it - you suck it up for 18 months with a loss on each customer, but keep the average customer for
15 years - and make plenty of money over time, as they upgrade their services. They literally get locked in to the data.

So I see your concern, since DJ is obviously playing the LT game to capture customers first - but it's the smart way to go.

I have NO knowledge of how they compare to the competition - and that is critical. But if the value proposition of DJT actually
does reduce costs significantly over the long term - these products can be very easy to justify. By using the SAAS model - you make it
very easy to test the fit of your product to the customer - many software companies have not moved to the SAAS model because they
want the big license deal up front.

So the appropriate questions to management would be 1) size of the market. 2) pricing strategy 3) Typical ROI

I can't say that they can be cash positive soon - but the contractual commitments of SAAS deals are long and predictable and recognized
month-by-month as delivered. Once the customer is set up, there is very little cost on the vendors part to deliver services beyond
the implementation phase. These can be very profitable deals. You spend a year implementing a system, and collect for another 10 years
with little cost on your part. What matters with these companies is the backlog of signed deals, not the actual revenue recognized.

All of these application software companies have these implementation snafu's - since they are trying to automate your business processes
and everyone has unique requirements. SAAS makes it a lot easier, since the vendor has more control over the implementation.