Daily Journal AGM 20170215 stream by CNBC.com

[CharlesMunger]

One thing I enjoyed in Charlie's extra comments following the Daily Journal meeting was his description of reading barron's for 50 years and getting one investment idea from it.  Asked for details he mentions that he made $80 million dollars on the idea - a tiny auto parts company - whoever owned the monroe shocks brand at the time [Tenneco, TEN].  He bought the 11 3/8% junk bonds at 35% of par and they were called at 107 or thereabouts.  And he bought the stock at $1 and it went to $40 (he sold at $15 in about 2 years time).  Asked by the crowd what the article in Barron's said, he replied "that it was a cheap stock".

He then slips in that he gave that $80 million dollars to Li Liu who turned it into "4 or 5 hundred million dollars"...

https://www.youtube.com/watch?v=7oBq3rdv-vU


Also in this clip, he reminisces about the opportunity that used to exist "for 60 years" in "jewish treasury bonds" - event arbitrage / merger arbitrage.  He said for 60 years he, warren, graham-newman and goldman sachs would make 20% per annum in event arbitrage, primarily because there was a lot less capital / competition in the space, and because stock brokers worked on commission and would call their clients up to suggest selling the stock after the 'pop'.  Dumb selling as Charlie called it - selling at 95 on a cash $100 deal, etc...

Tenneco close to Munger's purchase price. Anyone looking at it?

[Voodooking]

Tenneco close to Munger's purchase price. Anyone looking at it?
[/quote]

Interesting idea. I just pulled up the long term stock chart on Tenneco and over the decades it probably traded at an average of $30 per share, give or take. However in 2001 it dropped to $1, and then rose back up to $30, then in 2009 it fell to $1 again, before rising to $60 at points, then over the last two or three years it has fallen to around $2 again.

Have you looked at the valuation or fundamentals yet? I haven't had time to dig into it. Are the reasons that it's cheap this time different from the past couple of drops?