Author Topic: DJCO - Daily Journal Corporation  (Read 48214 times)

wabuffo

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Re: DJCO - Daily Journal Corporation
« Reply #70 on: December 14, 2015, 04:04:47 PM »
one of the securities is the bonds of a US company purchased in 2009, the other two are foreign-issued equity securities (and, well there's this from the 10-K):

Quote
The fair value of the foreign marketable security held in South Korean Won was $8,694,000, and the adjusted cost was $10,977,000 as of September 30, 2015.... The fair value of the foreign marketable security held in Hong Kong Dollar was $26,355,000, and the adjusted cost was $9,697,000 as of September 30, 2015.

wabuffo


brker_guy

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Re: DJCO - Daily Journal Corporation
« Reply #71 on: December 14, 2015, 04:58:26 PM »
The one in Hong Kong Dollar is BYDDF.

DollarKing

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Re: DJCO - Daily Journal Corporation
« Reply #72 on: December 16, 2016, 12:30:14 PM »
From this year's 10-k

The Company holds foreign marketable securities based in South Korean Won and Hong Kong Dollar that are subject to risk associated with changes in the exchange rates of these currencies against the United States Dollar. The fair value of the foreign marketable security held in South Korean Won was $12,667,000 with an adjusted cost of $14,810,000 and $8,694,000 with an adjusted cost of $10,977,000 as of September 30, 2016 and 2015, respectively. The exchange rate of the South Korean Won against the United States Dollar was $0.00091 and $0.00084 at September 30, 2016 and 2015, respectively. The fair value of the foreign marketable security held in Hong Kong Dollar was $32,814,000 with an adjusted cost of $9,697,000 and $26,355,000 with an adjusted cost of $9,697,000 as of September 30, 2016 and 2015, respectively. The exchange rate of the Hong Kong Dollar against the United States Dollar was $0.12893 and $0.12903 at September 30, 2016 and 2015, respectively.


Anybody know what was the Korean stock purchased?

(The extra $3,833,000 Korean stock purchase between 1st Oct - 31st Dec 2015, with the corresponding values now at DJCO fiscal year end, shows it can't be Posco)

aceskc

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Re: DJCO - Daily Journal Corporation
« Reply #73 on: December 18, 2016, 10:12:22 PM »
Is it Posco PKX?

wabuffo

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Re: DJCO - Daily Journal Corporation
« Reply #74 on: December 19, 2016, 06:32:51 AM »
Is it Posco PKX?

I don't think so.   Since the second buy, its last 4 quarter-end closing prices (005490.KS) converted from KRW to USD don't match the change in quarter-end fair value (in USD) of the Korean holding in DJCO's portfolio.

wabuffo

DollarKing

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Re: DJCO - Daily Journal Corporation
« Reply #75 on: June 07, 2017, 06:15:53 AM »
Looks like the other Korean stock may well be: ILSUNG PHARMACEUTICAL.

WneverLOSE

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Re: DJCO - Daily Journal Corporation
« Reply #76 on: June 07, 2017, 07:05:59 AM »
Looks like the other Korean stock may well be: ILSUNG PHARMACEUTICAL.

How are you able to determine this ?

wabuffo

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Re: DJCO - Daily Journal Corporation
« Reply #77 on: June 07, 2017, 07:12:18 AM »
Quote
Looks like the other Korean stock may well be: ILSUNG PHARMACEUTICAL.

Doubt it - the math doesn't look to me like it works when comparing its quarter-end prices (adjusted for KRW/USD FOREX) to the quarter-end fair value of the common stock portfolio (ex-the fair values of the remaining known holdings).

wabuffo
« Last Edit: June 07, 2017, 07:14:47 AM by wabuffo »

wabuffo

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Re: DJCO - Daily Journal Corporation
« Reply #78 on: June 07, 2017, 10:25:37 AM »
My own thesis is that DJCO owns some Hyundai preference shares (005389.KS).

DJCO holds six common stocks (the 10-K mentions investments in seven companies, but one of the holdings is in a debt security).  Four are listed on a US exchange and disclosed every quarter in DJCO's 13F-HR (WFC, USB, BAC and PKX).  The other two are foreign securities -- one listed in Hong Kong, the other in South Korea.

We know that the marketable security listed on the Hong Kong Exchange is 1211.HK (BYD Company).  This can be proved in many ways -- but the easiest is by using the information DJCO provides in its foreign currency risk disclosure from its 10-K.  Since, the cost basis doesn't change, DJCO did not buy or sell any shares over this period.  Thus, by comparing the closing quarter-end fair market values of the holding with the closing quarter-end price of 1211.HK (all converted to HK Dollars) we get a match.   (Another way is to compare the quarter-end fair market value of BRK Energy's holdings of 1211.HK in USD with imputed quarter-end fair market value of DJCO's Hong-Kong listed security - they index identically).

                 

By using the quarterly fair values for the US-listed stocks from the 13F-HRs and imputing the fair value for DJCO's holding of 1211.HK, we can back into the quarterly fair value of the Korean holding.  As an example here is the imputed value for 6/30/15:

                     

Here are the quarterly estimated fair market values for the first batch of the Korean security (from 12/31/14 to 9/30/15 - Munger then appears to have purchased more of this Korean security).  I've tried matching the changes in quarter-end values with a number of Korean-listed stocks and I've come up with the best candidate to be Hyundai Motors preference shares (005389.KS). 

                     

The differentials are 1% or less in each quarter.  I've tried many other Korean shares and nothing seems to come as close (though there may be some I haven't tried.)  For example, Ilsung Pharm 003120.KS would index at 100%, 102%, 115%, 87% respectively from 12/14 to 9/15. 

There's some circumstantial evidence why Munger might own Hyundai.  He's been very complementary of South Korea's rise as a manufacturing power and used examples of their automotive industry's passionate embrace of Statistical Quality Control methods as a key to their success.  In addition, Munger is close to Li Lu of Himalaya Capital.  Lu made a presentation in 2013 highlighting Korean preferreds (they're actually non-voting common equity) and their discount to the underlying common shares of the same company.  Shortly thereafter, Munger makes his investment in this specific Korean "preferred".

Of course, this is my theory and I could be wrong or made a math mistake.  Feedback welcome.

wabuffo
« Last Edit: June 07, 2017, 10:34:07 AM by wabuffo »

wabuffo

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Re: DJCO - Daily Journal Corporation
« Reply #79 on: June 07, 2017, 11:48:52 AM »
sorry for the long posts....

After re-setting the benchmark to 12/31/15 because Munger bought another slug of the Korean marketable security, we can re-run the index using the fair market value at Dec 31st, 2015. 

                 

The Hyundai Motor shares (005389.KS) still track the DJCO Korean investment pretty well, I think.  Munger bought more common stock during the quarter ending 12/31/16 but its too early to make any decisions about that one yet.

wabuffo