While it’s three years since Berkshire Hathaway backed out of newspapers, “silent partner” Charlie Munger – who has died aged 99 – never did, with activities which also extended to Melbourne, Australia.
Munger, who is reported to have taught his higher-profile partner Warren Buffett the value of buying “splendid” businesses at fair prices, bought Daily Journal Corporation – publisher of the law-focussed Los Angeles Daily Journal and a string of other titles, mostly in California – in 1977.
The evolved company owns enterprise software business Journal Technologies, headquartered in LA, but with offices in Logan, Utah and other members of its 220-strong team working around the world including Melbourne.
Last year, Nine’s Australian Financial Review also told how Munger “had entrusted a stake of his personal wealth” to Melbourne-based investment company Stonehouse Corporation, run by “American-turned-Australian” Charles Jennings.
AFR economics editor John Kehoe told how Jennings was successfully emulating the Berkshire ‘playbook’ to acquire and manage businesses for the long term, and had been endorsed as a ‘soulmate’.
Berkshire Hathaway sold the last of its newspapers in January 2020 – “the end of a long romance,” as Poynter called it – Buffett having “soured” of an industry in which print advertising and circulation had deteriorated much faster than he had expected.
A deal with Lee Enterprises had concluded not long before Daily Journal’s annual meeting in February that year, at which Munger mourned the passing of newspapers.
“They’re all going to die and there’s nothing that can be done with good management to save them,” he said. “What we get is these opinion services on TV that everybody watches where everybody believes some ridiculous version of things… it’s not a good thing in America that we lose Newsweek-type magazines and all our daily newspapers and get back Rush Limbaugh and his ilk on the other side”.
He told that annual meeting how “little Daily Journal” had been enlisted by enlightened state governments in South Australia and Victoria to automate complicated legal processes such as court filings and probation officing, issuing infringement notices and collecting fines.
“A lot of people just totally avoid it for that reason,” Munger quipped. “They just want to crank out a few bits of software … and count the money.”
He told shareholders then that he had “fallen in love” with the government of Australia and its “nice people”, noting that it was “wonderful that they’re smart enough to hire us”. While adding modestly, “I think that part of the reason we’ve been successful is that so many of our competitors are so awful.”
It’s an interesting insight into the man who was as much Buffett’s guide as business partner. Even a characteristic story about mule teams and earthmoving.
Pictured: The Daily Court Journal in 1888