Charlie Munger, vice chair of Berkshire Hathaway Inc.
Lacy O’Toole | CNBC
Charlie Munger’s many decades of investing featured too many winning trades to count, but there were some moves that he was touting even in his late 90s that continued to pay off.
Munger’s wins came not only at Berkshire Hathaway alongside Warren Buffett, but also at another holding company called Daily Journal Corp. and in his personal life, as he served as a director on boards.
Here are some of Munger’s moves that he was still publicly supporting and profiting from in 2023.
Munger was famously a skeptic of new technologies, but he made a small shrewd bet on electric vehicles that has proven to be a big winner.
Berkshire Hathaway first bet on Chinese automaker BYD in 2008, and that stake has grown into a multibillion-dollar position in one of the top companies in the energy transition space.
“I have never helped do anything at Berkshire [Hathaway] that was as good as BYD and I only did it once,” Munger said at the Daily Journal annual meeting in February.
Munger has also compared the company favorably to Elon Musk’s Tesla.
“Tesla last year reduced its prices in China twice. BYD increased its prices. We’re direct competitors. BYD is so much ahead of Tesla, it’s almost ridiculous,” Munger said in February.
Berkshire has been trimming its position in BYD, but still owned more than 80 million shares in the company as of October, according to a securities filing.
Another area where Munger found a gem in a competitive industry is Costco Wholesale.
Munger has called himself a “total addict” for the retailer, where he was a longtime shareholder and served as a director at the firm since 1997. He owned nearly 190,000 shares of the retailer, according to an October securities filing.
“They really did sell cheaper than anybody else in America,” Munger said in an episode of the “Acquired” podcast earlier this year. “It takes a lot of good execution to do it. You really have to set out to do it and then do it with enthusiasm every day, every week, every year for 40 years. It’s not so damned easy.”
Munger was not able to convince Warren Buffett to join him in owning the retail stock but said he would never sell a share in Costco despite the stock’s lofty valuation.
“As long as Costco keeps the faith in its strong culture and their extreme low markup policy, I don’t see any stopping it. The trouble with Costco is it is 40-times earnings. Except for that, it is a perfect damn company, and it has a marvelous future,” Munger said earlier this year.
Even though 2023 has been marked by the strong performance of major tech stocks, Costco has proven to be a big winner with a gain of nearly 30%.
Shares of Costco have gained nearly 30% in 2023.
Sometimes the key to a winning trade is knowing when to sell, and that can be at different times for different investors.
That is the approach Munger took with bank stocks. While Berkshire Hathaway has been dumping most of its bank stocks in recent years, Daily Journal still holds positions in Wells Fargo, Bank of America and U.S. Bancorp.
Munger said at the 2023 DJ meeting that the tax treatment of capital gains versus dividends for the California-based Daily Journal made holding onto the bank stocks the right decision.
“Those bank stocks I bought on the bottom tick in the foreclosure crisis. It literally was the bottom tick,” Munger said. “And they’re practically all gain, so I immediately give the government 40-some percent of everything we sell out of those bank stocks. And of course the dividends are almost tax free.”