Reported by Bloomberg and confirmed on Gurufocus, sold 300k shares as of 2022-03-31. Did he sell for the tax loss, planning to buy back? That’s the only reason I can think of. BABA is down about 40 to 60% from when he bought his first 300k shares.
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Interesting he is now left with the same 300k he started with.
For tax wash loss, you don’t have “sell-and-buy back”. You can also “buy and sell higher cost shares”
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Did he sell for the tax loss, planning to buy back? That’s the only reason I can think of…
I can think of another explanation.
Two, in fact.
Jim
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Well, margin call and maybe he sold because he has no clue? LOL
The interesting thing about the DJCO filings is that they’re usually done the very next day after the quarter, this time they waited, I think because they wanted the time to sell the whole thing.
We shall see.
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Oh my. BABA is a very risky one, you cannot trust China, yada, yada, yada…
My guess reasons could be:
- tax harvest (buy on margin and then sell old shares)
- converted to HK shares
- sold and bought other HK stocks (ie Tencent)
Interesting he didn’t do everything at the same time, and left a round number of shares.
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DJCO/Charlie and BABA has been a head scratcher. To me at least.
1 foot hurdle? Using OPM.
Time will tell.
Wtf!? He buys, doubles down and doubles down again with margin and then sells 50%!.. can’t wait to hear about this one.
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Looks like the number of shares sold (302,060) matches exactly the number of shares bought in Q1 (165,320) and Q3 2021 (137,740). And the number of shares remaining (300,000) matches exactly the same number of shares bought in Q42021
To me that seems to support the tax harvest theory.
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Someone on Twitter pointed out that a large BABA tax loss could be useful in offsetting the large gains DJCO realized on BYD.
Also, if Munger had truly changed his mind on BABA, he’d likely have sold 100%.
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I can’t find in the SEC filing that DJCO owned and sold BYD. Where to find? Thanks.
<< I can’t find in the SEC filing that DJCO owned and sold BYD. Where to find? Thanks. >>
DJCO owns BYD shares traded in Hong Kong so it doesn’t show up in the type of SEC filing you are looking for. Just as an un-named foreign security on DJCO’s balance sheet.
<<DJCO owns BYD shares traded in Hong Kong so it doesn’t show up in the type of SEC filing you are looking for. Just as an un-named foreign security on DJCO’s balance sheet.>>
Thanks. But, according to the following report, DJCO sold BYD last year, which gain can’t be canceled by this year’s loss of BABA.
https://markets.businessinsider.com/news/stocks/charlie-mung…
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<< Thanks. But, according to the following report, DJCO sold BYD last year, which gain can’t be canceled by this year’s loss of BABA. >>
I’m not an expert in corporate taxation, but I believe DJCO, a C-Corp, can carry back a loss for one or two years. Maybe a CPA can chime in.
I’m not claiming I know that he sold half the BABA for the tax loss. He could have sold it for any number of reasons. DJCO also has additional BYD shares held at large gains and there are big changes in management at DJCO, so perhaps Munger would like to clean up the investment portfolio before he dies.
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<I believe DJCO, a C-Corp, can carry back a loss for one or two years.>
You’re right.
“a capital loss carryback to each of the 3 taxable years preceding the loss year”
https://www.law.cornell.edu/uscode/text/26/1212
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Wonder if Charlie will be asked about Baba at the Berkshire meeting?
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Looks like the number of shares sold (302,060) matches exactly the number of shares bought in Q1 (165,320) and Q3 2021 (137,740). And the number of shares remaining (300,000) matches exactly the same number of shares bought in Q42021
To me that seems to support the tax harvest theory.
https://www.dataroma.com/m/hist/hist.php?f=DJCO&s=BABA
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Two level of misunderstanding:1. Charlie didn’t “dump” half of his position or got a margin call. 2. He didn’t go “crazy” leveraging up.
He’s just doing tax harvest in the untypical “backward way”.
My guess is that he sold the last of in in April.
However, I do reverse tax harvesting as well. I increase my position, of course, it is because I am clever and the stock must be temporarily miss-prised lower, and I can tax harvest and recoup some of my losses. Of course this is sometime a recipe for more losses. Many times declines are not temporary as we all know, which Charlie may have experienced as well. More times than not, this works out for me as long as i don’t make the mistake or permanently holding a double position. Which has happened and ended badly last year.
A couple of weeks after Munger stepped down as Chairman of Daily Journal, the Daily Journal dumped half of its BABA. Is there a connection between these 2 events? Was this sell decision made by the 98-year old ex-chairman …or, at very least, are there “team members” input at DJ here?
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I don’t own BABA but I’d be very slow to assume Munger has exited the position. Could be a tax play? Yes. Clearly if you have x size and have a market loss, if you are feeling confident, it pays to double up then sell half.
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