Charlie Munger told Daily Journal investors not to expect their shares to climb much further after they hit a record high in December.

Charlie Munger.
Lane Hickenbottom/Reuters

  • Warren Buffett’s longtime business partner has called out a “speculative frenzy” in the stock market.
  • Charlie Munger told Daily Journal stockholders that their shares were unlikely to rise much further.
  • The Berkshire Hathaway vice-chairman also bemoaned the lack of bargains in the current market.
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Warren Buffett’s right-hand man has flagged a “speculative frenzy” in the stock market and signaled he doesn’t expect share prices to climb much higher.
Charlie Munger, the vice-chairman of Buffett’s Berkshire Hathaway conglomerate, is also the chairman of Daily Journal Corporation, a newspaper publisher and software developer.
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Daily Journal’s stock price hit a record high of $404 on December 31, after surging roughly 50% in the four weeks prior.
“This price was reached amid much speculative frenzy and much forced buying by index funds,” Munger said in his letter to Daily Journal shareholders this month.
The 97-year-old investor also touched on Daily Journal’s stock portfolio, which counts Bank of America and Wells Fargo among its holdings. Its value soared 45% to $260 million in the fourth quarter of 2020.
“Shareholders should not expect any significant appreciation above that level anytime soon,” he said.
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Moreover, Munger highlighted the difficulty of finding bargains in the current market. Daily Journal’s “trove of liquid wealth” – its cash and stocks – stemmed from “retained newspaper earnings, multiplied by seizing opportunities of a type no longer widely available,” he said.
Munger’s letter echoed his comments in a virtual interview last month. The investor also spoke of a “frenzy” in stocks then, and described technology companies such as Apple securing trillion-dollar market capitalizations as “the most dramatic thing that’s almost ever happened in the entire world history of finance.”