Even legendary investors can fall for a compelling story. Charlie Munger spent decades warning about the risks of overconfidence, but at 97, the longtime investing partner of Warren Buffett made a costly bet on Alibaba (BABA) that he would later call one of his worst mistakes.
Munger built the position through Daily Journal Corporation, the publishing and software company he led for decades. Securities filings show the company bought 165,300 Alibaba American depositary shares in the first quarter of 2021, worth about $37.5 million at the time. By the end of that year, the position had grown to roughly 602,000 shares valued at about $72 million, or approximately 28% of its U.S. stock portfolio. Daily Journal also used margin-account borrowings to finance investments.
