Munger’s Missed $5B Billion Dollar Investment Opportunity In Belridge/Shell Oil

Whitney Tilson’s email to investors discussing Stansberry Pacific’s Asia Wealth Virtual Summit on Friday; Munger interview, failed investment & meeting pics; Buffett interview & annual letter out on Saturday.

Whitney Tilson stansberry pacific

1) I am one of the speakers at The Asia Wealth Virtual Summit 2019, hosted by Stansberry Pacific Research, which is taking place online, for free starting at 8pm ET on Friday evening (9am local time in Singapore on Saturday morning). You can register here. During and after my presentation, I’ll be on the chat line to answer questions.

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Q4 hedge fund letters, conference, scoops etc

Here’s the agenda (all times are local; subtract 13 hours for New York time):

9:00am – Kim Iskyan, Publisher of Stansberry Pacific Research: “5 Shocking Reasons Asian Markets Will Rise 50%”

9:30am – Whitney Tilson, former Managing Partner of Kase Capital and Founder of Kase Learning: “Beyond Value and Growth: Make Money Investing”

10:00am – Adam Khoo, Founder of Piranha Profits: “Profit from the Trade War Panic”

11:00am – KEYNOTE: One-on-one with legendary investor Jim Rogers

11:45am – LUNCH BREAK

Noon – Alvin Chow, CEO of Dr. Wealth: “The Strategy that Made Warren Buffett his First Million”

12:30pm – Jay Kim, Host of the The Jay Kim Show: “How the World's Best Hedge Fund Managers Really Invest Their Money”

1:00pm – Chris MacIntosh, Founder and CEO of Capitalist Exploits and Glenorchy Capital: “Bad News: I’m Afraid”

1:30pm – Brian Tycangco, Editor of the Strategic Wealth Confidential newsletter for Stansberry Pacific Research: “These two Asian markets could double in the next 3-5 years even as China continues to slow”

2:00pm – Dr. Steve Sjuggerud, top analyst for Stansberry Research: “Chinese Stocks Could Soar in the Next Two Years”

2:30pm – Eric Wade, Editor of Crypto Capital at Stansberry Pacific Research: “Cryptocurrency Investing: My Rules for Profits”

3:00pm – Michael Covel, internationally recognized trend trader: “The Fundamentals Are Bullsh--. Follow the Trend.”

3:30pm – Harry Dent, #1 New York Times bestselling economics author: “The Global Bubble Burst Ahead: The Asian Winners and Losers”

4:00pm – Richard Duncan, Publisher of Macro Watch: “How Chinese Monetary Policy Transformed and Destabilized the Global Economy”

5:00pm – Tanushree Banerjee, Analyst for Equitymaster and Editor of StockSelect and the 5 Minute WrapUp: “Rebirth of India: The Biggest Investing Opportunity in India in Nearly 2,000 Years”

5:30pm – Collin Seow, former executive from PhillipCapital and creator of “The Systematic Trader” program: “Swing Trade with a Powerful Systematic Setup”

6:00pm – KC See, CEO of QuestCorp Global: “Pre-IPO Investment Opportunities”

2) After the Daily Journal meeting a week ago, CNBC’s Becky Quick did a 31-minute interview with Charlie Munger that I enjoyed more than the meeting itself because she’s an excellent interviewer – you can watch it here or read the transcript here.

(Hint: Munger speaks slowly and clearly, so this video is an excellent one to watch at 2x speed – just go to Settings.)

3) During the meeting, Munger referred to an investment in the 1970s that he failed to make. Had he made it, he said, he’d be twice as wealthy today – but he didn’t elaborate. One of my students, Boris Senderzon of Hilbar Capital, tracked down the details. Here’s an excerpt from Phil DeMuth’s notes from the 2014 Daily Journal annual meeting:

Q:  Last year you talked about Belridge Oil and how you made a mistake not buying more when you had the chance.  Can you talk about your investment process?

Munger: In those days, Belridge was a pink-sheet company.  It was very valuable.  It had a huge oil field, it wasn't even leased, they owned everything, they owned the land, they owned the oil field, everything.  It had liquidating value way higher than the per share price -- maybe three times.  It was just an incredible oil field that was going to last a long time, and it had very interesting secondary and tertiary recovery possibilities and they owned the whole field to do whatever they wanted with it.  That's rare, too.

Why in the hell did I turn down the second block of shares I was offered?  Chalk it up to my head up a place where it shouldn’t be.  So, that's why I made that decision.  It was crazy.  So if any of you made any dumb decisions, you should feel very comfortable.  You can survive a few.  It was a mistake of omission, not commission, but it probably cost me $300 - $400 million.  I just tell you that story to make you feel good about whatever investment mischances you've had in your own life.  I never found a way of avoiding them all.

Munger also discussed this mistake, which he said cost him “about $5 billion”, in an interview he did last year with Li Lu. Lastly, here’s the article in the NY Times about Belridge Oil being acquired by Shell.

4) Here are some pictures from the meeting – it was standing room only, even in the overflow area. I’m with two alumni of Kase Learning seminars, Boris (left) and Juan Altirriba:

Asia Wealth Virtual Summit

5) Yahoo Finance’s Andy Server did a 10-minute interview with Buffett last year, which was just posted here: Warren Buffett on how to decide if something is a good investment

6) Buffett will be releasing his much-anticipated annual letter on Saturday morning (likely around 10am ET), which you can access on Berkshire’s website. The headline numbers for Q4 will be ugly, as Berkshire is now required to run through its income statement its stock portfolio's gains and losses (which could be as much as $40 billion in Q4). But once you cut through that short-term noise, I’m quite certain we'll see that the underlying business continues to fire on all cylinders.




About the Author

Jacob Wolinsky
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Prior to ValueWalk, Jacob was VP of Business Development at SumZero. Prior to SumZero, Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver