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Charlie Munger has a scathing message for whiners worried about 'difficulties'. Here are the stocks that keep Warren Buffett's right-hand man happy in tough times.

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'Things were a lot tougher': Charlie Munger has a scathing message for whiners worried about 'hardship'.  Here are the stocks that keep Warren Buffett's right-hand man happy in tough times.

‘Things were a lot tougher’: Charlie Munger has a scathing message for whiners worried about ‘hardship’. Here are the stocks that keep Warren Buffett’s right-hand man happy in tough times.

It may be a new year, but not everyone is excited about what 2023 might bring. Stocks are down, economic growth appears to be slowing, and inflation remains rampant.

But Warren Buffett’s right-hand man, Charlie Munger, suggests that we should, in fact, be happier with our current situation.

“People are less happy with the situation than when things were much tougher,” Munger said earlier this year.

“It’s weird for someone my age because I was in the middle of the Great Depression when the hardships were unbelievable.”

Best known as a vice chairman of Berkshire Hathaway and a longtime business partner of Buffett, Munger also serves as president of the Daily Journal, a newspaper publisher with a sizable holdings of its own.

So if you’re hoping some of Munger’s hard-hitting realism rubs off on you this year, why not borrow some of his investment picks too? If these three actions can keep the 98-year-old veteran investor happy, maybe they will work for you too.

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Bank of America

The Daily Journal owned 2.3 million shares of Bank of America (NYSE: BAC) stock at the end of September, worth approximately $69.46 million at the time. Occupying 42.49% of the portfolio, which makes the bank the largest publicly traded stake in Munger’s company.

With economic turmoil forecast for the coming year, it’s a good fit for Munger. While many sectors fear rising interest rates, banks are looking forward to it. This is because banks lend money at higher rates than they lend it and then pocket the difference.

When interest rates rise, a bank’s earnings spread widens.

And it turns out that Bank of America has continually increased shareholder payouts.

In July, Bank of America increased its quarterly dividend by 5% to 22 cents a share — and that’s after the company’s 17% dividend increase in July 2021.

At the current share price, the bank offers an annual yield of 2.7%.

Buffett also likes the company, as Bank of America is Berkshire Hathaway’s second-largest holding.

Wells Fargo

With approximately $1.9 trillion in assets, Wells Fargo (NYSE:WFC) is another major player in the US financial services industry. It serves one in three US households and more than 10% of the nation’s small businesses.

The Daily Journal owned 1.59 million shares of Wells Fargo as of Sept. 30, making the bank its second-largest public holding with a weight of 39.16%.

According to the company’s latest earnings report, Wells Fargo generated $19.5 billion in third-quarter revenue, representing a 4% year-over-year increase. Earnings came in at 85 cents a share for the quarter, down from $1.17 a share in the same period a year ago.

See more information: 4 easy alternatives to grow your hard-earned money without the choppy stock market

While the economy faces uncertainty going forward, management remains optimistic.

“Wells Fargo is well positioned as we will continue to benefit from higher rates and continued disciplined expense management,” Wells Fargo CEO Charlie Scharf said in a statement.

“Both consumers and corporate customers remain on sound financial footing, and we continue to see historically low delinquencies and high payment rates across our portfolios.”

Wells Fargo has a quarterly dividend rate of 30 cents per share, translating to an annual yield of 2.9%.

Alibaba Group

Chinese tech stocks haven’t exactly been the darlings of the market lately. E-commerce giant Alibaba Group, for example, is down 26% in 2022 and is down more than 60% in the past two years.

But the Daily Journal kept the company as its third-largest holding. As of September 30, she owned 300,000 shares of Alibaba – a stake valued at $24.0 million at the time.

And the drop in Alibaba shares may give naysayers something to think about.

In the third quarter, the Chinese tech company increased its revenue by 3% year-on-year to $29.1 billion.

Management noted that the company delivered this revenue growth despite the “impact on consumer demand from the resurgence of COVID-19 in China, as well as the international trade slowdown due to rising logistics costs and foreign currency volatility.” .

Although Alibaba does not pay dividends, it still returns money to shareholders through its share buyback program.

On November 16, the company repurchased approximately $18 billion of its own shares under its existing $25 billion share repurchase program.

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This article provides information only and should not be construed as advice. It is provided without any kind of warranty.