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Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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<SEC-DOCUMENT>0001193125-10-058027.txt : 20100510
<SEC-HEADER>0001193125-10-058027.hdr.sgml : 20100510
<ACCEPTANCE-DATETIME>20100316124022
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001193125-10-058027
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20100316

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			DAILY JOURNAL CORP
		CENTRAL INDEX KEY:			0000783412
		STANDARD INDUSTRIAL CLASSIFICATION:	NEWSPAPERS:  PUBLISHING OR PUBLISHING & PRINTING [2711]
		IRS NUMBER:				954133299
		STATE OF INCORPORATION:			SC
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		915 EAST FIRST STREET
		CITY:			LOS ANGELES
		STATE:			CA
		ZIP:			90012
		BUSINESS PHONE:		2132295300

	MAIL ADDRESS:	
		STREET 1:		355 SOUTH GRAND AVENUE 34TH FLOOR
		CITY:			LOS ANGELES
		STATE:			CA
		ZIP:			90071-1560

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	DAILY JOURNAL CO
		DATE OF NAME CHANGE:	19870427
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
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<TITLE>Correspondence Letter</TITLE>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>DAILY JOURNAL CORPORATION </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"
ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>915 East First Street </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Los Angeles, California 90012
</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>(213) 229-5300 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="right"><FONT
STYLE="font-family:Times New Roman" SIZE="2">March&nbsp;16, 2010 </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">David R. Humphrey </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Branch Chief </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">U.S. Securities and Exchange
Commission </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">100 F Street, N.E. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman"
SIZE="2">Washington, D.C. 20549-0402 </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Re:</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Daily Journal Corporation </FONT></TD></TR></TABLE>
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<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Form 10-K for the year ended September&nbsp;30, 2009 </FONT></TD></TR></TABLE>
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<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">File No. 000-14665 </FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Dear Mr.&nbsp;Humphrey:
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The purpose of this letter is to respond to your letter dated March&nbsp;2, 2010. To assist you in reviewing our responses,
we will precede each response with a copy (in bold type) of the comment stated in your letter. Our responses to your first two comments contain explanations that will serve as the basis for additional disclosures in Management&#146;s Discussion and
Analysis in our future filings. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Item&nbsp;7 - Management&#146;s Discussion and Analysis </U></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Liquidity and Capital Resources, page 17 </U></FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>1.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Based on your disclosures on page 24, we note that you had $33,667,000 of unrealized gains on your investments as of September&nbsp;30, 2009. In addition, according
to your balance sheet, these investments comprise approximately 72% of your total assets. In this regard, please revise your MD&amp;A disclosures to provide more transparency with respect to these investments. For example, the following would
significantly improve your disclosures: </B></FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>&#149;</B></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>A discussion of management&#146;s current investment strategy and a more detailed discussion of the reason for the shift in strategy during 2009
(beyond hopes of generating a better return). </B></FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>&#149;</B></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>A discussion of whether management has developed a formal investment policy and, if so, a description of that policy. Also, given
Mr.&nbsp;Munger&#146;s role as Chairman of the Board, your disclosures in this area should discuss his involvement in the development of your investment policy and/or execution of your investment strategy. </B></FONT></P></TD></TR></TABLE>

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<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>&#149;</B></FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>If you have a limited number of common stock holdings, please disclose the nature of those holdings and provide a corresponding risk factor. If you
hold a diversified portfolio of common stock, include disclosures to that effect. </B></FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">In February 2009, we
took advantage of near-panic selling in the stock market and redeployed some of our cash, which had been invested in Treasury securities and was generating only nominal interest, to purchase the common stock of two public companies and certain bonds
of a third. So far, these investments have been very successful. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We do not have a formal investment policy, and we do not
expect to adopt one. Our Board of Directors concluded that the paltry returns offered by Treasury securities and other cash-equivalent investments were depressingly low, and that there were much better opportunities in the capital markets with
rewards that far outweighed the risks. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our Chairman of the Board, Charles Munger, is also the vice chairman of Berkshire
Hathaway, which maintains a substantial investment portfolio. As you would expect, our Board of Directors utilized his judgment and suggestions, as well as those of J.P. Guerin, our vice chairman, when selecting the investments that we made last
year, and both of them will continue to play an important role in monitoring those investments. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The stocks and bonds are all
in Fortune 200 companies. But as noted above, the investments are concentrated in just three such companies. Because conventional wisdom values diversification over concentration, we will add a risk factor in future filings to the effect that a
significant decline in the market value of one or more of our investments will not be offset by the hypothetically better performance of other investments, and that could result in a large decrease in our stockholders&#146; equity and, under certain
circumstances, in the recognition of losses in our income statement. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>2.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Please address whether cash flows generated from the business, or a portion thereof, will be reinvested into Daily Journal or whether such cash flows will be used to
execute your investment strategy and expand your holdings. If you have a strategic plan to invest a portion of your excess cash flows to increase your holdings, disclosure should be made as to how you plan to invest these excess cash flows. Also,
since you changed your investment strategy during 2009, after many years of investing solely in the U.S. Treasury Notes and Bills, please include a discussion of the circumstances, if any, under which you would be likely to return to your original
investment strategy of investing solely in U.S. Treasury Notes and Bills. </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Daily Journal Corporation has two
businesses: a publishing business and a software development business. We do not aspire to have an investing business. Cash flows generated from publishing and software development will be invested in our two businesses or used to repurchase our
common stock as deemed appropriate by management and the Board of Directors, and we may entertain business acquisition opportunities. Any excess cash flows will be invested in such instruments as the Board
</FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
deems appropriate at the time. Such instruments may include additional securities of the companies in which we have already invested, securities of other companies, government securities
(including U.S. Treasury Notes and Bills) or other instruments. The decision as to particular investments will be driven by the Board of Directors&#146; belief about the risk/reward profile of the various investment choices at the time, and it may
return to government securities as a default if attractive opportunities for a better return are not available. The Board does not at this time contemplate the paying of a dividend, but it reserves the right to do so in the future. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Please note that it is important to read the above explanation in the context of our existing Management&#146;s Discussion and Analysis. As
we&#146;ve noted repeatedly, we do not expect the increase in our revenues driven by the publishing of trustee foreclosure notices to continue indefinitely, and the luxury of having to decide where to invest our excess cash flows may soon become
just a memory. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Signatures, page 32 </U></FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>3.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>We note that your principal accounting officer or controller has not signed the report in the second signature block. In future filings, please include their
signatures, each signing on behalf of the registrant in their individual capacities. </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our principal
accounting officer is our Treasurer, Gerald Salzman, who has signed the report in the second signature block. In future filings, we will indicate in the second signature block that he serves, among his other roles, as our &#147;principal accounting
officer.&#148; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">* * * * </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman"
SIZE="2">We acknowledge that the company is responsible for the adequacy and accuracy of the disclosure in the filing; that staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action
with respect to the filing; and that the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Please direct any comments or questions regarding the foregoing to the undersigned at (213)&nbsp;229-5300. </FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Sincerely,</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Gerald L. Salzman</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Gerald L. Salzman</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">President</FONT></TD></TR></TABLE></DIV>
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