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Floyd Odlum


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https://macro-ops.com/the-greatest-value-investor-youve-never-heard/

 

“We can have no finer role model. First and foremost, he was a value investor — a member of that eccentric tribe that believes it’s better to underpay than to overpay.”

 

Those words by James Grant were in reference to one of the greatest value investors the world has ever seen. It’s not who you think it is. And no, you couldn’t guess him given fifty chances. This investor remains off the beaten path, absent from many investors’ Mt. Rushmore of allocators.

 

 

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I came across him a few years back when diving across a rabbit hole. Ended up buying a 70 year old magazine issue that did a lengthy profile on him. Besides his 1929 exploits..he was a close friend of Howard Hughes (who frequently sought his financial advice), he bankrolled/seeded Conrad Hilton right at the inception and he almost took control of the Hearst publishing empire (the only major battle he lost). The legendary banker Sidney Weinberg (who led Goldman for 39 years) used to call him "50 percent Odlum" because "he gets everything for half price". Definitely an under explored character. 

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Here's a quote that's really a summary of documented facts:

 

"Floyd Odlum: Making the Best of Bad Times

Floyd Odlum is sometimes described as the only guy to make a fortune in the Great Depression. (He wasn’t.)

James Grant, editor of Grant’s Interest Rate Observer, called Odlum a “salvage artist par excellence.” “None of us can know the future,” Grant

wrote. “But, like Odlum, we can make the best of a sometimes unappetizing present.”

Grant also managed to scrounge up a pretty good anecdote on Odlum. In the summer of 1933, when all the world seemed to be in pieces, Odlum strolled into his office, looked at his glum partners and said, “I believe there’s a better chance to make money now than ever before.”

Odlum liked poking around in the smoking wreckage of the 1930s. Bad times create wonderful pricing. The story of a man with the odd

name of Odlum is one of how he got rich in the Great Depression.

Floyd Bostwick Odlum was a lawyer and industrialist, born in 1892. He started his investing career in 1923 with $39,000. In a couple of years,

he turned that into $700,000 through some savvy investing in deeply undervalued stocks and other securities. Odlum was on his way. All told, in

about 15 years he parlayed that $39,000 into over $100 million.

His big score came after the crash of 1929. Odlum bought busted-up investment trusts. As Diana Henriques writes in The White Sharks of Wall

Street, “Odlum [became] a multimillionaire almost overnight by investing in the undervalued shares of twenty-two investment trusts decimated by the 1929 crash.”

He found companies trading for less than the value of the cash and securities they owned. So he bought them, liquidated them and then took

the cash and did it again . . . and again. Of course, to do this, he had to have a little money at the bottom. And he did.

Odlum was either lucky or prescient, because he avoided much of the pain of the 1929 crash by selling some of his investments beforehand—

leaving him with some $14 million of fresh cash to take advantage of opportunities. So, don’t be afraid to hold onto cash until you find those

special 100-bagger opportunities.

As Odlum’s career shows, bad times create those big opportunities."

 

I guess the limits of copyright use without permission are possibly stretched so here is some justification:

-the idea is to share potentially helpful info that reflects generally known facts and that does not include unusual insight or analysis

-the quoted part contains only a small amount of text vs the whole book

-the reference is listed below

-the book is an interesting read and is recommended; I would say it is worth at least 100x the price.

 

https://www.amazon.com/100-Baggers-Stocks-100-1/dp/1621291650/ref=sr_1_1?crid=ZANZ09OV5KVI&keywords=100+baggers+chris+mayer&qid=1574881970&sprefix=100+baggers+%2Caps%2C275&sr=8-1

 

NB If sufficient negative feedback is provided, will delete the post temporarily until permission is granted.

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