long run success of value portfolios

[bmichaud]

Yes he was still holding it near $0. I believe I read that in Snowball.

[twacowfca]

He retained his interest after Geico's IPO a few months later.  26 years later, his stock was worth more than 100 times what he paid for it.  :)

 

Was he still holding it when it became nearly worthless?  I remember seeing an interview of Prem and somebody asked Prem if Ben still held the bag and Prem didn't know.  Is there a public record of this?

 

The price of the stock got down to $2.00 a share through mismanagement, but the intrinsic value of the business was still intact, although the balance sheet was shot.  Warren got it recapitalized and the shareholders took a 50% or so haircut.  Then, it popped up to $10 or so, about the time Ben Died in 1976.  I'm fairly sure Ben's estate got more out of it than the low point price.  If I had to hazard a guess, the stock may still have been about a 50 to 100 bagger by the time his estate was settled.  Why don't you ask Warren?  He was the executor of Ben's estate.  :)

[sswan11]

Tweedy has a report on www.tweedy.com "What has worked in Investing", I believe, detailing outperformance of low price to book value picks.  Before they ran mutual funds (which are highly diversified, and TBGVX, which I once owned, is currency-hedged as well), they ran managed accounts, and I don't know that the managed accounts track record is publicly available.

[matjone]

I don't know if it is in any filings anywhere, but I've got a copy of "The Rediscovered Ben Graham" and I just went back and looked at a couple of articles in it.  According to what I am reading he was out of Geico before it had all the problems.  In fact in one interview from 1974 they revealed that he didn't invest in stocks at all anymore.

[ERICOPOLY]

If I had to hazard a guess, the stock may still have been about a 50 to 100 bagger by the time his estate was settled.  Why don't you ask Warren?  He was the executor of Ben's estate.  :)

 

I'm not sure of the year in which the estate was settled, but let's say it was 1976 -- so that makes it a 28 year holding.

 

15% annualized if a 50 bagger

18% annualized if a 100 bagger