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I’ll be attending Titon’s AGM tomorrow. It’s been a 1.5-bagger so far – the AGM will be a good opportunity to gather information so I can make a judgement whether to hold.
I’ll report back in a few days. In the meantime here is some more of the Buffett story.
Buffett told his fellow investors upon the splitting of the Partnership in 1969 that if they went with Bill Ruane then they should judge a four-percentage point per annum out-performance of the S&P500 as a “solid performance”.
Following Benjamin Graham’s principles Ruane did somewhat better than that – see the table.
But note that for the first four years he did not look like a genius investor: he under-performed every year!
After five years investors had less money than what they started with. They were really fed up in 1974 and many abandoned the fund.
But the decline was more to do with Mr Market being his usual awkward self, rather than anything wrong with Ruane’s approach.
Since the start the Sequoia Fund has multiplied investor’s money 426-fold compared with 96-fold for the S&P500.
To achieve outstanding long term results it was not necessary to produce regular “shoot-the-lights-out” performances – a few percentage points more than the index will do. And also note the reassuring evidence of many years of under-performance.
Sequoia Fund, Inc. annual percentage returns
Sequoia Fund (%) S&P500 Index (%)
1970 (from July 15) 12.1 20.6
1971 13.6 14.3
1972 3.6 19.0
1973 -24.8 -14.7
1974 -15.5 -26.5
1975 61.8 37.3
1976 72.4 24.0
1977 ………..To read the rest of this article, and more like it, subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1.
