The Ultimate Buy and Hold Investor: Anne Scheiber
Anne Scheiber, who died in 1995 at the age of 101, became an investing legend after her death.
She took $5,000 in the 1940s, invested it in the stock market, and when she died was worth $22 million. Not shabby.
How did she do it? Patience. Discipline. And investing in the best companies in America. From Time Magazine:
By the time she retired from a $3,150-a-year auditor’s job at the Internal Revenue Service in 1943, she was already investing her $5,000 savings account in a stock portfolio. During her career reviewing other people’s assets, she had noticed that most who left substantial estates had accumulated their money through common stocks. So Scheiber, who had earned a law degree and passed the Washington bar exam before joining the irs, studied the stock markets with the same precision that she had applied to reviewing tax returns.Fond of movies, she first invested in Hollywood studios, including Universal and Paramount, and kept a tally of their attendance rates. She also bought stock in about 100 blue chips and large franchise corporations, such as Coca-Cola and PepsiCo, and drug companies like Bristol-Myers Squibb and Schering-Plough. Her investments grew quickly, says William Fay, her stockbroker for 25 years. “After World War II, stocks really took off. While $5,000 sounds like a nominal amount, it could have increased fivefold in five years,” says Fay, who retired from Merrill Lynch two years ago. At Scheiber’s death, her portfolio had increased more than 4,000 times. Especially profitable were 1,000 shares in Schering-Plough that she had originally bought in 1950 for $10,000; by 1994 they had grown to 60,000 shares worth $4 million.
You think you can’t do it. Why not? She did.
If you hold the stock market long enough, you’ll make money. As it turns out over the last 100 years- you would have made a lot of it.
Her strategy? From Time:
Her strategy was simple: don’t worry about daily market fluctuations; reinvest dividends; hang tough.
Too many investors spend too much time obsessing over 50 cent increments in their stock price. They look at their portfolios on-line daily (sometimes hourly or several times an hour.) They fret over one 20% drop (or have a “sell” order if the stock does ever drop that much.) They don’t look to invest for the long haul- which is ten years or more.
The question to be asked, however, is: if what Anne Scheiber did seems so easy (who doesn’t know the top 50 stocks in the country right now? What if you put $100 into each tomorrow?)- where are the other Anne Scheibers?
It turns out that discpline and patience are rare attributes. Not many investors have it (or they’d all be as rich as she was.)
You can learn those skills.
Interestingly, on various websites that repeat her remarkable story, they don’t get it right. They say things like she was a billionaire when she died (um…no.) Another one said she invested a little here and there. Um…no. And others act like she didn’t know what she was doing (according to Time Magazine she actually attended shareholder meetings and asked questions.)
Just because she was a “little old lady” when she died at age 101, doesn’t mean she was clueless.
She made more money than many on Wall Street.
She proved it doesn’t take fancy insider information. It doesn’t take buying the next “great” thing (she bought established companies.) It does take buying companies that make money and holding them.
Afraid it’s too late for you because you’re, gasp, old? She was no youngster herself- beginning when she was well into middle age.
What’s your excuse?
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