Thread by @DavidBaskinBWM

In September, 2004, we were retained by an 81 year old man, who entrusted $1 million to us. During the ensuing 16 yrs he neither added to nor withdrew from his portfolio. This week, I will review his portfolio with him (by phone, sadly). Here are some interesting highlights.

The value of the portfolio today is $3,894,334. The money has almost exactly doubled twice, and the compound return including income and fees, has been 9.2%. With no money in and no money out the math is easy and not subject to distortion by time value or money value calculations

Lots of stocks have come in and out of this portfolio over 16 years but here are some of the unrealized gains as of today:
Brookfield Asset 513%
First Service Corp 203%
Alphabet Class C 212%
Apple 601%
JP Morgan Chase 277%
Microsoft 898% (cost of $24/sh!)
Visa Inc. 388%

What's the point? Over the last 16 years there have been lots of great reasons to sell any or all of those 7 companies. We let them ride. As the saying goes, water the flowers and pull the weeds. When you find a company capable of long-term compounded growth, don't let go.

Our client turns 97 this year and is going strong. If we had followed the "rules" of the industry, when he joined us at age 81 we would have bought probably 30% stocks and 70% bonds, and mostly short bonds at that. The value of his portfolio might have doubled.

And we would have cost him about $2 million by being too conservative and too risk averse. He went through the 2008/09 great recession and the 2020 market crash, and still has a double double.
With good corporate bonds yielding 2.5% and savings and CDs paying essentially zero..

It seems to us that those who eschew risk miss the chance to invest in the great companies that will continue to grow and compound capital into the future. Nobody knows what the next 16 years will bring, but sometimes looking backwards helps us see forward.