The Tom Gardner Effect

Primarily for the sake of record-keeping, I will note within this thread that JD.com was up 4.5% on the day after TMFTomGardner’s asking about it late last night/early this morning.

Not that Tom doesn’t have a big following…keep in mind that the 2018 CES starts next week with all the major players in tech and consumer products getting ready to announce “something” or make joint announcements or have parties or whatever.
Probably with lots of email invites going out today.
Which products are real vs vapor vs longer term … we won’t know for a while.

Mike

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Now, if I could only teach my wife to feel that same way, and speak my name “in hushed, reverent tones”!

Probably not going to happen for anyone.

Most husbands could probably walk on water and the wife would say, “Honey, make sure you take off your shoes…don’t get the floor wet.”

Mike

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“Davis Dynasty is a very worthwhile read. I believe I first discovered it on a reading list TMFTom posted for HG subscribers a decade or so ago.”

-mekong


Hi mekong,

I remember that list (was an HG subscriber long ago). TMFTomGardner published the first part of that reading list (and said there would be 1 or 2 more parts - or levels - of the list which would be published later).

To my knowledge, he never published the REST of the list.

After several months, I contacted the Fool HQ and the woman I spoke with had no clue when/if any other list would be published.

I would love to have Tom’s COMPLETE list he originally intended to share with us subscribers!

…Tom?

— This…is the MaineReason
Long TMFTomGardner’s entire list

The Davis Dynasty is a great book. I read it a few years ago.

https://www.amazon.com/s/?ie=UTF8&keywords=the+davis+dyn…

I recommend that many of you read this.

I read these boards and probably over 100 more on a daily basis. I’m in awe in a way of those who have small portfolios with large balances that get great returns year after year.

My portfolio is still small, but with an XIRR since 2005 hovering close to 17% and with a total of around 75 positions, mazske and family, with the help of the Fool, has improved his lot in life.

I plan to hold my positions long term. Sure, I may sell occasionally. Sure, I may read Sauls end of the month reports and salivate at his great returns. Yet, mazske sees himself like the tortoise. He just keeps plugging away, step by step, day by day.

This plodding along helped him to pay off his home and then to buy two more to rent. This plodding grew his portfolio to the small size it is now.

And, most importantly, since mazske, like Matt, is a police officer, his plodding along is allowing him to retire from this career in just under 3 months.

I think once the stress of this job is behind me, I’m confident I will become a much better Fool!

I’m an optimist at heart, and I love Buffets piece in the Times where he spoke on his confidence of great times to come.

http://time.com/5087360/warren-buffett-shares-the-secrets-to…

I wish all of you a great 2018 and beyond.

Jeb, if you read this board, maybe I’ll see you in Ecuador this year. I hope to see more Fools in 2018 as well. And, if any of you are passing through the Shenandoah Valley and care to meet up, just let me know.

Fool on and stay safe in 2018!

mazske

All holdings are listed in my profile

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Here is a link to the teaser fool.com article with one book from each of TomG’s financial must reads list (published in 2009) –

https://www.fool.com/investing/small-cap/2009/04/17/tom-gard…

For those of you with a Hidden Gems subscription, here is a link to the full list (published in 2004) –

https://www.fool.com/premium/hidden-gems/coverage/1008/cover…

Vicki
Fool One Guide

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In response to the Davis Dynasty post by Volfan84…

So this is well documented and he is famous, but I feel skeptical. Clearly he did not turn $50K into $900m without adding money, so how much is due to great returns or just adding lots of money. He ran and investment company, so he could have made major money from client fees. It has also been said they he “never sold” his stocks, so he had to be adding new funds. (Ok, leverage gets you new money if your stocks are rising).

Here some stuff I found.
http://csinvesting.org/2012/03/18/great-investor-series-shel…
he took $50,000, provided by his wife Kathyrn, and amassed it into a $900 million fortune in 47 years (or 23.18% CAGR over 47 years!)
The 23 CAGR assumes he never added money to the $50k. That seems unlikely.
Although he bought insurance stocks his portfolio acted like a modern-day tech portfolio, rising from $100,000 to $234,790 in one year (he always bought on margin).
Ok, that helps.
A year prior to this [1942] he bought a seat on the New York Stock Exchange merely because it was cheap, having no use for it himself. He paid $33,000 for the seat which had fetched $625,000 in 1929
So before starting to invest, he bought a seat for $33k, no doubt with his wife’s money since his job bio was did not indicate any high income jobs. he worked odd jobs as a European correspondent with CBS in Geneva, as a “statistician” (before “stock analyst” was invented) for his brother-in-law’s Delaware fund, as a speechwriter and economic advisor for Thomas E. Dewey (then Governor of New York), a freelance writer, and author.
This article also says
Patriarch Shelby Cullom Davis, who all but cornered the market in insurance stocks in the 1950s, began seriously investing at age 40 with a bankroll supplied by his wife.
Which is different enough from the “age 38” mentioned in the link that follows.

Another source: https://www.suredividend.com/shelby-davis/
Shelby Davis did not start investing until he was 38. He started investing with $50,000…
By the time of his death he amassed a $900 million fortune and joined the list of the Forbes 400 wealthiest individuals.

Shelby Davis used leverage to boost his returns. He purchased a seat on the New York Stock Exchange which gave him access to lower margin rates than the typical investors. He used the maximum allowable amount of margin (slightly over 50%). The interest payments on his margin were tax deductable, which helped him save money on taxes.
Notice that Shelby Davis purchased about 50% of his stocks on margin.

Born 1909, so he was 38 in 1947, the start of a great post war run for the stock market.
In 1947 he created Shelby Cullom Davis & Company, which became a leading investment firm.
Q: So, how much of his wealth came from client fees?
Q: did he really start an investment company the same year he starting investing?
*Stock exchange seats produced a “dividend” based on trading activity, so if he traded for his clients, he could have generated income in addition to any fees he charged them. If he was constantly investing this new money, I have to wonder if the 23% CAGR is being calculated correctly.

This makes me suspicious of this link:
https://www.suredividend.com/shelby-davis/
Warren Buffett and Shelby Davis have very similar investing styles and compound annual growth rates. Both employed about the same amount of leverage (1.5x) to their investments.
Warren Buffett is the more well known of the two because he started investing earlier, which has given him a far larger net worth

Buffet was born in 1930. Davis started investing in 1947 with $50K. Warren was 17 in 1947, he did not have $50k while he was in high school. Warren went on to college before doing real investing. Hmmm.
I don’t doubt that if you invest in the right stocks at the right time and use leverage during a long bull market, you can do great things. I just think some of the articles on the web are inconsistent if not dubious.
I guess I better read the book. I think the FOOL sent it to me when I joined a service a while back.

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This aged well. Happy Thanksgiving :turkey:

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