Growing Rich - Arabictrader.com

KIRK KAZANJIAN
selling at a depressed price. It promptly went down another 10 percent.
At that time, the company had diversified a little too much and had
a number of short-term problems to work through, but it was cheap
and I wanted to add to my position. To my dismay, the stock committee
pulled it off the approved list. I had no choice but to sell it. This
was a great business that was slightly down in price, and they pulled
it off the list. It frustrated the daylights out of me. As it turned out,
the stock went up more than 1,000 percent after that.”
So how did this man who espoused value and abhorred momentum
survive at Stein Roe for so long? “That’s an interesting question,”
Yacktman admits. “I think part of it was I simply enjoyed the business.
The firm had a lot of young guys who were my age and I liked their
company and companionship. But there was certainly a lot of friction.
I’m a pretty autonomous guy, and we didn’t have much freedom in
making investment decisions. When they offered me a partnership
and more responsibility, I felt better for awhile. As luck had it, they
gave it to me after I had been there for about six years, right after
the market tanked in 1974.”
A CALL FOR CHANGE
The day Yacktman’s dad died, October 27, 1981, he was supposed
to have lunch with Bill Goldstein, who helped to manage a small
brokerage firm in Chicago. “Bill and his firm wanted to start up an
investment advisory subsidiary called Vincent Chesley Advisors. He
asked me to head the operation,” Yacktman says. “Bill was my personal
broker, so he understood how I made investment decisions. We
went out to lunch frequently and knew each other quite well. He
really wanted me for the position. I questioned whether I was the
right guy. I guess I didn’t have a lot of self-confidence at that point
because of my frustration with Stein Roe. I wasn’t sure I could sell
myself to potential clients. I later realized I couldn’t sell Stein Roe
because I didn’t believe in their investment strategy. About this time,
the partnership at Stein Roe was kind of tired of me, too, and I knew
they wouldn’t be upset to see me leave. So I resigned and joined Bill
and his firm on April 1, 1982.”
That summer, Vincent Chesley Advisors hit the jackpot. Ferris
Chesley, one of the firm’s principals, had an assistant whose husband
managed the Selected Special fund. The Selected funds were run by
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