Growing Rich - Arabictrader.com

GROWING RICH WITH GROWTH STOCKS
of 1984,” Yacktman says. “The owners were at a point in their lives
where they were willing to sell and did. I found out later that Prescott
never really wanted the money management business. They were
more interested in the brokerage operation. But they kept us anyway,
and the president of Prescott gave me a bonus to stay on.”
The new firm had offices in Chicago, New York, Cleveland, and
Sarasota. “It was like ships passing in the night,” Yacktman says of
the situation. “We’d be on conference calls with each other twice a
week. They put together this group of money managers who were
totally disparate and independent. At least I still had autonomy and
could do what I wanted. They left me alone and let me build a business
as long as I was bringing in assets. A few years later, one of the firm’s
principals, Ron Ball, was assigned to manage the Selected Special
fund. Before that, Ball was with Bank One and Central National Bank
of Cleveland. His investment philosophy was similar to Yacktman’s
and the two became close friends and confidants.
In the mid-1980s, Kemper decided to add a 12b-1 marketing fee
to the Selected funds, so brokers could get an ongoing commission
for recommending them to clients. Before, the funds had been pure
no-loads. “Prescott was trying to figure out a way to attract more
assets,” Yacktman says. “About that time, I was unhappy because I
felt I was being undercompensated for what I had done. After all,
Selected American was performing well and bringing in a lot of
money. So I approached John Goldsmith, who was the head of Prescott
Ball and Turben. We solved things in about five minutes. He agreed
to give me a percentage of the revenue from the fund management
fees. I was happy; he was happy. The agreement was truly a win-win
deal and lasted until I eventually left. As far as I was concerned, life
was wonderful. I was managing a top-performing fund, making money
for the company, and earning a nice income for myself.
“In 1990, Kemper decided to join all of the brokerage firms it owned
and put them under one umbrella called Kemper Securities. Kemper
also bought out what it didn’t own of Prescott Ball and Turben. The
company then decided that since my division was in the money
management business, it didn’t belong with the brokerage operation.
So, it was moved back underneath the Kemper Financial subsidiary
on July 1, 1991. My new boss was like a loose cannon on the deck
in dealing with the Selected board. It was like being at Stein Roe only
worse. The people I had worked with at Prescott and I were totally
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