Growing Rich - Arabictrader.com

KIRK KAZANJIAN
sure there were people who redeemed their shares when the fund was
down. That decision made me feel bad because I don’t like to disappoint
anyone.” Those who stuck with Yacktman had watermelon
smiles the following year. In 1994, the Yacktman Fund rose 8.8 percent,
compared to a loss of 1.7 percent for its peers.
The number of shareholders in the Yacktman Fund now stands at
around 40,000. What’s it like knowing that the financial futures of
all those people are riding on your back? “I think about it a lot,”
Yacktman says. “I feel good, though, because I’m convinced my investment
process allows people to sleep well at night.” Interestingly,
even though Yacktman never achieved his goal of attracting $1 billion
in assets at Selected American, he did it with the Yacktman Fund in
less than five years. “I called and left a message with the Selected
board chairman the day it hit the $1 billion mark to let him know I
made it,” he exclaims, like a child who has just won a prized contest.
“It’s not often you reach a 14-year goal like this, and the chairman
had been hearing me talk about it for several years.”
The assets in both of Yacktman’s funds were much larger before
he had a bitter falling-out with marketing director Jon Carlson.
Carlson was also one of the independent directors for Yacktman’s
funds. After Yacktman fired Carlson in June 1998, Carlson and three
other fund directors staged a high-profile proxy battle to remove
Yacktman as manager of the funds. This dispute grabbed headlines
in the financial media and caused several prominent shareholders to
pull their money out until the dust settled. In the end, Yacktman was
triumphant and his funds now have a new board of directors.
EQUITIES FOR EVERYONE
Without question, Yacktman is a big believer in equity investing,
regardless of one’s age. In fact, he has a 90-year-old client who has
some 90 percent of her portfolio in stocks, the value of which is more
than ten times her cost. “She has a great lifestyle directly as a result
of investing that way,” he says proudly. “I would never buy bonds.
They just don’t provide a high enough return for the level of risk you
take. Besides, the bond contract is very slanted in favor of the creditors.
If you look at probabilities over any short period of time, one,
three, five, or even ten years, there’s a 70 percent chance equities will
outperform bonds or cash. Over a 20-year period, that number jumps
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