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From what I can see, RCL's share price has 6x since you recommended it, that first day in Stock Advisor, September 21, 2007. It was at 40 in 2007, when I recommended it. Those are simple round numbers because having picked up first at 40 in 2007, we can see with it around 240 today, it is up six times in value.
Over that time period, there have been only three years where more than half of large-cap mutualfunds beat the market. Even then, it was a slim majority, with 55% the highest level of market-beating funds in 2007, right before the market crashed. Data source: Berkshire Hathaway shareholder letters.
I do believe that with this business, the size that it is, and what they do, they would be well-served to really focus on figuring out how to make sure to continue that narrative of returning value to shareholders. In fact, mutualfunds that invest along these lines have come to be known as balanced funds.
But the long-term shareholder in AMC, if you bought it on some perception that stick it to big hedge funds just know this, over the past three years, the market is up 33%. This was a very good decision for Home Depot and its shareholders. And every single time period and data point tested, low-cost funds beat high-cost funds".
Now, I want to note four times over the past 20 years, the company split its stock, two for one in 2006, three for two in 2007, four for one in 2021, and 10 for one in 2024. Thus, shareholders today now have 120 shares for every one share they own back in 2005 when I first recommended it. Let's go through the story then.
RITHOLTZ: So were you — in the early days, it was mutualfunds it was SMAs, what were you guys doing? So it was Franklin, along with mutualfund pioneer Sir John Templeton. JOHNSON: Exactly, the tax… RITHOLTZ: The negative on a mutualfund is phantom taxes. RITHOLTZ: You’re going to be passing that.
If I'm a Walgreen shareholder, I might think they're making the right business decision. I'm a shareholder, so both of those things are important to me. By October 2007, so two years later it's gone from a buck 64 to 10. In October 2007 we're back. They had raised their dividend 50 consecutive years going into last year.
Go back and look at what happened to the US in 2007-2009. Every Canadian owns bank stock through various index funds and mutualfunds, but I own some stock directly as well, but the banks are interesting to me because, five years from now, we will get through this. Yet it has the lowest valuation/highest yield.
All of their portfolio managers not only are substantial investors in each of their funds, but they do a disclosure year that shows each manager by name and how much money they have invested in their own fund. I wish more mutualfunds and ETFs showed that data. Kind of unique. They have a very unique approach.
In Treasuries, yield on the 10-year pulled back from Thursday’s levels that were approaching the highest since 2007. streak that long has only been seen in recessions that started in 1973 and 2007 pic.twitter.com/ThjCW8yQy5 — Liz Ann Sonders (@LizAnnSonders) August 18, 2023 Where's the recession? UK and German bonds advanced.
They include funds run by legendary investors like Warren Buffet, Seth Klarman, Ron Baron and Ken Fisher. Activist investors like to make investments in companies where management lacks the proper incentives to maximize shareholder value. They differ from traditional L/S hedge funds by having a more concentrated portfolio.
Are most people better off in an index fund than playing with an active manager, be it mutualfund or high fee hedge funds? SEIDES: John Yeah, I said back then, the bet started in 2007 and I say today, being in the market and investing in hedge funds is completely apples and oranges. RITHOLTZ: 2007.
And as you well know, in 2007, accountants fixed what I thought was a horrendous mistake — RITHOLTZ: Right. You’re accountable to shareholders. DAMODARAN: I think it’s going to be almost impossible to get that done at the shareholder level because — RITHOLTZ: So it has to be institutional. RITHOLTZ: Sure.
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