flikhopper Posted February 22, 2012 Share Posted February 22, 2012 [amazonsearch]100 to 1 In The Stock Market[/amazonsearch] (Out of print) Wondering if anyone on the board has read this title? (emphasis added in quotes below) Chuck Akre Interview Excerpt Early in the 1970s, I came across a book written by a Boston investment counselor, whose name was Thomas Phelps. And the book he wrote was called 100 to 1 in the Market. You probably know from the history books that Peter Lynch was around Boston in those days, and he was talking about things like "10-Baggers." But here was Thomas Phelps, who was talking about "100 to 1." He documented characteristics of these businesses that caused one to have an experience, where they could make 100 times their investment. The answer is, of course, it's an issue at the rate at which they compounded the shareholders' capital on a per unit of ownership basis and those that compounded the shareholders' equity at a higher rate had higher returns over long period of years. And so that's what comes into play is this issue of compounding compound machines, and we're often identified with this thing in our process that we call the three-legged stool. The legs of the stool have to do with the business models that are likely to compound the shareholders' capital at above-average rates, combined with leg two, people who run the business who are not only killers at running the business but also see to it that what happens at the company level also happens at the per share level--and then number three, where because of the nature of the business and the skill of the manager there is both history as well as an opportunity to reinvest all the excess capital they generate to reinvest that in places where they earn these above-average rates of return. Amazon.com Review Of all the books on investing that I've read over the years, this one was at once, the most pleasurable and most challanging to my own beliefs. Mr. Phelps spent over 40 years in and around Wall Street and the world of investing. His activities included being a private investor, columnist, analyst, author and financial advisor. His career spanned from just before the Crash of 1929 to the 70's. In spite of the the rather glamorous title, the book is actually about Buy and Hold investing. Yes, it is true that you could have made a million dollars by buying any of about 350 stocks he mentions if you had invested $10,000 and just sat back and watched it grow over time! Doesn't sound that exciting, does it? However, I hope you didn't miss the point that he mentions AT LEAST 350 opportunities to have done this! Most of the companies' names will be quite familiar to most readers. Article by Chris Mayer I just met this remarkable fellow, full of wisdom on investing, yet hardly known beyond a small group of fans. His name is Thomas Phelps, and he’s had quite a career. He was The Wall Street Journal’s Washington bureau chief, a former editor of Barron’s, a partner at a brokerage firm, the head of the research department at a Fortune 500 company and, finally, a partner at Scudder, Stevens & Clark (since bought out by Deutsche Bank). Phelps retired in Nantucket after a varied 42-year career in markets. Along the way, Phelps figured out a few things about investing. He conducted a fascinating study on stocks that had returned $100 for every $1 invested. Yes, 100-to-1. Phelps found hundreds of such stocks, bunches available in any single year, that you could have bought and enjoyed a 100-to-1 return on — if you had just held on. Article by Timothy Lutts According to Mr. Phelps, you look for companies that provide: 1. Inventions that enable us to do things we have always wanted to do but could never do before. 2. New methods or new equipment that helps people do commonplace things easier, faster or at less cost than ever before. 3. Processes or equipment to improve or maintain the quality of a service while reducing or eliminating the labor required. 4. New and cheaper sources of energy. 5. New methods of doing essential jobs with less or no ecological damage. 6. Improved methods or equipment for recycling the materials used by civilized man instead of making mountains of waste and oceans of sewage. 7. New methods for delivering the morning newspaper without carriers or waste. 8. New methods or equipment for transporting people and goods on land without wheels. Link to comment Share on other sites More sharing options...
Liberty Posted February 22, 2012 Share Posted February 22, 2012 Long out of print and my public library doesn't have it :'( Anyone knows if a PDF has been released in the wild? Link to comment Share on other sites More sharing options...
eclecticvalue Posted February 23, 2012 Share Posted February 23, 2012 Its funny you started this thread. I am currently reading the book right now. Its AMAZING!!! Although it repeats itself many times. Link to comment Share on other sites More sharing options...
Liberty Posted February 23, 2012 Share Posted February 23, 2012 Its funny you started this thread. I am currently reading the book right now. Its AMAZING!!! Although it repeats itself many times. I'm curious to know where you found it..? Link to comment Share on other sites More sharing options...
Morgan Posted February 23, 2012 Share Posted February 23, 2012 I'm curious to know where you found it..? I'm interested as well. I've scoured the interwebs for it to no avail. Link to comment Share on other sites More sharing options...
fenris Posted February 23, 2012 Share Posted February 23, 2012 I'd love to get my hands on that one, too.. Link to comment Share on other sites More sharing options...
eclecticvalue Posted February 23, 2012 Share Posted February 23, 2012 oops I should not have mentioned it ;D. Link to comment Share on other sites More sharing options...
alpha231616967560 Posted February 23, 2012 Share Posted February 23, 2012 It's available at 161 US libraries that participate in the interlibrary loan system. Most public libraries give you access to this system for free. Link to comment Share on other sites More sharing options...
eclecticvalue Posted February 23, 2012 Share Posted February 23, 2012 It's available at 161 US libraries that participate in the interlibrary loan system. Most public libraries give you access to this system for free. Exactly!!! Also if your in college then you should be able to get it easily because most participate in it. Link to comment Share on other sites More sharing options...
Guest Hester Posted February 23, 2012 Share Posted February 23, 2012 Haven't read the book but these types of threads always seem, at least to me, to be a rich vein of survivorship and hindsight bias. 1. Inventions that enable us to do things we have always wanted to do but could never do before. 2. New methods or new equipment that helps people do commonplace things easier, faster or at less cost than ever before. 3. Processes or equipment to improve or maintain the quality of a service while reducing or eliminating the labor required. 4. New and cheaper sources of energy. 5. New methods of doing essential jobs with less or no ecological damage. 6. Improved methods or equipment for recycling the materials used by civilized man instead of making mountains of waste and oceans of sewage. 7. New methods for delivering the morning newspaper without carriers or waste. 8. New methods or equipment for transporting people and goods on land without wheels. I realize this is from an article and maybe the book is much better, but that list reminds me of Nostradamus prophecies. Very vague and ambigous, until after the fact when it looks oh so obvious in hindsight. Nobody has a crystal ball, and the path of the Apple's of the world are lined with the corpses of more similar companies than anyone can remember. Link to comment Share on other sites More sharing options...
jberkshire01 Posted February 23, 2012 Share Posted February 23, 2012 One of my favorite quotes from the book: http://www.valueinvestingworld.com/2012/01/thomas-w-phelps-on-opinions.html Link to comment Share on other sites More sharing options...
value-is-what-you-get Posted February 23, 2012 Share Posted February 23, 2012 Haven't read the book but these types of threads always seem, at least to me, to be a rich vein of survivorship and hindsight bias. I realize this is from an article and maybe the book is much better, but that list reminds me of Nostradamus prophecies. Very vague and ambigous, until after the fact when it looks oh so obvious in hindsight. Nobody has a crystal ball, and the path of the Apple's of the world are lined with the corpses of more similar companies than anyone can remember. +1 1. Inventions that enable us to do things we have always wanted to do but could never do before. - like flying! Lets invest in airlines 2. New methods or new equipment that helps people do commonplace things easier, faster or at less cost than ever before. - like computers! Lets pick which computer company will go up 100 fold 3. Processes or equipment to improve or maintain the quality of a service while reducing or eliminating the labor required. - I can't think of a single machine that has replaced a human and given me better service 4. New and cheaper sources of energy. - Natural Gas!! Lets invest in Natural Gas company it's way cheaper than oil 5. New methods of doing essential jobs with less or no ecological damage. - outhouse manufacturers! 6. Improved methods or equipment for recycling the materials used by civilized man instead of making mountains of waste and oceans of sewage. - outhouse manufacturers, and any company that sells reduced consumption (no money in that) 7. New methods for delivering the morning newspaper without carriers or waste. - the internet 8. New methods or equipment for transporting people and goods on land without wheels - walking. The energy required to overcome the rolling friction of a steel train wheel on a steel rail is such a small fraction of the energy required to levitate the mass carried by same train that any endeavour seeking to achieve this result is doomed. This is top-notch flakiness - reminds me of the room full of scouts in Moneyball talking about things that are irrelevant and unmeasurable like they are relevant and measureable - and he calls himself a value investor? If you double your money 7 times over your life you've achieved a 100 fold increase. I'll take WEB punch card over rampant needle in haystack finding any day. Time spent pursuing the eight tenets listed is time consumed, not time invested. Link to comment Share on other sites More sharing options...
SharperDingaan Posted February 23, 2012 Share Posted February 23, 2012 3. Processes or equipment to improve or maintain the quality of a service while reducing or eliminating the labor required. - I can't think of a single machine that has replaced a human and given me better service We're a little biased - but the flush toilet, & related paper, is right up there! No more butlers, maids, & service staff to carryout &/or empty the 2G chamber pot. Link to comment Share on other sites More sharing options...
value-is-what-you-get Posted February 23, 2012 Share Posted February 23, 2012 3. Processes or equipment to improve or maintain the quality of a service while reducing or eliminating the labor required. - I can't think of a single machine that has replaced a human and given me better service We're a little biased - but the flush toilet, & related paper, is right up there! No more butlers, maids, & service staff to carryout &/or empty the 2G chamber pot. ::) Good one! I hadn't considered such a simple machine! I still wouldn't know which toilet manufacturer or paper (and of course preceding pulp products) company to put my money into on hopes of a 100 bagger! Link to comment Share on other sites More sharing options...
Liberty Posted February 23, 2012 Share Posted February 23, 2012 3. Processes or equipment to improve or maintain the quality of a service while reducing or eliminating the labor required. - I can't think of a single machine that has replaced a human and given me better service I'm pretty sure that the robots that built most of the electronics and cars that you have used in the past many years have made them a lot cheaper and more reliable than if they had been all built by hand. Link to comment Share on other sites More sharing options...
value-is-what-you-get Posted February 23, 2012 Share Posted February 23, 2012 3. Processes or equipment to improve or maintain the quality of a service while reducing or eliminating the labor required. - I can't think of a single machine that has replaced a human and given me better service I'm pretty sure that the robots that built most of the electronics and cars that you have used in the past many years have made them a lot cheaper and more reliable than if they had been all built by hand. absolutely - would much rather have machine-built machines, but the author refers to "the quality of a service" rather than the manufacturing of great products. I had in mind the machines that answer the toll-free numbers at large corporations as an example. I suppose the service includes the provision of labour services by humans too. That said, which company making robots or in fact entire automated plants does one invest in? The real problem I have with the author's premise is that the odds are so heavily stacked against anyone trying to use this as a basis for investment research and subsequent investment success. The real disservice is to the novice, who's of course searching for the big homer. It's much less risky to draw a walk or wait for the fat pitch of known, familiar and within circle of competence company offered at a price sporting a good margin of safety. Link to comment Share on other sites More sharing options...
Liberty Posted February 23, 2012 Share Posted February 23, 2012 It's available at 161 US libraries that participate in the interlibrary loan system. Most public libraries give you access to this system for free. I don't think that's available in Canada, unfortunately. But I might be wrong about that.. Link to comment Share on other sites More sharing options...
Guest Hester Posted February 23, 2012 Share Posted February 23, 2012 1. Inventions that enable us to do things we have always wanted to do but could never do before. - like flying! Lets invest in airlines 2. New methods or new equipment that helps people do commonplace things easier, faster or at less cost than ever before. - like computers! Lets pick which computer company will go up 100 fold 3. Processes or equipment to improve or maintain the quality of a service while reducing or eliminating the labor required. - I can't think of a single machine that has replaced a human and given me better service 4. New and cheaper sources of energy. - Natural Gas!! Lets invest in Natural Gas company it's way cheaper than oil 5. New methods of doing essential jobs with less or no ecological damage. - outhouse manufacturers! 6. Improved methods or equipment for recycling the materials used by civilized man instead of making mountains of waste and oceans of sewage. - outhouse manufacturers, and any company that sells reduced consumption (no money in that) 7. New methods for delivering the morning newspaper without carriers or waste. - the internet 8. New methods or equipment for transporting people and goods on land without wheels - walking. The energy required to overcome the rolling friction of a steel train wheel on a steel rail is such a small fraction of the energy required to levitate the mass carried by same train that any endeavour seeking to achieve this result is doomed. Absolutely. Actually, airlines, the poster child for an industry with nothing but bad investments, could technically fit tenets 1, 2, 3 (maybe), and 8. But then every public tech company today could probably be made to fit at least one tenet. "The year 1999 seven months From the sky will come the great King of Terror. To resuscitate the great king of the Mongols. Before and after Mars reigns by good luck." -Nostradamus This is the prophecy, 3 lines culled from entire texts of non-related near gibberish mind you, that a decent amount of people actually believe predicted John F. Kennedy Jr.'s airplane crash in July of 1999. Ambiguousness, followed by a human need to find order in chaos, and plenty of hinsight bias. Link to comment Share on other sites More sharing options...
alpha231616967560 Posted February 23, 2012 Share Posted February 23, 2012 I don't think that's available in Canada, unfortunately. But I might be wrong about that.. Canada also has an inter-library loan system. It doesn't have access to the US system, but it is similarly extensive and free. Link to comment Share on other sites More sharing options...
Uccmal Posted February 23, 2012 Share Posted February 23, 2012 We're a little biased - but the flush toilet, & related paper, is right up there! No more butlers, maids, & service staff to carryout &/or empty the 2G chamber pot. Sharper I have noticed an alarming trend toward toiletries with your posts. Has a three year old co-opted your computer by any chance? As for the book and the study. Without having read it I will review it and call BULLSHIT! No one can predict the future. A good chunk of S&P earnings today are from companies that didn't exist or barely existed 25 years ago. Others have disappeared or shrunk: Kodak comes to mind. Show me a single company from a list 25 years ago that has gone up by 20 times that you could have predetermined 26 years ago. Oh, if only it were that easy. Mr. Phelps would be richer than Warren. Link to comment Share on other sites More sharing options...
Aberhound Posted February 23, 2012 Share Posted February 23, 2012 I prefer Steven Jarislowski's approach of looking for companies like Abbot Laboratories which achieve long term compounding of earnings. I find it easier to understand so I can find such a company from time to time. Phelps approach might be used to improve your returns by helping identify companies you should buy but would reject using the value investment approach. http://www.moneyweek.com/investment-advice/how-to-invest/stephen-jarislowsky---the-canadian-warren-buffett The advantage of Phelps method is that sometimes you have a new company without proven management which Jarislowski would reject. That happened to me with Google when we used it in our business and were enjoying 20x return on investment in advertising niches where previously we rarely got more than breakeven on advertising. This allowed us to specialize and change our business model to be web based centered on Google. Specialization causes your skills to increase which gets you in a virtuous circle. I knew Google was a great business at the time of the IPO as it is a rare business that creates a new growing ecosystem (like the IPhone). Unfortunately, the value investment emphasis on good management and caution to avoid fads caused me to pass. Maybe if I had Phelps checklist I might have chosen differently. Jarislowski's books are short and excellent. Some of you might not like his comments that money managers should charge no more than 0.5%. I notice that the Android + IPhone easy video creation used to show homes on the web meets most of the Phelps test. I can't figure out who will make the money yet. So far it looks like most of the benefit will accrue to the customers. 1. Inventions that enable us to do things we have always wanted to do but could never do before. - small business can create 30 sec. USP ads and make them available on mobile so I choose Mr. Burger instead of Burger King 2. New methods or new equipment that helps people do commonplace things easier, faster or at less cost than ever before. - same 3. Processes or equipment to improve or maintain the quality of a service while reducing or eliminating the labor required. - small businesses used web based videos to train staff and customers 4. New and cheaper sources of energy. - saves energy not having to travel 5. New methods of doing essential jobs with less or no ecological damage. - same 6. Improved methods or equipment for recycling the materials used by civilized man instead of making mountains of waste and oceans of sewage. - same 7. New methods for delivering the morning newspaper without carriers or waste. - n/a 8. New methods or equipment for transporting people and goods on land without wheels - replace salesmen and need for customers to visit Link to comment Share on other sites More sharing options...
mals Posted March 7, 2012 Share Posted March 7, 2012 I am also reading the book currently. From a library. It is a fantastic book. So long as one does not get lost in the numbers too much and does not try to apply specifics, there is enough learning to be gleaned while enjoying his prose. Key message: Buy right and hold. Easier said than done of course. Buying is tough if you try to buy only businesses that you will want to own for more than decade or even longer. Also, the message does not apply to those who are sharp enough to achieve very high returns year on year without this approach. I would Klaraman and perhaps many others lesser known investors might fall in that category. Link to comment Share on other sites More sharing options...
CorpRaider Posted January 9, 2014 Share Posted January 9, 2014 Just a head's up: I found some used copies of this for reasonable prices on ebay. Link to comment Share on other sites More sharing options...
Yours Truly Posted January 9, 2014 Share Posted January 9, 2014 Just a head's up: I found some used copies of this for reasonable prices on ebay. I just checked and couldn't find any results. Link to comment Share on other sites More sharing options...
CorpRaider Posted January 9, 2014 Share Posted January 9, 2014 Wow, you're right. I guess it was only one guy. He had 8 of them for $19.99 per copy. Used, in good condition. I guess I lucked out! Link to comment Share on other sites More sharing options...
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