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CARRET & COMPANY'S PHIL CARRET
"SOME TIMELESS PRINCIPLES
FROM A TRULY LONG-TERM INVESTOR."
from the Outstanding Investor Digest October 31, 1990 edition
Among the many admirers of Carret & Company's Chairman Emeritus Phil Carret is one Warren E. Buffett. Says Buffett, "I am an unabashed enthusiast. He ... knows an extraordinary amount about business ... [and] markets. If there were a hall of fame for investment advisors, he'd be among the first ten in it." Carret founded Pioneer Fund in 1928 - a full six years before Ben Graham wrote his 1st edition of Security Analysis. And by combining Pioneer Fund's track record from 1928 to 1974 with that of Carret & Company thereafter, we estimate that Carret has earned a compound return of approximately 14.4% per year before fees versus 10.9% for the S&P 500 for the 62 years ended December 31, 1989. (Performance figures provided by Carret & Company and Pioneer Group.)
And lest you think that the 93-year old Carret is ready for retirement, he continues to come into the office 5 days a week - and sometimes on Saturdays - unless he's on one of his many globetrotting adventures.
One of Carret's hobbies, for example, is to view solar eclipses wherever they occur. In stalking one recent eclipse, his train derailed in a remote South American jungle. Even though the train conductor disappeared into the jungle, Carret managed to see his eclipse.
Incidentally, as this feature went to press, Carret was reportedly somewhere in Africa viewing a gold mine.
Carret was one of the speakers at Jim Fraser's 28th Annual Contrary Opinion Forum held on September 29th [1990]. The following excerpts were selected from Carret's prepared comments and from his answers to subsequent questions by program attendees:
I'm sure that we will prevail, as we did in World War II.
"What should be a contrarian investor's reaction to the Iraqi problem and the war which is likely to follow? What does recent history tell us?"
"In 1941, we were suddenly engulfed in World War II. That was a war in which the American people were firmly determined not to get involved, but they got involved anyway - thanks to our Japanese friends."
"I vividly remember a conversation with a college classmate in June 1942 with the war going badly and the Dow at 104.54. Willie was a partner in a prestigious New York stock exchange firm. He had been telling his customers to sell everything. Why, I wanted to know.
"This led to a survey of the war situation and what was going on. First, Willie said he didn't see how the Marines were going to be able to hold their position on Guadalcanal. Second, he didn't see how the British were going to be able to hold the Suez Canal against Rommel's army. And third, if by some miracle, we succeeded in those two places, he didn't see how we could possibly mount an offensive against the continent of Europe against the German defenses."
"I said, 'Willie, I am not a military expert. And I can't tell you how those difficulties are to be overcome. But you're saying that we've lost the war. And we've just started to fight. The United States never has lost a war. And I don't think we're going to lose this one.'"
"'If we do [lose the war], it won't make much difference whether your customers are holding stocks or cash. If we win the war, however, they will be much happier to have held good stocks rather than cash.'"
"As we all know, the American people were prodigies of valor, sacrifice and work in the 3-1/2 years after Pearl Harbor. On V-J Day, August 15, 1945, the Dow was at 165 - up about 60% from the beginning of the war.
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