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MUTUAL SERIES FUNDS'
MICHAEL PRICE ET AL.
(continued from preceding
page)
The first railroad in the world was in the U.K. And the U.K. railroads went bankrupt during the Depression - and the government nationalized them. About a year ago, the government started to privatize Railtrack - and I started looking at it. And I realized that there was all kinds of hidden stuff there....
The U.K. investors didn't know what it was because there hasn't been a publicly traded railroad for 60 years. The folks who run it are Brits, but they [had] worked in the States. And it came public very cheaply....
Hidden assets, excellent management and a cheap price. It's been spectacular. And we haven't even fully paid for it.
Price: What David didn't tell you is that he knows
more about Railtrack than anyone else
in the world. He went to London - or wherever they're based - and, like
Rob said, he shook the tree. And he discovered that they
[were] sitting on tons of real estate.
Bob Horton, who ran Sohio ... and did a great job in
cutting their costs, is Railtrack's chairman. We've met
with him on several occasions. David spent several days in
London with them and connected all the real estate values,
the turnaround in the railroad and Bob Horton - who's a
terrific manager.
Price: So far, that investment's worked out
spectacularly well. We haven't even paid for all of it yet -
because when the U.K. government sold it, they only asked
you to pay for 50% of the stock and loaned you the balance
for a year. So it's been fabulous....
RECENTLY, WE'VE BEEN FINDING IT IN HEALTH CARE.
OID: At your annual meeting, Michael Price said that the press gives him far too much credit for the success of the Mutual Series funds. Rob Friedman: He's very generous.
OID: I can't speak for the press in general, of course. But I know we've never given him any credit...
David Winters: Michael [Price] provides the intellectual foundation for what we do. But there are a whole group of people here who have contributed in a major way to our returns for years now.
OID: He seemed to be giving you guys credit for the ideas - Rob Friedman for Sears, Ray Garea for Chase, David Winters for Railtrack - actually acknowledging that they weren't his ideas, but yours. Is that the way the process actually works?
Winters: Yeah. He's well aware of the importance of running the place that way to give his analysts the
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