On Sunday, January 18, 2009, as the financial crisis intensified, the Las Vegas Sun ran an article entitled: “Las Vegas Sands: A big rise, a big fall.” The piece chronicled how Las Vegas Sands casino founder and CEO Sheldon Adelson’s personal fortune peaked in 2007 at $28 billion on the strength of his stake in Las Vegas Sands (NYSE:LVS) stock, making him the third richest man in America.
Insiders buy market crashes, backing up the truck if their shares get cheap enough. The smartest fund managers can make their year -- even careers -- acquiring great companies at phenomenal bargains during market crashes. True market crashes are rare--black swans. But garden variety "panics" occur fairly...
Baron Rothschild purportedly said: “Buy when there’s blood in the streets, even if the blood is your own.” During the financial crisis of 2008-09, investor blood flooded Wall Street – and main street. But for many prescient corporate insiders, buying during the market carnage earned them fortunes. And for investors who had the foresight – and nerve – to follow insiders into these ultra-contrarian investments, the worst of times turned into the best of times.
Bill Stiritz may not have the name recognition of Jeff Bezos, Elon Musk or Warren Buffett, but the 84-year-old Non-Executive Chairman of Post Holdings, Inc. may be one of the greatest CEOs of the last half century.
An investment of $100 made in Ralston Purina in 1981 when Stiritz was named CEO, would have would have been worth $5,700 by 2000 -- a compound annual return of 20%.
Somewhere, Benjamin Graham is smiling. The father of Value Investing and mentor to Warren Buffett had a favorite investment strategy: Buying “Net-Net” stocks. These are stocks that because of bad markets, bad business, bad luck – or a combination of all three -- are trading for less than the net cash they have in the bank.
