Friday, October 17
Abnormal Characters, end of day, October 17, 2003.
I'm interested to know more about Anne Scheiber. I'm not sure if the Times wrote anything more
about her other than this little note back in 1995. Maybe I should write a book about her.
A QUIET AUDITOR LEAVES YESHIVA A FORTUNE
By David Gonzalez
2 December 1995
"Anne Scheiber, who after leaving Internal Revenue Service in 1944 where she worked as an auditor, leaves $22 million bequest to
Yeshiva University; her lawyer says she parlayed $5,000 in savings into portfolio that included many blue-chip stocks; friends say
endowment was born of her desire to help Jewish women battle kind of discrimination she felt she had encountered during 23 years
with [the] IRS."
There was apparently an article on her in Money magazine, "She Turned $5000 into $22 Million," but I can't find a copy.
I found this at Yeshiva's site:
Scheiber Scholarship Program Begins
"When she retired in 1941 with a monthly pension of $83 and $5,000 in savings, she devoted her talent and energy to investing in
the stock market, where religion and gender didn't matter.
Ms. Scheiber did her own research before making investments and would attend annual meetings of 'her companies' when they were
held in New York. She had an acute understanding of the stock market and an uncanny ability in investing."
Found this bit here, but I don't
know how accurate it is. The author probably drew it from the Money magazine article I'd guess.
"Miss Scheiber invested in stocks of companies that she knew and understood. Companies whose products she used. She loved
the movies. So she invested in Loew's, Columbia, Paramount and Capital Cities Broadcasting. She drank Coke and Pepsi and
bought shares in both. She invested in the companies that made medications she took - Schering Plough and Bristol Myers
Squibb. And so on. And she hung on to them through thick and thin for over forty years. Through the bear market of 1973-1974.
Through the crash of 1987."
Found the following passage here:
"Anne Scheiber died in 1995 at the age of 101. For years she had lived by herself in a tiny run-down apartment in Manhattan.
The paint on her walls was peeling and everything was covered with dust. Scheiber lived on Social Security and a small monthly
pension which she began receiving when she retired from the IRS in 1943. At age 51, when she retired, she was making only
$3,150 per year. Those who knew her say she was the model of thrift. She didn't spend money on herself. When her furniture
wore out, she kept on using it. She wouldn't even subscribe to a newspaper, rather she went to the library once per week
to read The Wall Street Journal. Norman Lamm, the president of Yeshiva University was literally blown away when he learned
that this poor old woman left her entire estate to his university -- $22 million! How did she do it? One day at a time.
She had managed to save $5000 by the time she retired in 1943. She invested that in stocks. By 1950, she had made enough
profit to buy 1000 shares of Schering-Plough Corporation stock, then valued at $10,000. And she held onto that stock,
letting its value build. Today those original shares have split enough times to produce 128,000 shares, worth $7.5 million."
Actually there's quite
a bit of stuff written about her, so I'm going to stop digging now. It's interesting to see that
her holdings of Schering-Plough accounted for roughly a third of her fortune (assuming that information is accurate).
She sounds like
the classic miser: supposedly she never went to restaurants, never used public transportation, etc. Her lawyer said:
""She was the loneliest person. I never saw her smile ... She was very distrustful of anybody. She didn't want anybody to know what she had,
how much she had ... I don't think she knew what it was like to love or be loved, that was the saddest thing of all."
Oh dear, one last thing, Thomas Easton wrote an article in the February 12, 1996 issue of Forbes called "The Anne Scheiber myth." I don't
have time to read it now (I did find it) but I'll write what he has to say about it all later.
OK. I've decided to put Easton's article up in full since it debunks the whole Money magazine story. Here's his conclusion:
"From its Scheiber myth, Money magazine draws some grand conclusions about how the little investor can beat the averages:
Buy growth stocks, invest in leading brands, go to shareholders' meetings. The facts support a much more limited lesson:
Live on next to no money, survive in good health to past 100 and let your savings compound for 60 years. With that going
for her, Scheiber would have gotten as rich had she invested in a diversified basket of stocks, today's index funds, and
never attended a single shareholders' meeting or read a financial statement."
The Chairman talks about the stupidity of risking two points to make two points in today's Trading for Dummies lesson.
The ten-year Treasury Note yield since 1980 (divide scale by 10). Looks like that spike down in the summer of 2003 was kind of
an anomaly... the folks who refinanced down there or issued new debt then were either savvy or lucky.
James Coxon in the August 3, 1998 issue of Barron's:
"Perhaps the ultimate courage of contrarianism is to defy the teachings of academia, especially when it has been ennobled
by Nobel prizes."
Joseph Goodman wrote in the January 1, 1936 issue of Forbes:
"When a bull market turns bear, sell the stock that has gone up the most, as it will react the most. Also sell the stock that has gone up the least. It couldn't go up; therefore, must go down."
There's a study by TIAA-CREF done in 1988 that shows that less than 1% of its universe of members ever rebalanced
their portfolios over a 15-year period. Anybody know the title of this study?
What's wrong with swearing? It shows you don't have control, reflects ignorance, contributes to the decline of civility, and
represents the dumbing down of America.
"...little by little the face of the country changes because of the men we admire." - from the movie, Hud (1963).
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