The almost unbelievable story of Anne Scheiber who turned $5,000 into $22 Million with a simple buy and hold strategy has been told quite some times now, unfortunately sometimes with wrong numbers. Here is what she did in her long life of 101 years:
When Anne Scheiber died at 101 on Jan. 9, 1995, her 10 top stockholdings were worth nearly $6.2 million.
No. of Dec. 11 1995 Company (symbol) shares owned price gain SCHERING-PLOUGH (sgp) 64,000 $59.25 62% PEPSICO (pep) 27,000 57.50 65 ALLIED SIGNAL (ald) 20,934 49.25 44 LOEWS (ltr) 14,061 78.00 75 BRISTOL-MYERS SQUIBB (bmy) 10,080 84.50 45 COCA-COLA (ko) 9,048 79.25 60 ALLEGHENY POWER SYSTEM (ayp) 8,000 28.25 30 ROCKWELL INTERNATIONAL (rok) 4,640 51.75 46 UNOCAL (ucl) 3,690 28.75 10 EXXON (xon) 1,664 84.00 39
Sources: Merrill Lynch, Benjamin Clark
The orignal money article quoted an average growth of 22% for the long period of 52 years. With such numbers Scheiber would have rivaled even Warren Buffett's record. There's only one thing wrong with this tale. It isn't true. Turning $5,000 into $22 million over 52 years is only a growth of 17.5% a year. Furthermore Anne Scheiber loved stocks her whole life long and there is evidence that she started much earlier than 1944 investing, albeit only partially successful.
It shows quite clearly that there were many mistakes in the original article:
Ignoring the additional cash input, going from $21k to $22m over 59 years (1936 to 1995) gives... 12.5% p.a. Better and longer than Hetty Green, but considering the S&P 500 did 11% p.a. over the same period, with its small stocks getting 14.7% p.a., one has to wonder if her record is truly outstanding after all.
I think the more important points to take away are being patient (Anne was down 50% during the 70's but didn't sell) and consistent (Anne only bought companies she understood, mostly leading brands, and reinvested all her dividends).
Side note: Like Hetty, Anne was frugal to the point of being miserly. She wore the same clothes year in, year out, walked everywhere, and filled up bags of food to take home at shareholder meetings