Friday Haymaker
In The Ring - September 1st, 2023
Of Lions & Lemmings
“He that won’t be counseled can’t be helped.” -Benjamin Franklin
Years ago, I read the autobiography of Jack Dreyfus titled The Lion of Wall Street. His investment performance some seven decades ago became the stuff of legends. According to Investor’s Daily, “The Dreyfus Fund returned 604 percent from 1953 to 1964, compared with 346 percent for the Dow index during the same period. When he (Jack Dreyfus) ran the fund, he beat the next best fund by 102 percentage points. “
In addition to his manifest investing acumen, Jack also had a flair for quirky ads, such as one he ran in the early 1950s proclaiming Christopher Columbus as America’s “First Speculator”. This combination propelled his once small firm into among the most widely distributed mutual funds in America at a time when this collective approach was sweeping the country. The Dreyfus Fund’s lion became one of Wall Street’s most famous advertising icons in the 1960s and 1970s.
His fund built its exceptional track record by aggressively trading, some might say “speculating”, and its willingness to hold concentrated positions in high-flying growth stocks. One of the aspects of his book that stuck with me (along with his vehement championing of the drug Dilantin, which cured him of deep depression) was a single stock: Polaroid. He gave tremendous credit to this company for his exceptional track record and it was a classic case of a transformational technology. Its earning growth was truly astronomical during its glory years, as was its stock price performance.
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Per the Company-Histories website, his foray into this entity was somewhat serendipitous:
The one stock on which he took a long-term approach was Polaroid. His brother-in-law was the head of the company's research department and told him about some 3-D glasses in development. Dreyfus bought the stock because of the glasses but took a large position because of the company's camera. Polaroid became an early major success story for the Dreyfus Fund.
Regardless, he had the good sense to ride it for all it had (he was also a successful breeder of race horses). In many ways, it was a precursor to the type of spectacular tech-related fortune-building that would happen decades later with enterprises such as Microsoft and Amazon.