My favorite under-the-radar story of a concentrated investor is that of Joe Rosenfield, who was a retired executive and friend of Warren Buffett’s when he took over the management of the endowment at tiny Grinnell College in Iowa. He turned the endowment into one of the largest in the nation.
I learned about this story through Jason Zweig’s great article “The Best Investor You’ve Never Heard of.”
Joe Rosenfield ignored most conventional wisdom about investing and grew $11 million to over $1 billion over the course of about 30 years, starting in the mid ‘60s.
Here’s the crazy part –
Over the course of that time, he made around six investments and basically never sold.
“If you like a stock, you’ve got to be prepared to hold it and do nothing.” – Joe Rosenfield
He turned Grinnell College into a school that had a larger endowment than top schools like Carnegie Mellon or Georgetown.
Rosenfield was an alumni of Grinnell and had retired as Chairman of Younkers Department Store (Iowa folks know what I’m talking about) at age 65. He started devoting more time to the investment board.
“Our job is the make this institution financially impregnable”
His strategy was looking for “good common stocks we could own for the long term.”
He bought 300 shares of Berkshire Hathaway after meeting Buffett in 1967. A year later, Buffett joined the board at Grinnell too.
He helped a Grinnell dropout by investing in 10% of his new startup company, NM Electronics. The company would later be named Intel.
Thinking like a businessman, he also acquired a private business, a TV station that he bought at 2 ½ times revenue.
From ‘78-’81 he put ⅓ of the endowment’s nut into the Sequoia Fund, at Buffett’s suggestion. Famously, this fund outperformed the S&P 500 almost 3% annualized between the late ‘70s and late ‘90s.
The rules that Rosenfield followed –
“I just wanted to do some good with the money.” – Joe Rosenfield
Rosenfield died in 2000. A 3% owner of the Chicago Cubs, he missed his chance to see them win another World Series. Being born in 1904, he had been alive for their last win. His life’s work was accomplished at Grinnell though.
Not a bad “2nd act,” for a guy in retirement.
Further reading:
Here is Zweig’s article, which I used for this thread – https://jasonzweig.com/a-golden-oldie-the-best-investor-youve-never-heard-of/
Why investors are concentrated today (and they don’t even know it) – Lawrence Hamtil – https://fortunefinancialadvisors.com/blog/the-most-concentrated-market-in-40-years/
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Andy Flattery is a CERTIFIED FINANCIAL PLANNER™ and Owner of Simple Wealth Planning. He serves young and affluent families that are working to lower their time preference and achieve financial sovereignty. Flattery is the host of The Reformed Financial Advisor Podcast, where he relates stories in Kansas City history to pivotal themes in personal finance. When he’s not helping individuals build wealth, you can catch him playing rec sports, reading Austrian economists, and spending time with his wife and three children.
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