Chapter 165: 164, The Most Valuable Piece Of Paper, Graham And Fisher
People in the midst of the situation cannot see through the fog obscuring the future.
Indiana was like that, and so was Westfrey Brokerage Company boss Westfrey.
Only Fang Wen, who truly came from the future, knew what a trump card was.
He wouldn’t explain; he would just do it.
Therefore, under Fang Wen’s firm demand, Westfrey brought out the New York Stock Exchange listed company roster.
In an era without computers, all stocks listed on the New York Stock Exchange could be found here.
Fang Wen took the thick volume and flipped through it.
There were many companies on it that he had never heard of; they should all be failures that disappeared in history, with perhaps a very few that changed names in the future.
There were also some that he remembered.
Whenever Fang Wen remembered a company, it meant that this company could survive World War II and grow strong in the coming decades.
It would absolutely not step into the bankruptcy trap.
“Give me paper and pen.” Fang Wen said while looking at the listed company roster.
Westfrey handed the paper and pen from the desk to Fang Wen, but he did not approve of Fang Wen’s behavior.
“Mr. Fang, you should buy companies that everyone recognizes, not choose a bunch of garbage.”
Fang Wen didn’t bother to reply to him and recorded the names one by one on the paper.
General Electric, abbreviated as GE, which is translated as General Electric, this company was a must.
Coca-Cola, which is the future Coca-Cola.
Shanghai already had it for sale.
But now the Chinese translation name was ‘Cocoa-Cola’, produced by Watsons Soda Company in Shanghai.
Happy water has been selling well globally for nearly a century; investing in it is absolutely right.
After recording just two, Fang Wen felt a sense of sure victory.
He continued flipping through.
Procter & Gamble.
This name is now translated as: Procter and Gamble Joint Company.
It means a company started by two people together, mostly used for couples or brothers partnering to start enterprises.
But in the future, it had another name: P&G.
Though unremarkable now, it would be an international giant in the future.
It was now a small business operating candles and soap.
Similar to P&G, there was International Business Machines Corporation (IBM).
IBM was marked in the listed company directory as operating in the manufacturing of tabulating machines and slide rules.
Fang Wen copied down the company names that matched his memory.
Not many, but not few either.
There were even more enterprises that had not yet listed on the NYSE or developed after World War II.
Looking at the list he had copied, Fang Wen suddenly thought of another problem.
He clearly knew that after Roosevelt took office this year, a series of stimulating policies for brokerages would directly reflect in the stock market.
Many companies would benefit and rise sharply because of this.
The exchange rate depreciation caused by the US dollar abandoning the gold standard, and the currency loosening due to massive printing of banknotes, would lead to stock price rises.
But all of this had a process; the trajectory of each stock on the list would not be exactly the same.
How to invest? Which to buy first? If there’s a big rise in the middle, should he temporarily exit and buy back after the pullback? If it continues to fall after buying, how to add to the position? For this bunch of stocks, should he establish an investment portfolio to invest?
As a future stock market leek, Fang Wen figured it out with his own failed experiences.
He was not someone skilled at investing, nor did he have the patience for long-term investment operation.
That’s why the world had financial brokerage companies, letting professionals do professional things.
Fang Wen looked up at Westfrey.
He inwardly denied it.
This person was not suitable.
Was there a better candidate?
There should be.
Fang Wen remembered the investment seminars he had attended, where securities company analysts passionately spat saliva talking about value investing and growth investing.
Among them, they had cited two investment masters from the same period multiple times: Graham and Fisher.
Fang Wen still remembered that those lectures said Graham was Mr. Buffett’s master, and Fisher also had a great influence on Mr. Buffett.
Judging by Mr. Buffett’s age, these two were probably already engaged in investment careers in this era.
Fang Wen folded and put away the note recording the wealth password, and asked Westfrey: “Do you know Graham and Fisher?”
Westfrey thought for a moment: “I know a Graham loser. His joint account has lost seventy percent in the past few years. If the one you’re looking for is him, I suggest you give up the idea.”
“What is a joint account?” Fang Wen asked.
Westfrey explained: “A kind of private joint wealth management, opening a securities account in the operator’s name. He signs separate risk and rights contracts with the funders, operates it himself, and finally shares investment profits according to the agreement.”
Fang Wen nodded. To get more news about Graham, he promised: “Westfrey, tell me where Graham is, and I’ll buy Boeing Company stock as you said.”
Westfrey showed a victorious expression: “Deal, you’ll thank me for this decision.”
Fang Wen and his group left Westfrey Brokerage Company, opened an account there, bought several hundred US dollars of Boeing Company stock, and learned Graham’s location.
A professional wealth manager like Graham didn’t need to do business on Wall Street soliciting clients like a brokerage company; his clients were all acquaintances who believed in his investment philosophy.
Therefore, his office was nearby his home, convenient for living and working.
Fang Wen and the others got into the Chevron sedan and drove to the destination.
The car left Wall Street, went up along Broadway, passed the Empire State Building which had been built only two years ago, and found the Beresford Apartments next to the New York Natural History Museum.
According to Westfrey, he had only been there once, in 1928.
Probably the 18th floor of the Beresford Apartments, but not sure which room.
Fang Wen looked up.
（New York Beresford）
This apartment was more like a castle.
The building layout inside was probably somewhat complex; he had to go inside to see.
He parked the car in the parking lot outside the Beresford, and the four walked into the main building.
The main building had eighteen floors, which was certain.
In the main building lobby, Indiana chatted with a resident and learned the situation.
“Follow me, there’s an elevator over there that goes straight to the 18th floor.”
Everyone followed Indiana onto the elevator to the 18th floor, just as a noblewoman walking a small dog came out of a room.
Fang Wen politely asked: “Excuse me, does Graham live here?”
Hearing this name, the noblewoman immediately chattered on: “Graham? He’s not here anymore. Five years ago I rented his house, only to find out the next year he was nearly bankrupt. The current lease agreement is one I re-signed with the landlord.”
“Do you know where he lives now?” Fang Wen pressed.
“Who are you? If you’re his creditor, I won’t tell you.” The noblewoman became vigilant.
“Of course not a creditor. I come from the East, operating an airline company, here to talk investment with him.” Fang Wen replied.
The noblewoman relaxed: “I’m Mrs. Marcus from Neiman Marcus department store in Dallas, hoping for business cooperation in the future. Graham was just unlucky, but he’s a good man. I hope you can reach an investment partnership with him; it should be very important to him. He should now live in El Dorado.”
The noblewoman was warm-hearted and said a lot.
El Dorado was Spanish, meaning the land of gold.
But this land of gold was a legend of the Maya people in South America.
It was a term created in the South American Age of Exploration and colonization.
But the El Dorado in New York was a twin building.
Fang Wen and the others went downstairs, drove up from Eighth Avenue, and at the corner of 91st Street, it was El Dorado.
Just knowing the building wouldn’t find Graham.
Going door to door asking was impractical.
But fortunately, the building had a manager who registered resident information.
Indiana took out a five US dollar banknote and waved it in front of the manager.
“I’m looking for a person surnamed Graham.”
The manager unhesitatingly took out the resident registration book and carefully flipped through it.
He actually found it.
After paying 5 US dollars, Indiana returned and led everyone upstairs.
With the knock, the door opened.
A man in pajamas with messy hair opened the door.
His face was very pale, the kind from not seeing the sun for a long time, hands in pockets.
“Who are you?”
“We’re looking for Graham.” Indiana asked.
“That’s me.” The man nodded.
“I’m Fang Wen, from the East, specially came to visit you, want to talk some investment matters.”
Fang Wen got straight to the point; he was not American and didn’t understand local customs and manners, so speaking directly might be more effective.
Hearing it was investment-related, the man immediately relaxed and opened the door to let the four in.
After leading the four to the living room, Graham said: “Please wait a moment, I need to change clothes. I’m alone at home; if you want to brew coffee, help yourselves, the coffee machine is in the living room.”
With that, he went back to the bedroom to change.
American communication had no pleasantries; Indiana directly turned on the coffee machine to grind and brew.
Fang Wen surveyed the room’s furnishings.
There was a small study next to the living room; he walked into the small study and saw a stack of manuscripts on the desk.
Titled 《Security Analysis》.
So the investment bible that he spent dozens on in the future was still unfinished here.
By the time Indiana finished brewing the coffee, Graham came out of the room.
Graham, in a neat suit, asked: “What kind of investment do you want to talk about?”
Fang Wen didn’t answer immediately, but said to Indiana: “Trouble making one cup each for us two; mine with sugar. Graham, do you want sugar?”
“No.” Graham replied.
At this point, Fang Wen entered the topic.
He took out the paper with company names and unfolded it in front of Graham.
“I have some investment targets, but no time for long-term tracking. My idea is to establish an investment portfolio and find a professional to manage it for me.”
Graham’s attention was mostly on that paper.
He didn’t understand and said: “What basis did you use to select these companies? Some I think are good, some look very dangerous, even some that from my perspective have no value at all.”
“You think they have no value at all?” Fang Wen was surprised.
“Yes.” This investment expert, tempered by 5 years of economic crisis, had a sense of rebirth from the ashes.
He was eager to share his theories with others, and the one in front of him was perfect.
Immediately, he spoke eloquently.
“I believe investors should seek stocks whose market price is below their intrinsic value when buying, to build a margin of safety to withstand future uncertainties and errors. Before making investment decisions, thorough analysis and valuation must be done to ensure no major losses even in the worst case. By my standards, current assets should best exceed current liabilities by 2 times, and stock price should be below 2/3 of net current assets per share.”
Fang Wen felt like he was back in the future listening to those securities analysts’ lectures.
But this time, he knew the one in front had found his own investment truth from the massive losses of the Great Depression and would lead to the world’s richest investor in the future.
So, he was trustworthy.
Fang Wen waited for Graham to finish and stated his idea.
“I know your joint investment account with Newman has suffered huge losses, but that doesn’t affect my confidence in your ability. My idea is, you form an investment portfolio from the targets on this paper, manage it exclusively for me. In return, 1, I will acquire your debts and joint account, repay them on your behalf. 2, Once a year dividend opportunity, you and Newman will get 20% of investment profit as management fee. 3, I will continuously inject funds into the dedicated account each year and add new investment targets.”
Graham looked at Fang Wen in surprise.
How could there be such a generous person in the world.
Acquiring his debts and troubled joint account solved the big trouble that had plagued him for over five years.
And continuously inject funds to let him and Newman continue investing, with 20% investment dividend.
The conditions were unbelievably favorable.
But he still had his principles.
“I agree, but for the stocks on that paper, I’ll only choose those I think have value.”
Fang Wen nodded, “No problem. Besides this, I want to ask about someone, Fisher. Do you know him?”
“Don’t know.” Graham replied without hesitation. Investment people didn’t have wide social circles; he surprisingly didn’t know his rival.
“Alright then, I need to go back and prepare, find a lawyer to draft the contract, then discuss how to solve your problems. Wait for me two days.”
Fang Wen stood up to bid farewell to Graham.
Out of the building, Fang Wen felt this investment layout was still not perfect.
He had the best investment targets.
And the best investment expert.
But this investment expert was only good at finding value in existing companies.
He still needed one specialized in investing in company growth potential, that was Fisher.
This one should also be in New York.
Since normal channels weren’t easy, change to another way.
He looked at Indiana.
“Indiana, I need you to do something.”
Indiana nodded: “To find that Fisher, right? I understand. I have some friends in New York who can help. By the way, for the lawyer, I can find a reliable one to draft the entrusted investment contract. You must understand one thing in America: choosing a reliable lawyer lasts a lifetime.”
