YouSaid · the spoken record

Jim Cullen

lines on the record: 44
first: 2022-06-03
most recent: 2022-06-03
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“I guess Amazon is where the books are. Our publisher is in London, but basically we're located in New York City, Olympic Tower, 645 Fifth Avenue. We've been there for 40 years, same building. And so if anybody wants to contact us there and want any information on our market letters or what have you, that's probably the best place to get us. And we're about 100, 500 of us there. We got a floor there. 51st and 5th. If New York ever really opens up again gradually, I'm here in the hotel up on the upper east side, places booming up here. And you go down the offices, people just aren't coming in yet. Our place, the research guys are coming in and we're never more than half full. But everybody's enjoying the openness because all of a sudden you have all these restaurants outside, which you never had before in New York. So that part is better.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“I find reading is a good hobby, reading tennis, but you can go sit on the beach and sometimes with the markets the way they are. I think I'm going to sit on the beach with a good book and hide out.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“Last 60 years smoke out performance is pretty good only because you have such a recovery after a bad year, but small cap is probably lining up today probably pretty good. There's a big difference between small cap value and small cap growth, of course. And similar international, our international portfolios actually have a higher dividend yield. You just have to be more careful of those. We have a little more diversification because you have more risk, but the dividend yield is”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“For that reason, I mean, so this would be ideal for, especially for that, you get commissions on the trading for tax-exempt accounts. And so we started it. And I said, this again would be idea for pension accounts. And I'm a lousy salesman, so we didn't do that great on the pension accounts. But we have about a billion dollars in the strategy now finally, but there's been more of an interest. And what we see this year, it's outperforming your high dividend strategy by two or three percent in the down market. So I think when we were down 4%, that was flat and mark was down 10%. So it's an interesting area and developed out of the, watch the market, what can you do? I mean, you mentioned small cap and we've always had a little bit of small cap stocks may be in a portfolio, the value portfolio. We also had periodically some international names if they were cheaper. And what you see on small caps is anytime you have a really down year in the market, the next year for small caps is phenomenal. And therefore, because of that, if you look at that small cap over the”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“We always had the hide dividend strategy at the stage. This was back in, we started in 2000. We had a couple of accounts that institutional accounts, but periodically we were right on the most expensive stock that we wanted to sell. Well, we're looking for a new name. It's something that's getting overpriced. Let's sell the option, right? The option, and hopefully we'll lose it. And meanwhile, we'll get paid while we lose it. And so we started that with a couple of clients. And then all of a sudden, the market, the bond market comes down, interest rates come down, broke through 2%. So you're getting down to 1%. I'm saying, why wouldn't every single bond guy want to take a sliver of his portfolio and invest in a strategy like this? Because what you get is you get the high dividend strategy, which had about a 5%, four and a half percent dividend yield. You do the options writing on top of that. We had another 4% there. So the average yield for the average return for the average yield was about 7%, 7-8%. And the risk level was even better than our high dividend strategy by about 10%.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I mean, we always compare total turn versus hard return. And as a guide, we're trying to beat that bojo all the time. So we're going to look at it without the dividends. We just look at it. Total return on both.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“Right, a lot of blood. If we can get people through a five year time, then a lot of them become believers. So that's why we have some business.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“I go back and look at the chapter we have in there on recessions of bear markets and you look at that and you say the temptation here to try to get this right is almost overwhelming. But then you go back and look and say, okay, let's superimpose the rolling five-year period over that with those recessions all blocked in. And so instead of seeing all this jagged down up, what have you, you get this smoothed out picture with all these recessions in each one of those five-year periods? And that's your religion, I guess. That keeps you in the game. But it's hard. I mean, we have doctors who did the kept with the program, but it's pretty hard to keep people in over a long period of time. 2000 and 99, the year before 2000, we had people calling up and the growth was up, value was down. It's one of those pivotal years. Usually a pivotal year like that, usually at the beginning of a term, which it was then. But we were getting fired. I said to people, only sell half. Only sell half. You're getting fired 10 times, 20 times a day.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“Probably back in after the market peak, you know, in 2000 and rolled over. And we started a mutual fund at that point, 2001, 2002. And actually we did a sub-advisor with Pioneer, which was the Italian advisory firm. And we did a sub-advisory with them. And that was the right time. And we were like in the top 1% of the one year, five-year, three-year was posted in the Wall Street Journal once a month. And we were there consistently in the top of that. So everything was going right. And we raised about $7 billion in about three years, four years. And so everything was clicking in there. And then all of a sudden you get to period where value is out of favor and you have to struggle.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“Ratio and where they can grow the company. And that's the question. And it's a trade-off. The more you can get in dividend growth, the more companies, I think it used to be dividend weren't as important for companies. I think a lot of people started to realize the dividend yield is more important as far as stock price now, but you still have a huge focus on buybacks I don't get.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“Simulator good price to the queer. I mean, most of these companies that I've seen, their shares back are buying back at a ridiculous P multiples. And I think having a dividend discipline gives companies a little bit more of a discipline themselves because it's not like, you know, just buying shares and you may do it or you may not do it. Postponed or may not postpone it. Once you establish a dividend policy, they want to stick with it. Unlike global Europeans, Ethereum is going to go down 30%. They'll cut the dividend by 30%. But in the US, as I mentioned earlier, the S&P 500, they've increased dividends every single year to all their sessions. Back in 1975, when I mentioned that period with Wall Street with Buster, you had a dividend increase every single period during that whole time period. And it's phenomenal when you look at it and say, meanwhile, you knew earnings were down 50%, stocks were down 50%. They're still increasing dividends. So you want to make sure you have companies that have a low payout ratio. You don't want to buy somebody who's paying at 90% of their earnings and dividend even when somebody has a lower payout.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“Well, that's what you're looking for. And what you want is dividend growth. I mentioned dividend growth. So these are companies. I mean, we don't look for just dividends. We started the strategy in 91. The only thing they had the equity income was a category. And equity income was a high yielding stocks. Most of them utility stocks. But dividend growth wasn't a factor. And we started, we said, okay, you know what? You can have a broader diversified list, but look for dividend growth. And that's a key part of the strategy. So we're looking for companies that can grow that dividend. And our average growth has been about 10% a year.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“So I know our guys are doing some work on what stocks are, but the young guys we have all of a sudden, they want to get more of these more interesting stocks early if they can find them.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“Well, just the history of that, you got to be careful because all of a sudden if you get caught with the history, these things and all this in every single cycle, the companies that peaked out had great earnings for the next usually five or ten years. The earnings continue fine. It was just prices got too high. So that's the danger. Amazon, for instance, here. I mean, Amazon wors got me. You're starting getting competition in their industries. Companies get so big that they start competing with each other. And then all of a sudden, instead of buying little minnows, they wind up, you know, dealing with sharks. So how much of an impact that has on a company? But eventually, you know, they can have usually the business continues to be halfway decent, which is the growth rate slows because it's got more competition. And then all of a sudden you wind up in every single case we wound up, you wind up getting these stocks down to other value levels and they can be bought for a value guy. Whether this happens here or not, I mean, you look at, it seems like early in the game, but alphabet looks like it's only 20 times earnings. So it looks pretty inexpensive.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“Well, that's why I watch the CNBC and what have you in the morning. I get value on it. Buffett does this also. I get value on every week. And that gives you a lot of covers for all the stocks. And that gives you all the financial data on them. And who has how much debt, what have you. So you don't get for companies with less debt, usually. But a combination of all things you put together and you're hoping something jumps out at you. And that makes it fun. There's a guy who does a report, 13D research, and he does very thematic strategies. And we've got a couple good ideas out of him. And there's certain people you rely on that have been very helpful.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“What have you, and then you think you have it, you never know whether you have the story or not, but you think you have a good story on something, then if you can catch something which periodically go out of favor and time that. And that's the third point, the skipping something that's out of favor. We went back and looked at the stocks that were the stocks we made over a thousand percent and say over time. It's usually when for some reason you get a stock that makes a lot of sense and we think we have a story, but something happens and the stock gets sold off and becomes really cheap on a valuation basis on a price basis. So we're constantly looking for that also. And I think one of the examples he used was Merck when they had Vox. And I mean, Merck was always selling at 20 times earnings. It came down because of the competition in the industry. And then all of a sudden it gets down to like 10 times earnings because of IOX was giving lawsuits, what have you. And if you bought then, the next thing it was, you know, up a thousand percent over the next five years. But you got some gain.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“One thing we sort of missed here, and I have a book on mention management and the importance of managing diamond, for instance. And one thing about an Eiger of Disney, the one thing I didn't mention, and actually when you think about it, equally important when a good manager leaves company, you know, I mean, you want a good manager in the book we mentioned three or four managers that were the reason why we bought the stock. But actually, when somebody leaves, usually more often than not, it's probably a good idea to reevaluate the company because there's an adjustment that goes on. So managers is always a big part of it. We have in there called a three-point fix. So you get stocks which are three-point fix is a Navy term. It's, you know, you go in the harbor, you get one point fix, you know, as a harbor's fogged in, you're probably going to be okay. You're going to get in out your slip. You get two points. You get another fix, and that gives you a better chance to get a third fix. You're going to get in the harbor no matter how logic it is. So that's why, so an investing ad, characteristics long stocks cheap, makes sense.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“I mean, I took one about a Canadian national. We owned International Nickel and we were meeting with the analyst after the, he was visiting them and he's updating us on international nickel. And he said at the end of the meeting, he said, oh, by the way, he knows that rail companies in Canada are going to be spinning off. They can't make any money in those things and whatever. They're going to spin them off. We just made a lot of money in the US because of revising and revitalizing the US rails. So we heard that. We said, wow, I want to get involved with this. And so we saw it right at that point. And I went to a couple meetings where there were pre-meetings where they're spinning these things out. And we made about 3,000% on our money on Canadian National.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“Well, yeah, we had a chapter in the book on the research side and use all the parameters, price the book and payout ratios and dividend yields and all the various ratios. Then you're looking for, number one, you want to have diversification because what you know is the strategy works. So you don't want to get locked into too many drug stocks, too many computer slocks. You want to diversify list of holdings. So we say traditionally no more than we try not to do any more than 10 or 15 percent in any one industry and be diversified. We know the strategy works. So we want to stick with so we participate in the strategy and we don't get overwhelmed with any one group. So we start there and then we're constantly, we get a portfolio which is dramatically cheaper than the market right now, say roughly 20 times earnings. Our portfolio is around 13, 14 times earnings. And we're always trying to get new names in the portfolio that are cheaper than what we already own. And it's an ongoing process. And in the book, we have where the ideas come from, they come from wacky places, all kinds of different places.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“Idea, not your telling them something. And I think it has more of an impact. And so then the secondary was really to educate investors, educate young people. So it's a combination of the two things.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“Combination of two things. One, I think the thing that really started me is that value been out of favor, so out of favor like 10 years was unusual. And so it was a long period. And I remember going to a pension consultant who we used to do business with. And I said, when are you going to do a value search for a pension plan? He says we haven't done a value search in 10 years. Oh my God. So not only was value forgotten, I mean, not only was not being used, but basically been forgotten. And so I said, we got to, that's why I changed the name of the book was going to be long-term value investing. I said, we want to make it a case for long-term value investing because we got to start building the blocks from bottom up. So it started there. And then what I know from being in the business for 50 years is that you're talking to clients all the time and they just, most of them, you're trying to educate them as you go along. But it's hard conversationally to get through to people. And so I figure if you write this thing in a book and then it's something that people can rely on a bit more. When people read something, then it becomes their.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“Some index funds can be okay. The tricky thing about some of the index funds, of course, is that the index funds compete with the market. And so they're going to stretch their parameters to take a little bit more risk because we're trying to get performance. So especially we have a period in there where we talk about just the S&P 500 index fund. It gets really overloaded with the top five stocks. And once the top five stocks were the highest PE multiples, once they become like 25% of the company, that's usually when it's getting way overpriced. So therefore, after periods like that, then the index really dramatically underperforms. So you get wider swings in performance with the indexes. And people cheat on even value, you know, the value indexes. If you look at the value different S&P 1000 value index, what have you, you'll see they put names in there. You say, well, these aren't value names. But I think they're trying to make that index more attractive or more, they say more representative.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“Save it whenever he can do it. And that's one message in the book, you know. At the end, I have the 14-year-old paper girl compounded interest and how that's secret to investing really and how they start when they're 10 years old, when I put a small amount aside, the compounding. I mean, that's really the key for people to get started. That probably should have been the first chapter in the book.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“And you bought the worst possible day every year and the best possible day. The difference is only 1% over the 20 years. Amazing. So the compounding takes care of it.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“Well, they have risk. I mean, you can use standard deviation or alpha, beta. Use that as a guideline, what have you. And I still say the best way to evaluate risk is to have a dividend discipline and be a long-term investor. And that takes care of it. And that's my solution. The best way to deal with risk. And if you look at these numbers on the book, if you look at these numbers, you say everybody should be doing this. And with the temptation, I also have in the back of the book it says what happens when every year you sit down and you say, I'm going to make an investment say, but the market's too high or there's a recession coming on or we're going to get stiflation. Let's wait a year. And I haven't gone back to 1920. Every year, there's a reason not to get your money in that year. And so you sort of got the market over the same time period as a phenomenal return. So you just got to go with it. Actually, John Templeton did a study over a 20-year period of time. If you bought the market every year, if you're making a contribution every year over a 20-year period of time,”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“I watch Bloomberg and CNBC every morning for an hour or so, and I'm looking at it. I can go and yell out the window here and say, oh, no, don't do this. But it's sort of nice to know what's going on. And you're still looking for the best ideas you can get out of the framework. So, yeah, but as long as you're focused on not trying to trade that thing or take advantage, as long as you have some investment money on the side away from that, then that's a different story.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“You say, why would anybody? I look at the pension accounts and they have all these different alternatives they use in real estate, what have you. And I think, you know, using a dividend discipline strategy would seem to be better than almost all those things. I mean, you get a double digit return and every single 10 year period. That's in the book.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“Because what Graham says is, you'll be a long-term investor and use the strategy. Well, with the average guy says, well, what's that long-term? And so we said that, or we came to the conclusion that using a five-year time horizon gave you enough time to smooth the performance. And so we have in the book we show all the five-year periods going back to 68. And you have maybe three periods where you had a small amount of change over that time period. But then what happened a five-year period after that was huge. And so the five-year time horizon smoothed all the performance. And we have it later on in the book on the recessions and bear markets. How can you avoid those things? Well, in every single five-year period, going back to 1968, you take all the five-year periods, you get double digit, most of them, double digit returns on the five-year using a discipline every single five-year period, you have some bear market, some recession, and you can try to drive yourself crazy trying to figure out when to get in and out of that. But it smooths it out. And if you take the 10-year, it even swoons it more.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“Money also, you get these one, three, five year presentations and you look at them, you say, why is that? I tell a story, I think it's in the book, but I think that story, the first meeting I went to was a big foundation and we're sitting there and the Merrill Lynch broker was presenting four different mutual funds. And one was just dramatically better than all the others. So one of the people on the board there was saying, why the hell wouldn't that we choose that one? And they did. And it turns out that two years later it was a disaster and it had been the most speculative stocks and leveraged and therefore got the best performance. And so the one five year, one, three, five year can really come back and haunt you. And that's another story.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“And they're up like seven, eight thousand percent of the time period. And it was money that they just set aside. And there's no way they would have done that any other way. And we have an accountant down in Florida. And he said, what happened to these? Where are these guys come from? He said, I never saw an IRA plan worth, you know, $40 million. And it's because they stuck with the plan and held the temptation to change. And that's why I wrote the book. He said, you know, the average investor, number one, they get no education in schools or what have you on the stock market. And Jason Zwig, actually the New York Times and Wall Street Journal, rather, who I know he wrote an article recently and he said, they are getting some education, but it's the wrong kind. They're having his contest where they said who has the best performance for the month and what they do. If you want to get the best performance for the month, you get the most leverage stock and leverage it and put on margin if you can. And that's going to win and end up market. And that's sort of the way a lot of pension funds are around them.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“Oh, yeah, for sure. As far as the millennials, which I was, right, the real smart thing I should have done is do your trading on one side, set aside some money for investing, and make sure you know the distinction. And as far as investigating, you don't try to market time and you leave that alone. We have a chapter in the book on a bunch of doctors. I was at Donaldson Luffkin and Jenrat before I started the firm and I had a bunch of doctors come in and I was working with and they had these IRA plans. They could put 25,000 dollars a year in the IRA plans, usually four doctors in a group and they put them away. These guys were making a lot of money in those days, but they didn't touch those IRA plans. And except for the guys that got married a couple different times and they were making all kinds of crazy investments and what have you. But the one doctor especially tried to preach to them to stick with that, not touch that money. And the ones who listened to them or didn't get divorced wanted now this cancelled like $40 million.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“over that is because when the market's going up and it's a hot market value will trail pretty consistently but not by much but when you get a tough market value dramatically outperforms and you know this year the last year and a half that's been a case that i'm doing a market letter right now which is i highlights that and uh so you know the market's changed and you have a situation where you've got all the earmarks for stag inflationary kind of environment so you want to be taking less risk So now it's probably more important to have a dividends than normal.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“10 year period, probably one of the worst 10 year experience we've had. And so if you look at that, actually the dividend strategy, value plus dividend strategy during that period was actually up almost double for a 10-year period of time. And the market was down about 7 or 8 percent per year down that same time period. So if you go back and look at it, well, why did that happen? Well, if you started off in the beginning of the year 2000 and you had 3% dividend yield on the portfolio, but dividend increases as you went through the whole 10 year period kept inching up, inching up and inching up. And so by seven or eight years later, you had about an 8-9% dividend yield on the portfolio at cost, which means the stocks aren't going to stay there. And they went up. And that's why the market went up. So dividends are very underrated. And so that's going to become a bigger part of probably 80% of our business. High dividend plus value strategy. So, you know, and if you look at the history of value versus growth, the reason why value wins.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“That study was done on the SP 500, basically. And what we did was once we did the low PE stocks, we said, how about dividends? And what it turned out that dividend yield on the S&P 500 was much smoother than earnings on the volatility over the 70-year period of time. So he blew those charts up recession. And what it showed was in every single recession going back to 1960s, the dividends, the thing's gone, by the way. Going back to 1960s, every single period, every single year during every recession, the dividends increased by the SP. Every single time. The only exception was TARP, you know, the most recent, and that was artificial. And the bounce back in dividends after that was on the biggest bounce backs ever. So what you have is, and what we found out in the dead decade, 2000, 2010, you had the peak, the tech stocks, you had 9-11, and then you had the financial crisis, all that.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, well, they're the three disciplines Graham mentioned. And we get the number every year for the S&P 500. The shocking thing to me is we don't use price to book much at all. I mean, we look at it on all the companies. And it's appropriate for very cyclical material companies, but for most companies, healthcare companies, what have you, it's immaterial. But the performance of that on a historic basis, even recently, has been pretty good, which is surprising to me. I wouldn't think it would be the case. What we do in most of ours, we started off strictly with a value strategy number one. And then we usually want to take less risk. So we found by adding the dividend portion to that. And then to get growth plus less risk is dividend growth. So those are the things that we're usually focusing on. And that gives you a lot of downside protection. And if you do well when the market goes down, over time, you're going to do well overall because the market's going up more than it is down. But if you do well on the downside, it's going to be a big bonanza for you.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“Jubstark will put dividends and stay invested and don't try to time it. And that's the big, you know, that's what we get around to is the message we're talking about here.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“What looks like it really bounce off the bottom. Studies done have shown that if you took over that 60 period year period of time, if you took the bounce off the bottom and all those recessionary periods and took that out of the market, you basically wiped out the advantage of any equities over that entire time period, which is extraordinary. So the key thing is, and he said, well, if I get out, I've got to get back in. You're probably better off not to get out. And the bottoms looked like it was, if you look at the long chart, it looks like that would be easier to sort of figure out where the bottom is. But then if you expand that out, some of those bottoms took a year. I mean, we think of a bottom being made and all of a sudden the market turns around. These things could drag out six months to a year. So that's why you don't know where you're at. So if you're trying to take a shorter term trading positions on the markets, you know, it's a tough game. So that's why I guess our investment strategy to get around that is buy cheap stocks, especially if it's a tough market like this.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“Oh, yeah. Oh, yeah. I mean, every time you thought the market was going down, it's going to go lower. And then you said, this time it's going to go through a thousand. And it didn't do it for 15 years. So whether you trade like that here or not, it's hard to say, but that's the volatility is extreme. We did a chapter in our book on the bull markets. I mean, bear markets, bull markets, and recessions and how, and going back over the last 60 years, analyzing every recession and bear market. how that played, you say, because you say as a investor, you say, if I could time that right and I could avoid, and that's where you hear the commentary on TV every day as people try to figure out, you know, we're going to have a recession or we're going to have a bear market. To our feeling is it doesn't make any difference. But if you look at, you know, what happens with the bear markets is that first you get the bear market, then usually the recession comes later. You don't know the recessions there because it takes the government a couple months, six months maybe to figure out where it is. Then you get...”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“In the tech bubble Microsoft and some of the other big tech stocks, we wound up buying as value stocks back in 10 years after the market topped 2000, 10 or 12 years later. I mean, we bought Microsoft, you know, it was like 10 times earnings with a 3.5%, 4% dividend yield. So that's been the common thread in these past markets. And what we have now is the sort of period of, let's say you're going to have a hard time avoiding stagflation, I would think. Interest rates are going up. A lot of factors are going to, I think, put a lid on the market growth. So you may go through a period of stagflation. So our answer probably to that would be the answer, which was back in the 70s.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“because the market during that period was gone between 700 and 1,000 back and forth. And I just couldn't break through 1,000. But the problem was the market had been overpriced. And that's always the Achilles heel of all these speculative bubbles similar. And well, the other thing that happened, and we mentioned this in a book, every single 1930s, 1970s, 2000, and every bubble period, it takes five to ten years before those stocks basically correct enough. And even though in every single case, the fundamentals for all those stocks were good all the way through the next 10 years period, but all of them were 10 years later, were down. I remember in 1982, we bought IBM and A-Bomb products under 10 times earnings with a big yield. And they had been, you know, 10 years before they were at 60 times earnings and 50 times earnings. The same way with RCA. And then in the same way, we had here.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“And many of the firms that were also involved were also gone. So that was sort of the initiation of that period of the era of the 70s, which was really much worse than the tech bubble. And of course, the 30s was even worse than that in a way. So I would say, you know, you wouldn't want a similar kind of experience. But there were two shocking things that came out of that. One, later on, not then, but later on, I went back and checked what happened between 1965 and 1982 when the market was flat and didn't go through a thousand for that 17-year period of time. And what happened is actually the cheapest stocks on a PE basis, the bottom 20% of stocks on a PE basis, actually went up 1,000% over that same time period, which is pretty much the same as they went after the bull market between 1982 and 2000. And I found that was shocking after having been through it.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“Are dividends anyway. And we were millennials, most of us there, and we were interested in the hot moving fast-growing stocks. Airlines were big, Pan American, TWA, world travel's going to expand dramatically. We had color television socks were hot. And so anyway, we had all these new stocks. Industry was formed called conglomerates, where they were highly leveraged companies were built on debt and they were just buying up all the kinds of companies around. And they were the most active stocks every day. So it was really a real casino. And I tell them the book, I said, it's like a British betting parlor. I mean, it was mobbed every day. Then all of a sudden, 1968, the market rolled over. And the market, the next seven years had two major stock market recessions. And by the end of the market, 1975, by the end of 1975, all those brokerage firms were shut down. Most of them were gone. And most of the brokers were gone.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“We're fighting brokers, were fighting all day that picked stocks out of that and repeat prices to their clients, what have you, and also a character, and I mentioned in the book called Charlie Plong, we called him two-a-day Charlie. And what he would do is come out with two new issues every single day. And all the investments were strictly clamoring for him. So it was similar to the, I guess some of the things we see today. And actually what happened, Lincoln to the 30s, which Ray Dalia mentioned in the 30s, what they, but Merrill Lynch did, they had three older experienced vets, brokers in our office to give some stability. And these older guys were, you know, buying names from the 30s, and they had nicknames for the stocks, Betsy and old Steele and all the nicknames. And they all were dividend socks. And we used to say, well, these guys, they're all like, they all wear resident spenders smoking cigars. And we said, must have something to do with dividends.”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT
“Let me answer that sort of directly the way we started our book with background. And I was on the aircraft carrier 1961-64. Market was going up every year. Looked like it was going to be fun. Easy. And I got out of 65, went to Merrill Lynch, Merrill Lynch was opening offices all over the country, as was everyone. And the markets were booming. And we had mobs of people every day in our office over there. It got so bad. so crowded every day and we had to put a plexiglass to separate the brokers and the crowds and people were cheering for stocks and it was mayhem and so it was great this is lucky so that's you know the speculation was high two big things in the speculation there had something called the pink sheets which were this on a clipboard elaborate maybe two inch thick ream of papers colored pink which had all the over the counter socks and people”
2022-06-03 · We Study Billionaires · TIP453: The Case for Long-Term Value Investing w/ Jim Cullen · IDENTIFIED FROM THE TRANSCRIPT