💡101-Year-Old Investor's $22 Million "Secret" Revealed

Investors, meet Anne Scheiber.

Anne Scheiber must be one of the greatest investors you've never heard of.

Scheiber started investing in her 50s after she retired as an auditor in the United States Internal Revenue Service in 1944.

When she retired, she had only US$5,000 as savings and had never earned above US$4,000 per year.

However, when she passed away at the wise age of 101, she managed to amass a mind-boggling US$22 million.

The secret behind her success was to invest in brand-name companies for the long term, with dividends going back into the pot.

Scheiber focused her attention on strong businesses that could grow earnings and pay higher dividends over time.

Remarkably, her investing period saw many booms and busts, and war and peace, such as the 1972-1974 bear market, the 1987 market crash, the Korean War, the Vietnam War, and the first Gulf War.

Despite the many ups and downs, Scheiber’s discipline in the stock market paid off, since she was in it for the long term. Not one week, one month, or one year, but decades.

The Long-Term Mentality

Warren Buffett, one of the best investors in the world, once famously said that his favourite holding period is forever. In his 1988 shareholders’ letter, he mentioned:

“In fact, when we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever. We are just the opposite of those who hurry to sell and book profits when companies perform well but who tenaciously hang on to businesses that disappoint. Peter Lynch aptly likens such behavior to cutting the flowers and watering the weeds.”

David Gardner, one of the co-founders of The Motley Fool, revealed the secret behind the massive returns of his subscription service. In an article entitled “The Greatest Secret of All”, he told the world (emphases are mine):

“Find good companies and hold those positions tenaciously over time to yield multiples upon multiples of your original investment.”

The key here is to find outstanding companies to hold onto for decades with full conviction, no matter what the stock market does.

By holding onto the best businesses for the long term, we can take advantage of the beauty of compounding.

Consistency is Key

As they say, Rome wasn’t built in a day. 

The key to being successful in the stock market is to buy great businesses and hold onto them tenaciously for the long term, if possible, forever.

Businesses take time to grow and flourish, but by trading in and out of the stock market, we would only hurt our portfolio returns.

Let me end off with another of Gardner’s pithy quote from one of his interviews:

“Find excellence, buy excellence, and add to excellence over time.”

Perfectly said.